AI is setting the pace in UK retail media for 2026 - here's what marketers should do next
UK retail has been through a lot. Tesco Media's We Know the Nation 2026 report calls out the forces pushing stores and screens into their next phase: cultural shifts, cognitive triggers, and the behaviours that follow.
The headline: AI matters, but the edge comes from how you apply it. The winners will use AI to create clearer choices, shorter paths to purchase, and brand experiences that feel human - online and in-store.
Culture and cognition: the two levers to watch
Culture first. Emotions, values, and social ties are influencing what goes in the basket. People still want small moments of joy - as long as it fits their reality.
Then cognition. Shoppers face more options and more noise. They're filtering harder, comparing faster, and redefining what "value" means across price, time, and trust.
Value under pressure
The cost of living crisis hasn't eased, so value is the north star. As Tash Whitmey, Managing Director, Tesco Media and Insight Platform, put it: "Value has never been so important... shoppers now have more choice than ever... customers are making far more intentional decisions."
The takeaway for marketers: protect confidence as much as budgets. Clarity, fairness, and consistency reduce friction - and keep people coming back.
What this means for your retail media plan
- Cut cognitive load. Fewer, better choices. Smarter defaults. Prioritise relevance over volume in search, recommendations, and offers.
- Make AI useful, not flashy. Use it to remove steps: better on-site search, re-order prompts, substitution suggestions that actually make sense, and personalised shelves that respect context.
- Signal value in ways people feel. Pair price with proof: pack-size logic, price-per-unit clarity, trust marks, and social proof. Joy is welcome, but only if it fits the moment.
- Blend brand and performance. Use retail media to build memory and drive action: on-site placements for intent, off-site for reach, in-store screens for cues near the shelf. Plan creative variations for basket size, mission, and time of day.
- Work with first-party data - carefully. Clubcard-style signals make personalisation useful. Keep consent clear, minimise data, and document your model use. See the UK ICO's AI and data guidance for practical guardrails: ico.org.uk.
- Design offers for "sense-making." Frame deals so they're easy to justify: threshold discounts aligned to typical basket sizes, bundles that map to real meals, and swaps that upgrade quality without hidden costs.
- Use AI in creative - with restraint. Draft variants, adapt tone to audience, and auto-optimise placements. Keep human review in the loop to check for bias, brand fit, and plain-language clarity.
- Test the path, not just the ad. Sequence messages across channels (awareness → consideration → cart → repeat). Measure how each step reduces confusion or time-to-purchase.
Measurement that actually moves the plan
- Go beyond CTR. Track household penetration, repeat rate, basket mix, and new-to-brand. Tie exposure to real outcomes, not vanity metrics.
- Lift over last-click. Use incrementality tests, geo splits, or holdouts to isolate impact. Attribute both brand and conversion effects.
- Join online and store data. Align IDs, respect privacy, and build a single shopper view where possible. Even simple SKU-level links can change targeting quality.
- Optimise for clarity. Watch drop-offs, scroll stops, and search refinements. If people hesitate, you likely have a wording, price framing, or choice overload problem.
Practical AI use cases to prioritise
- On-site search and discovery: intent-aware results, query reformulations, and "complete the shop" prompts informed by past baskets.
- Offer orchestration: schedule and sequence deals by mission (top-up vs. big shop), time of day, and seasonality.
- Creative modularity: auto-generate price points, claims, and product swaps inside brand-safe templates.
- Service prompts: concise help content and returns/substitution policy explainers that reduce tickets and anxiety.
Guardrails that build trust
- Consent and choice: plain-language permissions and easy opt-outs.
- Fairness: audit models for skewed targeting or exclusions.
- Transparency: explain why an offer or recommendation appeared. People accept AI if it obviously helps.
Why this report matters for marketers
The core message is simple: use data and creativity together. Culture sets the tone; cognition sets the rules. If your plan gives people balance, connection, and clarity, you win the cart and the repeat visit.
For context, the richest signals still come from real shopper activity. If you're working with similar loyalty data, treat it as a responsibility as much as an advantage. For a sense of how these ecosystems operate, here's Tesco's Clubcard overview: tesco.com/clubcard.
Next steps
- Pick three friction points in your path to purchase and apply AI to remove them.
- Reframe your value story in one page: price, time saved, and confidence signals.
- Set up one clean incrementality test per quarter and protect the budget to run it.
- Upskill the team on prompt writing, data literacy, and retail media fundamentals. If you need a structured path, see this option for marketers: AI Certification for Marketing Specialists.
AI isn't the finish line. It's the infrastructure. The advantage comes from how clearly you help customers decide - and how confidently they feel after they do.
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