Retailers are preparing for a transformative year in 2026 as advances in machine learning, tighter packaging regulations, and shifting consumer behavior reshape both eCommerce fulfilment and the management of returns.

Advances in Warehouse Automation

Industry specialists predict that the focus on warehouse productivity and personalization will be central to fulfilment strategies in 2026. Andrew Scanlon, Head of Sales and Marketing at logistics providers such as Staci, Radial, and Active Ants, highlighted that retailers are under increasing pressure from cost-conscious consumers demanding faster and more affordable deliveries. This pressure has led to a renewed focus on improving the accuracy and speed of picking operations in distribution centers.

To meet these challenges, warehouse management systems are incorporating machine learning (ML) and genetic algorithms to optimize workflows. These systems constantly move stock within automated systems to ensure items are positioned optimally for picking, increasing picks-per-hour while maintaining high standards of quality control.

“Advances in ML are redefining Warehouse Management Systems (WMS), creating smarter workflows that are powered by genetic algorithms,” said Scanlon. “This leads to faster, more efficient fulfilment, with the capacity to increase throughput while improving quality control.”

Personalization and Social Commerce

With social commerce continuing to grow, Scanlon anticipates a surge in post-purchase personalization. The trend is especially evident in categories like health and beauty, where platforms like TikTok influence discovery and purchases. According to data, TikTok users spend 20% more than the average online shopper, highlighting the potential for personalized packaging and promotions.

“As social commerce grows, we’ll see greater personalization in packaging, especially as consumers purchase more items more frequently, but at lower individual prices,” Scanlon said. “Customizing packaging and promotions can help brands increase brand awareness, boost unboxing experiences, and drive repeat purchases.”

Pressure on Packaging

Packaging regulations are also changing the game in eCommerce fulfilment. In the UK, the Extended Producer Responsibility (EPR) scheme has raised the stakes for retailers, pushing companies to reduce the size and volume of packaging in response to government regulations. The EU's Packaging and Packaging Waste Regulation targets the reduction of overpackaging across the continent, creating pressure on businesses selling packaged products in Europe, including UK-based retailers.

Scanlon explained that fulfillment providers are using data to adjust packaging sizes, ensuring that items are packed in the most efficient way without compromising functionality or product safety. By right-sizing packaging, retailers can not only comply with regulatory changes but also reduce waste and improve operational efficiency.

Returns Management and ReCommerce

As part of this transformation, returns management is expected to become a key focus for retailers in 2026. Research from Advanced Supply Chain and ReBound by Reconomy indicates that retailers are now viewing reverse logistics as a strategic part of the customer journey. The top priorities for returns handling include faster processing, lower costs for shoppers, and shorter refund lead times.

In addition to improving customer service, many businesses are focusing on increasing the salvage rates of returned goods and expanding their reCommerce efforts. A third of respondents in the survey plan to outsource returns processing to improve product repair and restoration capabilities.

“As the growth of marketplaces and the push for sustainability continue, returns management strategies must evolve,” said Alexandra Romantseva, Head of Marketing at ReBound and Advanced Supply Chain. “Treating returns as a data-rich part of the supply chain allows businesses to drive better outcomes for customer satisfaction, sustainability, and cost management.”

Local Returns and Circular Economy

Another emerging trend is the rise of local returns consolidation. According to the survey, 35% of professionals in the supply chain rank this as a priority, aiming to reduce the complexity of international returns while improving revenue opportunities. Some 18% of businesses are also exploring ways to generate more revenue from returned goods by improving inventory management and reducing fraud-related losses.

“Consumers’ increasing preference for marketplaces and sustainable shopping will continue to affect returns flows,” Romantseva added. “We are seeing companies embrace this as an opportunity to rethink their returns strategies and integrate them into the broader circular economy, focusing on salvage, recycling, and localizing returns.”

Looking Ahead to 2026

Retailers are preparing for a year of significant transformation in eCommerce fulfilment and returns. With AI and automation driving innovation in warehouse operations, the rise of social commerce influencing purchase behavior, and stringent packaging regulations creating new challenges, businesses must stay agile to succeed. The evolution of returns management into a strategic area of focus, combined with growing interest in reCommerce and sustainability, will be crucial in shaping the future of retail in 2026.