By Taylor Harnois, General Manager, Music Shop 360
As the music industry prepares for another year, 2026 is shaping up to be pivotal for music retailers navigating shifting consumer expectations, technological disruption, and the fast-evolving nature of music creation itself. While 2025 brought challenges, there are opportunities ahead for the retailers willing to adapt.
Three major trends are poised to shape the year: the rise of hybrid retail, the rapid expansion of AI and automation, and the evolution of how younger musicians define and invest in music-making.
Adopting Hybrid Retail as the New Standard
2025 was difficult for brick-and-mortar retailers, with the top 200 U.S. music stores seeing revenue declines and drops in headcount. Foot traffic became more unpredictable, margins tightened, and competition from e-commerce players intensified. These forces are expected to remain prominent in 2026.
In the next year, hybrid retail will move from competitive advantage to operational necessity. The most successful stores will be the ones that treat online and offline channels as extensions of one another, rather than independent silos. This means consistent pricing, real-time inventory visibility, unified loyalty programs, and cross-channel services that allow customers to start a journey online and complete it in the store, or vice versa.
Equally important is the in-store experience itself. Music retailers that invest in hands-on demonstrations, knowledgeable staff, music lesson programs, product demos, and community-building events will see higher conversion rates and repeat visits. When physical store engagement mirrors the convenience of a retailer’s online offering, customers respond.
Stores that will thrive in 2026 will not be defined by square footage, but by how effectively they blend their digital footprint with a human-forward experience.
“2025 was difficult for brick-and-mortar retailers, with the top 200 U.S. music stores seeing revenue declines and drops in headcount.”
Leveraging AI and Automation To Transform the Retail Experience
Artificial intelligence is no longer a futuristic add-on for music retailers; leveraging AI is now a necessity for brick-and-mortar stores that wish to operate better online.
Today, online music retailers outperform physical stores by more than threefold in sales per employee: $685,000 versus $210,000. This gap largely comes down to areas like inventory management or personalized experiences where technology – including AI – can be better leveraged to support both physical and online stores.
As AI becomes more accessible, smaller retailers can begin to automate critical operational tasks that previously demanded increased staffing, time, and guesswork. For example, intelligent inventory systems can dynamically adjust product availability, pricing, and promotional displays based on real-time sales data and seasonal patterns. Instead of relying on manual resets, inventory decisions can be guided by predictive analytics. At the beginning of the school year, for instance, retailers may stock more instruments that align with school music programs, such as trumpets, violins, and flutes compared to other times of the year.
AI is also transforming the customer experience. Consider a scenario where a first-time guitar buyer leaves the store with not only an instrument, but also a personalized beginner’s practice plan curated with AI. They can start their music journey off right, complete with video tutorials, service reminders, and progress tracking. This type of enrichment builds customer loyalty, strengthens the retailer’s education offerings, and may even increase the likelihood of accessory and upgrade purchases in the future.
Similarly, online shoppers are beginning to receive AI-driven product recommendations. For example, they may be browsing for a synthesizer and receiving recommendations for products at different price points. Or perhaps they’re exploring digital audio workstation software for certain types of editing. As consumers continue to grow more comfortable with AI-assisted shopping, they will expect this same level of intelligence for their music needs as well.
AI is no longer an optional experiment. Its ability to enhance staff productivity, drive potential sales, and help smaller brick-and-mortar shops optimize their in-store and e-commerce offerings will be essential in the years ahead.
Adapting to a New Generation of Music-Making Behaviors
One of the most profound shifts we will see in 2026 is that younger consumers are redefining what it means to make music, and these evolving behaviors will directly shape purchasing trends.
Today’s emerging musicians are increasingly gravitating toward creative approaches centered on loops, beats, samples, and digital manipulation. This will influence what retailers stock and how they market to these new audiences. Because of this, they should expect to see software, interfaces, portable recording devices, and hybrid analog-digital products competing directly with mid-tier traditional instruments like guitars and keyboards for consumer spending. While this evolution won’t replace staple instruments, it will diversify the retail landscape.
Offering starter production bundles, hosting beat-making workshops, and curating hybrid tools that merge tactile performance with digital capability will resonate with younger buyers. Retailers that acknowledge and encourage this will be best positioned for growth.
Preparing for a Transformative Year in Music Retail
2026 will be a year defined by the integration of online and in-store experiences, staffing, AI, and the joining of long-standing music traditions with the emerging digital creative culture. Music retailers that embrace these shifts will find new opportunities to differentiate themselves from big-box competitors, connect with their customers, and grow their businesses.
Taylor Harnois is the General Manager of Music Shop 360, where he oversees all aspects of the Music Shop 360 brand, including sales and marketing, customer experience and support, and product and development. Prior to his time at Music Shop 360, Taylor spent many years in the retail and education industries. He holds a Bachelor’s degree in Business Administration and a Master’s degree in Business Leadership.
