Gens Z and Alpha are set to shape the future of retail - Stuart Chalmers

High streets may see fewer shoppers this season, with even website traffic potentially slower than usual. Younger generations are reporting to be increasingly dissatisfied with the traditional shopping experience – both online and in stores. For the first time a new generation of shoppers – Gen Z, born between 1997 and 2009 – spent more time shopping through social media than on the high street in traditional brick-and-mortar stores.

Just behind Gen Z is Gen Alpha – expected to number two billion by the end of this year – whose lives have been intertwined with technology from day one. Gen Alpha might not have the largest wallets just yet, but they certainly have power over those that do. Their influence on economic spending is soon estimated to be $244 billion in the UK alone – 99 per cent of parents seek their kids’ opinions when buying products for them, and 87 per cent of parents consult with their children when making family purchases.

These two generations are reshaping the retail landscape with their unique priorities and expectations. Dynamic, consumer-driven marketplaces, often on social media, are giving rise to “lifestyle commerce” where they can discover, engage with, and purchase products without ever leaving their preferred apps or environments. Rather than searching for products, brands must meet them where they are.

Lifestyle commerce is projected to quadruple in the next five years, accounting for nearly 25 per cent of e-commerce sales by 2025. Accenture found that retailers who tap into this can boost conversion rates up to tenfold. Achieving this, however, will require them to invest in technology that enables interaction with their customers in a way that is personal, conversational and predictive across a range of new platforms and formats. Quality data will also be key – retailers must build a detailed picture of their customer to reach them, rather than relying on them stumbling through the doors.

What’s more, lifestyle commerce is not just about making sales easier; it’s a holistic experience. When surveyed, over half of Gen Z said their favourite brands are those that make them feel part of a community. They care more about how they experience a brand than snagging the lowest price. This shift necessitates a transformation in how retailers interact with their customers. They must generate engaging, informative content that inspires and builds communities, while ensuring quality peer content and reviews build customer trust. A seamless buying process with easy delivery and returns, along with prompt customer support, is also essential.

Traditional retailers may feel that they’re already being left behind, but these trends move so quickly that it’s still anyone’s game. Those who crack social commerce and maximise their online presence in front of Gen Z and Gen Alpha will not only survive the competitive holiday season but also become the names we recognise as the retail giants for many years to come.

Stuart Chalmers, Retail lead and Scotland co-lead for Accenture in the UK