Shopping has changed. The kids who grew up with smartphones in their hands are now driving how stores operate.
And it’s not what anyone expected.
The surprising truth about digital natives
Let’s start with something that’ll catch everyone off guard:
Gen Z shoppers, born between 1997 and 2012, are choosing physical shops over online shopping. A new consulting survey shows 64% (nearly two-thirds) of them prefer discovering new products in actual stores, not on screens.
This is the same generation that once said they’d only shop online. But after years of digital everything, they want to touch things.
They want real experiences!
According to PwC’s analysis of nearly a million transactions, Gen Z cut their spending by 13% early in 2025. They’re being careful with money, but they still plan to spend around £1,000 during holiday seasons.
What Gen Alpha brings to the table
Then there’s Generation Alpha – kids born between 2010 and 2024.
They might be young, but they pack a serious economic punch:
- Direct spending power: They’re spending over £79 billion ($101 billion) of their own money each year.
- Family influence: They influence 42% of all household spending, giving them enormous sway over what brands their families buy.
- Weekly allowance: The average Gen Alpha child has £52 ($67) to spend each week
These kids know technology inside out. But as we showed earlier, most of them enjoy visiting real shops. They want physical products, not digital ones. They use technology to discover things, then buy them in person.
Parents are listening too. When an 8-year-old wants something specific, families often buy it. Over half of parents say their Gen Alpha kids have influenced them to travel to new destinations, make more online purchases, and even give to charity.
Smart retailers are paying attention to what these young shoppers want.
How shops are fighting back with technology
Retailers aren’t sitting still. They’re spending big money on new tech. A 2025 Deloitte study shows that three in 10 retail executives plan to make significant technology investments to modernise their supply chain and store operations.
AI is becoming central to retail operations. Seven in 10 executives expect to have AI capabilities in place this year to personalise customer experiences. They also started seeing results already – retailers using AI chatbots during Black Friday saw conversion rates jump 15%.
Here’s what stores are actually doing:
Smart personalisation
Shops are getting personal with their customers, using AI to understand what people want before they even know it themselves.
- Walmart launched an AI assistant that creates unique homepages for each shopper
- Retailers now use AI to predict what customers will want
- Shops analyse buying patterns to stock the right products
Augmented reality experiences
The AR market in retail is worth £8.7 billion now ($10.88 billion). By 2032, research from Maximize Market Research suggests it should hit £167 billion ($209.26 billion). That’s not hype – it’s happening because it works.
Products with 3D or AR features see higher sales than regular listings. When customers can virtually try things on, they return far fewer items. Less waste, happier customers.
The technology works alongside contactless retail solutions to create smoother shopping experiences.
Better security and access
Modern shops need robust access control software to manage and control who goes where. This helps with both security and creating smooth shopping experiences.
Customers want to feel safe, and retailers need to protect their investments in new technology.
The challenges with technology investment in retail
Throwing money at technology doesn’t guarantee success. The retail industry is pouring billions into digital transformation. Major retailers like Sainsbury’s are partnering with tech giants like Microsoft to implement AI solutions.
But many small-to-medium companies struggle with:
- Old systems that don’t work with new technology
- Staff who need training on new tools
- Customers who get frustrated when things don’t work properly
- High costs with uncertain returns
- Lack of knowledge on how retailers should be making data-driven decisions
Many retailers also regret their software purchases. The technology works, but implementing it properly is hard.
Social media changes everything
Gen Z uses social media as their main shopping inspiration. TikTok hashtags like #TikTokMadeMeBuyIt has billions of views. Instagram and Snapchat are becoming shopping platforms instead of social networks.
Social media followers are powerful customers – 77% of consumers prefer shopping with brands they follow on social media.
Different generations have different habits: Gen Z mainly uses Instagram to research brands, while Baby Boomers stick to Google searches.
The line between entertainment and shopping is disappearing, especially for the new generation.
What this means for the future
Successful retailers understand that technology isn’t the goal. Better customer experiences are.
The shops winning right now combine digital tools with physical experiences. They use AI to personalise recommendations, AR to let customers try products virtually, and data to stock the right items at the right time. These retail technology trends are reshaping how businesses operate and compete.
The retailers that survive will be those who remember that behind every click, scan, and purchase is a real person who wants value, convenience and authenticity. Technology just helps deliver that better.
