Millennials are reaching middle age, and baby boomers are retiring. Enter Gen Z and Gen Alpha, the customers of tomorrow. These digitally native generations are reshaping the retail landscape with their unique preferences, values, and behaviors. How can brands effectively connect with them while maintaining their appeal across all generations?
Gen Z: Born between 1997 and 2012, Gen Z makes up approximately 20% of the U.S. population. They wield significant spending power—estimated at $360 billion globally. Raised in the digital age, they’re highly engaged online, environmentally conscious, and value authenticity and inclusivity in brands.
Gen Alpha: Following Gen Z, Gen Alpha includes those born from 2013 onwards. By 2030, they’ll outnumber Gen Z and hold even greater sway in shaping consumer trends. As the first generation entirely born into a world of AI, smartphones, and virtual experiences, they’re naturally attuned to the seamless integration of physical and digital realms.
During NRF 2025, retailers and brands expressed their focus on marketing to the younger generations. This was a central topic during the event. Here are some of the initiatives well-known brands have taken to market to the consumers of tomorrow.
Influencers are key to engaging both Gen Z and Gen Alpha. For example, Claire’s “The Collab” campaign invited young creators to become integral to the brand’s storytelling, fostering authenticity. Similarly, Sephora’s “Sephora Squad” highlights creators from diverse backgrounds, leveraging their unique voices to connect with younger audiences.
Roblox, a platform with nearly 90 million daily active users, exemplifies the power of virtual influencers and community engagement. Collaborations, like Fenty Beauty’s in-game lip balm laboratory, merge digital and physical experiences, enabling users to customize products in-game and see them materialize in real life.
The lines between online and offline retail are blurring for these generations. Coca-Cola has experimented with augmented reality (AR) experiences linked to its physical products. By scanning QR codes on bottles or cans, consumers can access interactive content, games, or virtual experiences, creating a dynamic connection between the physical product and digital engagement.
Tokinomo Visibubble allows brands to combine the physical and the online environment and offer a unique experience for their shoppers. With an engaging display that features a QR code, brands can implement creative promotional campaigns.
Price Chopper and McKeever's Market & Eatery have introduced AI-powered smart shopping carts, known as Caper Carts, developed in collaboration with Instacart. These carts allow customers to place items without manual scanning, automatically charging the total to their accounts. The carts also display digital coupons and personalized recommendations, enriching the in-store experience.
Retail media networks have emerged as effective channels to reach Gen Z and Gen Alpha. By leveraging first-party data, retailers can deliver personalized advertisements that resonate with these tech-savvy consumers. Using shoppable content on social media makes it easy for younger shoppers to buy quickly and conveniently.
In-store retail media is also gaining traction as a way to reach these generations. For example, Walmart’s in-store displays use digital screens to showcase targeted advertisements based on location and customer demographics. These displays not only enhance the shopping experience but also provide brands with a direct line of communication to consumers as they make purchasing decisions.
Similarly, Kroger’s in-store media program uses shelf-edge screens and audio ads to inform customers about promotions and product features while they shop. CPG brands like Coca-Cola and Unilever have effectively leveraged such systems to boost product visibility and drive sales.
Both Gen Z and Gen Alpha prioritize sustainability, influencing grocery retailers and Consumer Packaged Goods (CPG) brands to adopt eco-friendly practices. For instance, Whole Foods Market is focusing on climate-friendly and sustainable agriculture practices, with over 70% of Gen Z supporting these initiatives and about 55% willing to pay a premium for sustainable products.
Similarly, ALDI is committed to phasing out harmful chemical refrigerants, planning for all stores to adopt natural refrigerants by 2035, aiming to achieve net-zero greenhouse gas emissions by 2050.
On the CPG front, brands like Unilever have piloted sustainable packaging programs to reduce plastic waste, recognizing the importance of sustainability to consumers from the Millennial and Gen Z generations.
Retailers and CPG brands must transparently communicate their commitments to environmental and social causes to resonate with this audience. A report by GlobalData highlights that sustainability is highly influential in driving purchase decisions among Gen Z and Gen Alpha consumers.
While Gen Z and Gen Alpha are reshaping retail, brands must also cater to older generations. Baby boomers and millennials still command substantial spending power. Tailoring experiences to meet the diverse needs of all age groups ensures long-term brand loyalty.
A successful retail strategy acknowledges the distinct preferences of each generation. For instance, while Gen Alpha might gravitate towards virtual shopping experiences, millennials may value personalized email offers. Balancing digital innovation with human connection will remain critical.