Retail Radar: Gen Z Is Rewriting the Rules of Retail and Brands Are Racing to Catch Up

The shopping habits of Gen Z are no longer emerging, they’re firmly established and they’re turning traditional retail strategies on their head.

Born between 1997 and 2012, this cohort now makes up more than 40 percent of global consumers, and they’re spending with purpose, precision, and a sharply defined set of expectations. According to NielsenIQ, nearly half of Gen Z’s total spending still happens in physical stores, but their path to purchase is anything but conventional.

Offline Still Matters But It Needs to Be Worth the Trip

While Gen Z is fluent in digital, they’re not abandoning physical retail. Instead, they’re demanding more from it. In-store experiences must offer more than convenience, they need to deliver emotion, discovery, and social shareability. Retailers like Kmart have taken note. The chain’s newly refurbished Mount Gravatt store in Brisbane now leads with fashion and beauty zones up front, targeting Gen Z shoppers who want trend-forward visuals before they even hit the racks.

The early results Apparel sales are up, and customer dwell time has increased, a clear sign that merchandising strategy is aligning with the way Gen Z shops fast, curated, and visually driven.

Social First, Search Later

TikTok, Instagram Reels, and YouTube Shorts are shaping Gen Z’s shopping decisions long before Google has a chance. A 2025 report from Exploding Topics found that 47 percent of Gen Z discovers new products via social media, and 58 percent have purchased something they first saw on a platform like TikTok.

Retailers are responding with creator-led campaigns and lo-fi video content that mirrors the organic feel Gen Z expects. In beauty and fashion, brands that once relied on polished editorial are now embracing raw, customer-created content to boost engagement and conversions.

Dupes and Deals but With a Conscience

Gen Z’s frugality is well documented, especially in the current economic climate. “Dupe culture” is surging, with a tenfold increase in social media posts about affordable alternatives to luxury items.

But here’s the twist this generation is price sensitive and values driven. According to Britopian’s 2025 consumer insight survey, 64 percent of Gen Z shoppers are willing to pay more for sustainable products, though most cap that “green premium” at about 10 percent. Transparency around sourcing, labor practices, and even pricing breakdowns is becoming a key differentiator.

Brand Behavior Matters More Than Brand Legacy

A legacy logo doesn’t guarantee loyalty with Gen Z. What does Authenticity, alignment with social values, and a track record of treating employees fairly. HubSpot’s latest research found that 84 percent of Gen Z shoppers are more likely to support brands that care about worker well-being, and 83 percent favor companies they believe respect their data privacy.

In response, retailers are investing in brand storytelling not just through marketing, but across operations. From how returns are handled to how diversity is reflected in leadership, Gen Z is watching.

The Bottom Line

Retailers who assume Gen Z will “grow into” traditional shopping habits are missing the point. This generation isn’t just rewriting the rulebook, they’re tossing it entirely. Their influence is already reshaping merchandising strategies, store design, product development, and brand communications.

In a market still wrestling with cost pressures and digital fragmentation, Gen Z offers clarity stand for something, be easy to engage with, and never underestimate their instinct to click away. Retailers that can meet this moment with authenticity, agility, and bold focus will win not just Gen Z’s wallet but their voice.