Do Gen Z and Gen Alpha Prefer Shopping Online or In-Store?

*This article is kindly contributed by StudioSpace agency, Zebrar.

Do Gen Z and Gen Alpha Prefer Shopping Online or In-Store? The answer might surprise you:

Gen Alpha (2013–2025):
78% prefer in-store shopping, drawn to gamified, interactive retail spaces like AR-enhanced pop-ups and community hubs.

Online platforms? Great for entertainment-driven purchases, but physical stores validate product quality and authenticity.

Gen Z (1997–2012):
64% value in-store shopping for its tactile and social elements, often enhanced by tech like AR mirrors or experiential displays.

They explore online for discovery (hello, TikTok and Instagram!) but frequently finalise purchases in-store for that personal connection.

From CES in Las Vegas to curating a retail tour in NYC for National Retail Federation
Big Show delegates with Marcella Larsen and strolling the streets of NYC & Paris with my Gen Z daughter, I’ve had a front-row seat to the future of retail this past month.

Key takeaway: The world of retail has fundamentally shifted. It’s not just about products—it’s about connection, storytelling, and values. Retailers are no longer simply building stores; they’re crafting EXPERIENCES , nurturing COMMUNITIES, and championing SUSTAINABILITY.

Retail as an experience
Shopping is no longer just transactional. For Gen Z and Gen Alpha, the most exciting retail spaces invite exploration and interaction:

Foot Locker’s NYC Flagship: This reimagined store celebrates basketball culture with tech-driven experiences. The Home Court concept features a 1,500-square-foot interactive space where shoppers explore collections while engaging in gamified activities like the Jump Test, which measures vertical leaps and fosters connection through competition.

Commodity SoHo: Fragrance shopping becomes a creative journey as customers, guided by expert perfumers, blend their own scents, turning routine shopping into a meaningful, personalised experience.

Wilson’s SoHo Flagship: This isn’t just a store—it’s a sports playground, featuring in-store basketball and tennis courts. Shoppers can test equipment or simply immerse themselves in an active, lifestyle-driven brand experience.

POPUP Sephora/Tarte Kindness Café (Paris): This 2 day popup had huge lines waiting to experience the Tarte collab where they could try new products, enjoy tea, pastries and personalised merch. This was part of a 25 city global kindess tour and includes now lives on as a digital experience to explore/immersive and play minigames (ie authentically engage with the brand seamlessly blending the physical and digital).

There are countless examples of experiential retail - the takeaway?

Storytelling. Communities.

Post-COVID, retail experiences need to create a sense of belonging. People don’t just want to buy—they want to feel part of something bigger. For Gen Z and Gen Alpha, this means prioritszing brands that not only foster connection but also demonstrate social responsibility by championing diversity, inclusion, and meaningful contributions to their communities, reflecting their desire to make a positive impact on the world."
British fitness brand Gymshark reimagined its Soho retail presence as a community hub rather than a traditional store. The pop-up offers workout classes, influencer-led fitness challenges, and a platform for groundbreaking collaborations, such as their first-ever modest activewear line in partnership with fitness influencer Leana Deeb .

This collection, featuring hijabs, abayas, joggers, and tunics, is designed to empower Muslim women who prefer modest attire during workouts, positioning Gymshark as a leader in fostering inclusivity within the fitness industry. The Soho space isn’t just about selling gear—it celebrates diversity and unity, bringing fitness enthusiasts together under shared values of health, representation, and belonging.

Leica’s Akademie: Turning Customers into Creators: Camera brand Leica elevates the retail experience through its Leica Akademie, where galleries, photography workshops, and hands-on events bring its legacy to life. Customers don’t just buy cameras—they immerse themselves in Leica’s world. By blending artistry and technology, the Akademie transforms retail spaces into places where enthusiasts connect and celebrate their shared passion for photography.

West NYC is more than just a retail store—it’s a cultural hub that blends sneaker culture, streetwear, and community engagement to reflect the vibrant energy of New York City. Through exclusive product drops, like the West NYC x Adidas Gazelle Indoor “Wizard” sneaker, and community-driven initiatives, such as donating proceeds to the Men at Work Healing collective, the store fosters deep connections with its audience. By hosting events, supporting local causes, and celebrating NYC culture, West NYC creates a space that embodies collaboration, authenticity, and cultural relevance, making it a model for community-focused experiential retail.

Katie Welch Rare Beauty at NRF reminded us that Gen Z loyalty is built on authenticity and community. Her mantra: “storytelling builds connection”

Sustainability: a shared responsibility
The next generation of shoppers is vocal about their expectations for environmental responsibility.

In New York the most thriving store we visited was RealReal - Vintage Designer Wear, exemplifying the growing demand for sustainable luxury through authenticated consignment, reshaping consumer attitudes toward second-hand goods and circular fashion. Its success signals a future where retail embraces sustainability, authenticity, and a shift from ownership to mindful consumption.

Galeries Lafayette Paris Haussmann has partnered with eco-friendly sneaker brand VEJA offering a comprehensive sneaker cleaning repair and recycling service for all brands and types of sneakers. For sneakers that are beyond repair, a dedicated recycling box is available to collect and recycle them responsibly.This initiative is part of Galeries Lafayette’s broader commitment to sustainable fashion, exemplified by their (Re)Store space dedicated to second-hand and responsible fashion. The (Re)Store offers a curated selection of pre-owned items and services that promote the circular economy, allowing customers to buy, sell, and recycle fashion items.

Ikea has introduced platforms for second-hand furniture, extending the life of their products and reducing waste.

Bared Footwear’s B Corp Certification prioritises eco-conscious materials and ethical practices, offering transparency to an audience that values trust. Bared Footwear
Arc’teryx’s Circular Flagship in NYC emphasises circularity by offering services like product repairs and a selection of refurbished items, reducing waste and extending product life.

At Rent the Runway, Jennifer Hyman ’s vision for the future is “a closet as an asset” reimagining consumption, turning clothing into a monetisable resource—a way to “rent, lease, or own” fashion based on lifestyle needs.

Takeaway: These efforts show that sustainability isn’t just good practice—it’s a non-negotiable standard.

**Phygital (Physical + Digital) Integration **
The lines between online and offline shopping have blurred. Consumers expect to move effortlessly between the two, and retailers are embracing technology to make it happen.

Home Depot uses augmented reality tools in its mobile app to help customers navigate the store efficiently. Shoppers can input the product they’re searching for, and the app provides step-by-step directions to its exact location. Beyond navigation, the app integrates project planning tools that allow customers to visualise home improvement projects with AR, ensuring the products they purchase fit their space and style perfectly.

LEGO’s Flagship Store (New York City) provides a perfect example of a blended experience. Visitors can create a personalised digital LEGO minifigure using in-store kiosks, which then print their creation on a physical piece. The store also features AR-enhanced displays that bring LEGO creations to life, showing completed sets in virtual environments, which combine the tactile experience of building with digital storytelling.

Nike’s flagship stores, such as the one in New York, seamlessly integrate digital and physical experiences. Using the Nike App, customers can reserve items online, try them in-store, and even use the app to scan QR codes on mannequins for more details. Smart lockers allow shoppers to pick up online orders without waiting in line, while AR tools in the store enable customers to customise sneakers virtually.

Amazon Fresh stores use “Just Walk Out” technology to remove friction from the shopping experience. Customers scan their Amazon app when entering, and AI-powered cameras and sensors track their items. The system automatically charges their Amazon account upon exit, creating a seamless and cashless in-store experience that integrates physical and digital convenience. In addition AI personalisation delivers highly tailored shopping recommendations.

Takeaway: It’s no longer about “online versus offline.” It’s about creating a cohesive journey that feels natural and intuitive.

Virtual Engagement and Gamification
Gamification and virtual tools are changing the way people shop. These innovations aren’t just for novelty—they’re reshaping how brands engage younger generations
E.l.f. Beauty’s Virtual Kiosk on Roblox is a virtual kiosk where U.S. players can purchase real-life makeup products. Each purchase includes a digital twin for the user’s avatar, bridging physical and virtual beauty experience E.L.F. BEAUTY
Coach launched its ‘Find Your Courage’ campaign within Roblox, featuring integrations in experiences like Fashion Klossette and Fashion Famous 2. Users can participate in styling challenges and purchase digital items modeled after Coach’s Spring/Summer 2024 collection, enhancing brand engagement through interactive virtual fashion Coach

TikTok Shop’s Integration of Gamified Shopping
TikTok Shop has become a significant player in the beauty retail landscape, selling a beauty product every two seconds. By integrating shopping features directly into its platform, TikTok combines entertainment with commerce, driving impulse purchases through viral content and gamified shopping experiences. NOTE Almost all TikTok shop customers said they would make another purchase

AR Try-Ons: Augmented reality allows customers to visualise how a product fits into their lives, whether it’s accessories, makeup, or furniture. This technology not only reduces returns but also builds confidence. (NOTE: Virtual Try on - with the exception of makeup and accessories for head/hands/feet- is still not there. To make a virtual try on work, we require a 3D body scan (the tech is there but the mass adoption is not) , accurate patterns/measurements for each size per garment, and accurate physics in cloth simulations to represent how the fabric would fit on the body. We will get there, but we are not there yet.)

Virtual Products: Digital goods are becoming mainstream in gaming environments, showing that ownership isn’t limited to the physical world. Gen Z and Alpha value digital self-expression as much as physical fashion and are willing to invest in virtual fashion items to personalize their online identities, particularly in gaming and social media environments.

Takeaway: Gamification isn’t about trends—it’s about creating new ways to engage and connect, fostering brand loyalty.

AI: Revolutionising Retail

Of course, AI was a hot topic at both CES and NRF. AI is revolutionising retail, not just as a tool for operational efficiency but as the key to transforming how brands engage with their customers.

Personalisation at Scale: AT CES Gulen Bengi of Mars noted that two-thirds of consumers want meaningful, personalised relationships, and over 80% of Gen Z expects brands to enable co-creation. Mars is delivering on this by combining AI with creativity—for example, their Snickers campaign used generative AI to create personalized “roasts,” blending humor with technology to engage customers at scale.

These moments show AI’s potential to humanize experiences, not just optimize them - and achieve up to 70% higher conversion rates, showcasing the power of AI-driven personalisation.

AI personal stylists will enable every brand to provide the sort of personalised in store experience currently only enjoyed by the luxury brands.

Customer Lifetime Value (CLV) AI allows retailers to accurately forecast customer value, helping tailor strategies to maximize engagement and profitability. Home Depot, for example, integrates AI to assist homeowners with tailored content and tools that guide them through DIY projects. Their app provides personalised recommendations based on browsing history and project needs, bridging digital and physical experiences. Similarly, brands like Samsung are leveraging AI-powered predictive analytics to optimize customer journeys, offering solutions such as health-focused wearables that integrate seamlessly with smart home devices.

Content Creation AI is transforming the way we create content (copywriting/imagery/video) in everything from OOH, brand films to in store POS and Socials.

Operational Efficiency the amount of ways AI will transform retails operational efficiency is an entire post of its own - but think inventory management, dynamic pricing, supply chain optimisation, chatbots/call centres etc etc

The Store as a Media Channel
OVER 80% OF RETAIL SALES ARE IN STORE, BUT LESS THAN 1% OF AD SPEND IS IN STORE.
Physical stores are transforming into dynamic media channels, seamlessly blending digital and physical interactions. As the integration of shopping and advertising becomes more seamless, retail media platforms offer brands an unprecedented opportunity to engage with consumers at the point of purchase

Direct Access to Target Audiences: Retailers sit on a wealth of first-party data, providing brands with the ability to target customers based on their purchase history and preferences. Platforms like Impulso in Brazil are leading the charge by using consumer insights to deliver hyper-personalised advertising across multiple channels, such as digital out-of-home screens, email marketing, and in-app notification

Monetising Retailer Assets: For retailers, retail media offers a valuable revenue stream beyond traditional product sales. By leveraging in-store screens, apps, and loyalty programs, they can sell advertising space to brands, creating a mutually beneficial ecosystem. RD Saúde, for example, has expanded its network to include thousands of digital screens, solidifying its role in the growing retail media space.

**Enhanced Consumer Experience: **Retail media isn’t just about advertisements; it’s about relevance. When executed effectively, it can guide shoppers to discover new products or promotions that genuinely align with their needs. The integration of health and wellness data into retail media campaigns, as seen in Impulso’s case, adds a layer of trust and value for consumers.

Scalable Innovation: Retail media’s ability to operate across multiple platforms—physical stores, apps, and online marketplaces—makes it a scalable solution for brands. For example, TikTok Shop combines social commerce with retail media by allowing brands to promote and sell products within the app through shoppable videos.

Driving Measurable Results: With real-time analytics, retail media offers clear insights into campaign performance. Unlike traditional media, this channel allows brands to track conversion rates, ad engagement, and even sales uplift directly tied to campaigns, ensuring accountability and ROI

Example: Rare Beauty’s use of in-store staff to host live streams is a simple yet effective way to engage customers, providing personal insights into products and creating an interactive shopping journey.

Influencers sell
“I wanted to dress not just rockstars but the fans too.” It was news to me that Tommy Hilfiger invented “fashiontainment”—the fusion of lifestyle, pop culture, and tech-driven shopping experiences? From dressing rockstars and sports icons to creating co-designed collections with celebrities, Hilfiger was reshaping retail long before “disruption” became a buzzword.

As we all know, by leveraging their authenticity, trust, and direct connection with their followers, influencers play a pivotal role in shaping consumer behaviour, especially among Gen Z and Gen Alpha…. It will be interesting to see how the advent of AI Influencers plays out.

Nostalgia
My 20 year old daughter spent more time checking out the Nintendo store, salivating over vintage cameras in the Leica store and rummaging through vintage stores for vinyl, jewelry and clothing. In this fast paced, high tech digital, Al world, the younger generation are looking for authentic analogue.

###CASE STUDY: LEICA
There is a lot to digest in here -,so I want to use a real world example to illustrate how the above principles translate into profit:

Leica, premium German camera and optics brand , founded in 1914, has adeptly evolved from its analog roots to embrace digital innovation, appealing to new generations of photographers. With 120 stores globally, the flagship store in New York City’s Meatpacking District exemplifies this evolution:

Community: The Leica Gallery New York serves as a cultural hub, hosting exhibitions and workshops under the Leica Akademie program. These events unite local and international photographers, fostering a vibrant community centered on a shared passion for visual storytelling. (community)

Sustainability: Demonstrating a commitment to sustainability, Leica offers a selection of pre-owned cameras and lenses. This program not only provides customers with access to high-quality equipment at reduced prices but also promotes the reuse of precision instruments, aligning with environmental conservation efforts.

Experiential: Spanning over 3,000 square feet, the flagship store offers immersive experiences, featuring a photographic gallery downstairs and an upstairs multipurpose area that can be used as a fully equipped photo studio, a curated library, a space for workshops etc. These features allow visitors to engage directly with Leica’s products and heritage, transforming the store into an interactive space that goes beyond traditional retail.

Nostalgia: Amidst the digital age, there’s a resurging interest in analog photography. Leica acknowledges this trend by featuring its classic film cameras, appealing to enthusiasts who appreciate the tactile experience and unique qualities of film photography. This embrace of analog technology resonates with both seasoned photographers and a younger audience seeking authenticity.

Influencer Collaborations: Leica collaborates with esteemed photographers and influencers, such as Elliott Erwitt and Ralph Gibson, who participate in store events like panel discussions and book signings. These collaborations enhance the brand’s visibility and credibility, attracting diverse audiences and fostering a deeper connection with the photographic community. In fact the store Manager, Robert Tirrell Jr. is himself a photographer.

This approach has contributed to their financial success, with the company achieving a 14% revenue increase to €554 million in the 2023/2024 fiscal year—the highest in its history.

**Wrapping it up: Retail’s Future is Personal **
It’s about creating spaces that feel human, where technology supports rather than replaces, and where storytelling drives every interaction.