The continued economic turmoil means that retailers will face a fork in the road in 2026, according to marketing experts. While luxury shoppers remain a strong segment, many consumers will insist on affordability, and retailers will have to wrestle with this gap.

• Luxury retail sales are expected to rise 5.5% worldwide in 2026, following a relatively flat 2025, according to EMARKETER’s forecast.
• Meanwhile, bargain hunters will continue to seek discounts and loyalty promotions to cope with economic challenges from tariffs and cost-of-living pressures.

“Consumers have already adapted to higher prices, but in 2026 they’ll be far more ruthless about what earns their spend,” said Leah Brier Bienstock, head of strategy at Redscout. “We’ll see sharper trade-down on anything undifferentiated, and trade-up for brands that deliver emotional or experiential value. Expect smaller, tighter product assortments, more private label, and a much higher bar for anything claiming to be ‘premium.'”

Justifying expenses

Industry leaders say retailers will be passing on at least some tariff-related price increases to consumers. This raises the stakes when consumers decide what to buy, experts predict.

“Prices are up, budgets are tight, and even small purchases now come with a quick internal checkpoint: Can I justify this?” said Abigail Olivas, head of strategy at No Single Individual. “It’s not about moralizing spending, it’s simply the reality of people weighing what feels necessary and smart in a more expensive world.”

Cheaper alternatives

In 2026, some consumers will still pay for luxury goods. The change retailers will have to navigate is a “widening split between ‘comfort-first marketing’ and what could be called ‘the nihilistic splurge,” said Griffin Smith, director at Ogilvy Consulting and head of Ogilvy Behavioral Science, North America.

“Effective brands will reduce anxiety, reassuring strained consumers with reliability, simplicity, and predictability,” Smith said. “But some segments, like younger adults, may respond to a countervailing YOLO mindset: When the future feels unstable, immediate joy can feel even more important than long-term planning. The opportunity here is to position purchases as legitimate emotional upkeep rather than indulgence.”

Store brands, resale, and rentals

Retailers capturing the lower end of this economic split will likely improve private label or resale offerings, according to experts.

“Consumers are expected to increasingly favor private labels (store brands), which are being positioned as quality alternatives to national brands, especially in essentials like food and household goods,” said Kaila Vallee, executive vice president at Rainstorm Direct. “We expect to see a rise in the circular economy and consumers embracing resale, repair, and secondhand purchases to offset higher costs in fashion and electronics.”

Secondhand ecommerce platforms and shops are poised to gain from this affordability gap. US fashion online resale platforms sales will climb 13.7% this year to reach $17.17 billion, according to EMARKETER's May 2025 forecast.

“We're seeing equal enthusiasm for the hunt itself, the thrill of discovering vintage pieces, and a genuine desire to reduce waste and maximize value in an increasingly resource-constrained environment,” said Ellen Jackowski, chief sustainability officer at Mastercard. “This shift reflects a reimagining of value, where pre-owned isn't second-best, but often the first choice.”

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