Gen Z and the next-generation consumer

Gen Z consumers this year plan to cut their holiday spending by nearly a quarter. This is a stark contrast to last year, when their average spend rose 37% from 2023, according to PwC’s holiday outlook.

Older generations are at least maintaining their plans, more or less. Millennials plan to spend about 1% less on average, while Gen X shoppers plan to spend 2% more and baby boomers plan to spend 5% more.

Gen Z’s pullback is set to drag overall holiday spending down 5%, the first drop since 2020, per the report. This differs from Deloitte’s expectation for holiday sales to rise up to 3.4%.

It’s true that Gen Z consumers, whose average age PwC pegs at 22, increasingly have financial obligations related to adulthood, including student loans and having families. But this is also a generation with a fundamentally different attitude toward consumption, according to Ali Furman, consumer markets industry leader at PwC US.

“What we're seeing is a generation that's growing up, getting a bit smarter about budgeting and more intentional about spending,” Furman said by video conference. “They're known to ride social-driven trends, and I think retailers really need to prioritize some of the novelty and value that they care about, through limited drops, treasure hunts, affordable collaborations on social — to excite them and balance their demand for both uniqueness and price.”

Price, in fact, is “Gen Z’s love language,” according to Furman. This generation doesn’t hesitate to trade down, and in fact seeks out dupes or secondhand items, Furman said.

“It's important to emphasize a shift in generational behaviors,” she said. “It's this value-oriented consumer that we've been talking about for over 24 months is really kind of normalizing. It's smart shopping, stretching your budget, perhaps spending earlier in the holiday season, like we saw with Halloween, that ‘Summerween’ period. That's an important strategy that we think will be employed for the holidays as well by retailers.”

Baby boomers are beefing up their budgets the most — their spending fell 2% last year — and are also the fastest-growing cohort buying online, according to PwC’s research. But majorities in all generations are thinking in terms of value this year, with Google searches for “discount” and “coupon code” growing by 11%. Nearly 80% are seeking less expensive alternatives and 65% are looking for discounts on seasonal merchandise after the holidays.

Indeed, deal-seeking is set to continue into 2026: 84% of consumers plan to cut back in the next six months, citing rising prices, new tariffs and the higher cost of living, per PwC.

“It makes sense that retailers are trying to meet the consumers where they are and provide discounts and sales outside of just the traditional large holidays,” Furman said.

At an auction house in China in early June, bidders gathered to test their luck and their wallets at snagging one of the largest, and rarest, versions of a Labubu. Standing tall at four feet and four inches, the trending doll sold for $150,324 in a one-of-a-kind auction that broke records. 

Labubus have taken the world by storm, embraced by consumers and celebrities alike. From Blackpink’s Lisa to Dua Lipa and Cher, the scary yet cuddly monster doll has taken over social media and pop culture as the newest must-have, drawing demand to the retailers that sell it. Grammy award-winning artist Lizzo even shouted out the toy in her latest verse on the “Whim Whamiee” remix by Pluto and YKNiece.

Lizzo raps, “can't even outdress my Labubu.” 

Analysis of Google search data by SEO consultant Jack Genesin shows that, in late May, worldwide searches for Labubus were projected to increase by 347% compared to the past year.

“While the surge in interest is fun to watch, it also raises the question of when enthusiasm tips into obsession,” Genesin said in emailed comments. “Labubu dolls can be pricey, with some limited editions and resales fetching hundreds of dollars.”

Labubus, which can quickly sell out, are available on Pop Mart from $28 for a plush pendant to some mega-sized dolls priced in the thousands, all depending on size, type and exclusivity. Miniso, GameStop, Box Lunch and H Mart also sell blind boxes and similar figurine collectibles that are exclusive to their stores. Though many of these toys are sweet and cuddly on the surface, the fight to retrieve them can be intense. In the U.K., some Labubus have been pulled from Pop Mart stores following safety concerns and reports of customers fighting for the dolls.

The current obsession with Labubus builds on toy trends of retail’s past such as Beanie Babies, Furbies, Tamagotchi, Pokémon and Troll Dolls of the '90s and '00s. However, toy trends and how fast they’re changing are now impacted most by social media and influencer culture, according to Katriina Heljakka, an expert and researcher in toy cultures and play from the University of Turku in Finland.

Gen Z, who is likely driving the Labubu trend, Heljakka said, see their trinkets as both a discretionary purchase and an affordable luxury. 

“Gen Z has been surrounded by game cultures and gamification as part of services all their life and therefore it is no surprise that the game of hunting for limited toy editions is enthralling,” Heljakka said via email. “However, this logic is not new to the toy market, thinking back to some toy lines of the past, like Beanie Babies in the 1990s, which became sought-after toys in adult toy player circles.”

The collection obsession

Even though consumer sentiment has dropped and consumers have pulled back on discretionary spending, the Labubu trend is a rare case of shoppers justifying their purchase.

“The ambiguity of toys lies in the fact that they can simultaneously exist in two different economic and emotional categories,” Heljakka said. “First, the ‘expensive collectibles’ category that has cultural, emotional, and at times, financial weight. And second, they can be perceived as ‘impulse buys’ or novelties/trinkets that function as treats as part of social media fads.”

As tariff announcements continue to impact the economy and all sectors of retail, Heljakka said that for toys, companies may shift production to other countries or engage in licensing programs as solutions to avoid tariffs. For Labubu, increasing inflation and tariffs could mean a declining interest in Labubus from a Western perspective. 

However, Heljakka noted that toy aficionados are proficient in avoiding excess costs and may travel abroad to make purchases or buy from secondhand markets.

Toys are an affordable luxury speaking to an owner’s whimsical lifestyle compared to designer clothing and accessories that are considered more “serious and unattainable investments,” Heljakka said. 

Though rare and limited-edition Labubus exist, doll owners have taken it upon themselves to customize their own Labubus with eyelash extensions, rhinestones, acrylic nails and clothing sporting logos from luxury fashion houses. 

@heysnackgang Customize my first labubu! #labubuthemonsters #labubu #customizedlabubu ♬ Pop Muzik - M / Robin Scott & Robin Scott

The customization, personalization and assignment of an aesthetic to each Labubu is true to Gen Z’s nature of hyperawareness around individuality. Gen Z, which experts say is leading the trend, tends to indulge in “emotional consumption,” or spending that is driven by emotions like nostalgia. As they collect, they're not exactly “playing” with these toys the way kids do. They are more so collectibles that feed into nostalgia's influence over purchase power, which Gen Z in particular is susceptible to, according to market research firm GWI. 

It feeds into the kidult trend, which acknowledges adults who embrace their inner child through purchasing toys, despite being all grown up. A 2023 survey from Sago found that 60% of U.S. consumers in a survey cited their nostalgia for childhood as the No. 1 reason they collect toys and related merchandise. 

Why we collect

Many of these toys aren’t actually being played with by adults, but instead collected as keepsakes and admired on shelves. Collectibles are designed to be poseable, portable and photogenic, per Heljakka. 

But why hobbyists collect digs deeper into the psyche behind adult trinket enthusiasts.

Similar to the mini effect in beauty products, most cutesy trinkets also happen to be small and handheld, making shelving and displaying easier. Since there’s a new trending collectible every so often, it's easy for trinket consumers to fall into the habit of overconsumption. Because various toys speak to different aesthetics across Gen Z consumers, there’s a vast market of figurines to choose from and for consumers to identify with.

Shoppers buy toys for different reasons, according to Heljakka. While “hardcore” collectors may consider the habit an investment from seeing monetary value in toys, everyday players use toys to connect.

“Most often toys are bought because of reasons tied with lifestyle — adults want to express their playfulness, fandoms or just love for toy brands in a visual, material, and social way,” Heljakka said. “Toys are visually intriguing objects and spark conversations. Some consider toys to have therapeutic value, and they are anthropomorphized or zoomorphized, treated as ‘human’ or ‘animal’ companions. What drives this behavior are personal needs and needs to belong in communities.”

Heljakka, who authored research on adult toy hobbyists, describes both collecting and “dis-playing” as their own forms of play. Just because these items don’t “do” anything doesn’t mean they aren’t being played with, according to Heljakka.

“In my research I position collecting as a type of play,” Heljakka said. “Character toys are playthings from the beginning as they have been given a name and some kind of backstory. This gets adult toy players’ imaginations going to extend the stories of the toys and also to make them more personal. All collecting, customization, and creative storytelling that goes on with the toys is play for me as a researcher of interactions with toys.”

The “ugly-cute” aesthetic and “quirky edginess" of the Labubu make the dolls’ potential longevity an interesting case, according to Heljakka.

Labubu could find a long-term position in the market as it follows the aesthetic of previous mass-market toy types like Troll Dolls, UglyDolls and the Gloomybear, piquing similar consumer interest. However the Blythe Doll, for example, debuted in the 1970s and only gained popularity among collectors in recent years. 

When considering where popular culture is in the lifecycle of the Labubu, Heljakka said the trending doll could fade from the spotlight as it reaches oversaturation from influencers. 

“It is intriguing how character toys represent the human and societal condition in their aesthetics,” Heljakka said. “In today's world, we continue to smile, but through gritted teeth and wide eyes (like Labubus), and on our toes, alert and just waiting to see what happens next. Rather than predicting how long the Labubu trend will last, I would predict that when the ongoing crises settle down, this will also be reflected in the toys. Then perhaps, the grin of the toy is replaced by a smile.”

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By Fetch

For a generation that’s grown up with infinite choice and instant gratification, loyalty looks nothing like it used to. Gen Z, the most digitally fluent and value-conscious cohort in history, is rewriting the rules of engagement. For retailers, the message is clear: simplify, personalize and gamify—or risk becoming irrelevant.

If your loyalty program still relies on physical cards, paper coupons, or delayed gratification, you’re already behind.

Loyalty, reframed

Gen Z views loyalty not as a long-term promise but as a series of short-term wins that build habit. According to the Fetch x Digitas Modern Loyalty Marketer’s Playbook, nearly 8 in 10 prioritize speed to reward and 62% feel emotionally connected to programs that deliver surprise bonuses—not just scheduled perks.

They don’t “join and wait.” They join and evaluate—scanning for instant value and leaving if it’s not there.

Winning programs meet them with:

• Instant onboarding
• Real-time earn feedback (“You just unlocked $2.50”)
• Progress tracking tied to dollars or days—not abstract points

They want to feel the payoff. Fast.

Gen Z is reshaping the value equation with 78% actively seeking creative ways to save, and 69% getting excited by leveling up or earning bonuses. This isn’t just about discounts; it’s about momentum.

Aggregator platforms like Fetch meet this moment by turning everyday shopping into a gamified rewards journey where consumers can stack value, accelerate earning and engage across brands in one seamless experience. For brands, this isn’t just a loyalty play, it’s a modern acquisition and retention engine built for a generation that expects more, faster.

Behavioral > demographic segmentation

While Gen Z has become the poster child for loyalty disruption, the broader takeaway for marketers is this: consumer behavior now transcends age. Across age groups, most consumers want programs that are simple, fast to reward and save money automatically.

Behavioral segmentation beats demographics:

• Minimalists want clarity and low effort
• Loyalists stick to a small set of trusted brands
• Optimizers engage when the math makes sense
• Strategists love stacking and maximizing value

These aren’t theoretical personas—they’re influencing app downloads, redemption rates and long-term retention right now.

Gen Z isn’t a passive audience. Gen Z often falls into the “strategist” or “optimizer” camp—savvy, flexible and quick to shift between apps based on value.

This group is also more likely to toggle between brands and apps based on utility. Specifically, 64% want "All points, cash and rewards tracked in one wallet" and 53% want the "ability to stack or combine savings across brands." That makes traditional loyalty mechanics or delayed gratification tactics feel obsolete.

Retailers that deliver quick rewards, low effort and clear value can layer in innovation without alienating their base.

Loyalty is a loop, not a ladder

The next-generation loyalty program isn’t about working your way up. It’s about getting something meaningful right away, then seeing a path to even more.

Gen Z expects that. Increasingly, everyone else does too.

For retailers, the playbook is clear: design loyalty like you’d design a great product—intuitive, rewarding and ready to prove its worth in the first five seconds.

Because in today’s market, you don’t earn loyalty—you build it, every day.

*Data sourced from Digitas x Fetch Modern Loyalty Marketer’s Playbook (Oct 2025)

Older Gen Alpha consumers are now in their tweens and are demonstrating purchasing power and influence over what their family purchases. Older Gen Alpha consumers between the ages of 9 and 13 like to shop and influence purchases, with 68% owning a luxury product by the age of 10, according to Razorfish data. This generation was born between 2010 and 2024.

The cohort puts a heavy emphasis on beauty products, regardless of gender. One-third of Gen Alpha tweens have more than three beauty products for daily use and 73% are interested in teaching a parent about skin care, according to the report.

“Gen Alpha: A cohort of influential tweens” found that this group holds significant sway over purchases made by parents. Over half, 61%, have the final say on which car their parents purchase and 61% have a big influence on what their family eats.

However, it would be a mistake to loop this generation in with pervious ones as their values around spending can vary. For example, Gen Alpha shows less interest in socially conscious and sustainable purchase choices, per Razorfish, with only 38% saying they would pay a premium for an eco-friendly vehicle.

The study was conducted in partnership with GWI and was conducted in the U.S. between October 2024 and November 2024. Approximately 2,300 kids between the ages of 9 and 13 participated.

Beauty has captured the attention of Gen Alpha tweens, regardless of gender. Nearly half (45%) of Gen Alpha tween boys are interested in skin care, 69% want to prevent wrinkles and 25% have a skin care routine that consists of three to five products. Seventy-five percent of Gen Alpha tweens overall are interested in social media beauty content and 38% make their own beauty content, according to the report. 

However, Gen Alpha’s interest in beauty and skin care comes with concerns. Over 30% experiment with beauty products which contain ingredients intended for those three times their age, including retinol and collagen. The research indicates that this age group isn’t overly aware of the ingredients in the products they use, with over 50% saying they have little knowledge on the subject. This doesn’t stop the 72% who want to teach their friends about their routine, according to the report.

Gen Alpha values inclusive representation, with 63% saying it is important. At the same time, 80% have used a social media filter. Additionally, while living much of their life online, two-thirds prefer to pay a premium for real-life products over digital ones. 

For marketers looking to reach tweens, recognizing older Gen Alpha consumers as key decision makers is important. Marketers should also acknowledge that Gen Alpha doesn’t follow traditional gender roles and spends a lot of their life online, according to the report.

Value, cost and well-worn tropes are dominating back-to-school marketing this year. While some would argue that there’s comfort to be found in the familiar during a chaotic period, Gen Z retailer American Eagle is learning firsthand that one person’s comfort can be another’s exasperation. For marketers strategizing ahead of the new school year, the backlash to American Eagle’s big bet on A-lister Sydney Sweeney spotlights the challenge in finding the right message to meet the current moment.

“Sydney Sweeney Has Great Jeans” is designed to help American Eagle resonate with a broad audience and includes prominent out-of-home displays and digital activations. However, wordplay in the campaign that swaps “jeans” for “genes” has sparked backlash for what some see as the promotion of racist ideals, while others have criticized the effort for its sexual overtones. The campaign also raises questions about whether or not marketers have fallen out of touch in their chase to land the sale. 

“By using a broadly appealing celebrity and a simple play on words, American Eagle seems to have attempted to speak to everyone, which ultimately means they spoke to no one in a meaningful way,” said Myles Worthington, founder and CEO of full-service marketing agency Worthi, in emailed comments.  

American Eagle is one of dozens of brands attempting to win back to school in a tricky retail environment. Social media is playing a dominant role in the chase for Gen Z, providing a channel for driving both online engagement and in-store traffic. Forward-thinking marketers have also sought to build affinity with the rising Gen Alpha cohort — and the key could be through their millennial parents. Underpinning these seasonal efforts are a focus on cost and value as brands attempt to resonate with budget-conscious consumers.

“There’s nothing new going on,” said Otis Gibson, founder and chief creative officer of global brand consultancy Gertrude. “I think innovation as a whole seems to be slowed down in terms of new … in any facet, no one wants new when things are rocky.” 

Consumers and brands put value first

Families this season plan to keep budgets tight, with overall back-to-school spending expected to be flat year over year at $30.9 billion, according to Deloitte’s annual survey of the occasion. Nearly half of parents are planning to spread out their back-to-school purchases over time to better manage their budgets, with average spending expected to increase in late August and September compared to 2024 levels. 

A bleaker forecast comes as economic expectations dip to their lowest level in the past five years, per Deloitte, making a focus on cost and value paramount for brands. Back to school can also have less flexibility than other sales windows like the holidays, where it’s easier for families to adjust the number of gifts they need to buy, researchers explained.

“This is really deep — my kids need these things, I have to get them,” said Lupine Skelly, retail research leader at Deloitte, of back-to-school products. “They don’t have a ton of wiggle room to actually cut the items, so that makes the price point more important.”

Value has been at the center for brands including Target, which launched dual back-to-school efforts in June. The first, “Hey Mom, I’m at Target,” highlights perks of the Target Circle 360 program for college students while featuring young content creators as they navigate the complexities of dorm room living. The second campaign, “All of the Above,” made with creative agency Anomaly, emphasizes products that can appeal to parents, teachers and younger kids and features collaborations with teacher content creators.

Value and cost lead among creative trends this season, explained Gibson, noting that the period has seen “more of the same” and a lack of new features, products and benefits promoted. However, as trade wars and recessionary fears loom, the comfort found in familiarity could be exactly what consumers are looking for. 

“We’re hyper sensitive now, because it’s every day we’re hearing about tariffs,” Gibson said. 

Social-first advertising sways Gen Z

A social-first mentality this back-to-school season is evident among advertisers and mirrors broader industry trends, Gibson said. Social media advertising spending in the U.S. is expected to top $82 billion in 2025, up from $75 billion the year prior. Forty-one percent of shoppers plan to use social media in their shopping journey this season, and those who do typically spend nearly two times more than those who don’t, per Deloitte. 

Social media is in full focus for the second iteration of JanSport’s seasonal campaign, “Always With You,” which asserts the backpack maker’s status as an everyday companion for students. Launched in June, the effort was developed for platforms like TikTok and YouTube and follows a successful first run that led to the brand's highest-grossing sales day in its 57-year history. Key to the campaign are a series of musical spots that blend the cringeworthy humor favored by Gen Z with relatable chaos in hopes of stopping them mid-scroll.

JanSport’s campaign, made with agency Party Land, has already shown signs of growth over 2024’s push, including higher interaction and longer view times, said Lindsay Read, the brand’s head of marketing. JanSport’s strategy was informed by Gen Z consumer insights and its view of TikTok as a content playground, not just a media channel. It measures success through views and other metrics like saves, shares and comments. 

Some marketers have also focused their social media efforts on driving consumers into stores by partnering with big brands like Walmart and Target, said Emily Brown, associate director of strategy at Billion Dollar Boy. The strategy is supported by the insight that Gen Z prefers to shop in-person more often than their millennial or Gen X counterparts, and often includes leveraging influencers for in-store haul videos.

“That’s where they’re putting a lot of those efforts in … getting people to have their brand on their mind as they go through that first big back-to-school shopping haul,” Brown said. “Even those brands that you could go straight to their website and buy directly from them are still trying to put all their eggs in the Target basket or the Walmart basket.” 

The approach could appeal to parents seeking the convenience of a one-stop shop experience, with nearly one half of back-to-school shoppers planning to spend the most at mass merchants, per Deloitte. 

Brands compete for Gen Z

A focus on in-person experiences is at the heart of Urban Outfitters’ campaign, “UO Haul.” The effort catering to Gen Z began in May with a New York scavenger hunt that led to a fleet of trucks with glass displays showcasing “hauls” fashioned for various dorm room aesthetics. The campaign drove around 10 million organic social media impressions within the first two weeks of its launch, said Head of Brand Marketing Cyntia Leo.

“We know that IRL experiences matter to this Gen Z customer, they want to get out in the world, they want to experience fun, exciting things,” said Leo. “We think that it also creates more of a lasting memory for our customer.” 

The second phase of the campaign kicked off in July with “Special Delivery,” a series of events meant to celebrate recent graduates. The concept was inspired by the thousands of letters the brand receives each year from students sharing their feelings about the year ahead and includes a partnership with U-Haul to assist with moving, along with pop-up shops that will roll out in key college markets. 

The retailer also launched a Dream Dorm Makeover Contest on Pinterest in partnership with HGTV. Additionally, Urban Outfitters will be on campuses in August and is bringing back its UO Live experience for a second year to feature Gen Z-favorite artists and creators. The campaign, informed by social listening, is part of Urban Outfitters’ long-running efforts to support college students throughout their journey, Leo explained.

“In the last two years, we really wanted to double down on our offense to really make sure that not only were we supporting as a brand holistically, but we were really looking at key insights on what does this customer need and how can we best show up for them?” she said.

For American Eagle, a celebrity tie-up was key to its campaign, a tactic it has relied on in the past through partnerships with stars including Coco Gauff, Lola Tung, Addison Rae and Jenna Ortega. The retailer’s stock soared the day after its campaign with Sweeney debuted in July — and surged again more recently after the effort received praise from President Donald Trump. 

However, the brand’s effort has continued to be the subject of criticism and seen a poor response from Gen Z. One ad in particular, which has since been removed from the brand’s social channels, sees Sweeney whisper, “Genes are passed down from parents to offspring, often determining traits like hair color, personality and even eye color. My jeans are blue.” Some critics believe the script promotes eugenics by suggesting Sweeney’s blonde-haired, blue-eyed genes are more desirable than others. 

American Eagle’s campaign emerged amid an already polarized political atmosphere, with the current administration firm in its anti-diversity, equity and inclusion stance. That focus could trickle down into the psyches of marketing executives and drive them to be more cautious in their creative output, explained Mita Mallick, a workplace strategist and former head of inclusion and multicultural marketing for Unilever. To avoid missteps, the executive recommends creating an environment more open to feedback, including from more diverse and junior level staffers. 

“Does Gen Z have a voice at the table?,” Mallick said. “The question is, are the people who are writing checks and green lighting this work, are they just so removed from this, or are they also scared of the climate and this current administration and saying that, you know, we’re just going to go back to what was safe.”

American Eagle later released a response on Instagram standing behind its campaign that read, “‘Sydney Sweeney Has Great Jeans’ is and always was about the jeans.” For some, the lack of an apology is seen as a step in the wrong direction. 

“To me, not including any apology to those who they unintentionally offended was weak, and a glaring omission,” Worthington said. “It will be interesting to see what their next move is.” 

The future of back-to-school marketing

While several brands are keyed in on Gen Z, the back-to-school period also provides a valuable time for marketers to connect with older members of Gen Alpha, the generation born between 2011 to 2025, explained Emily Weiss, principal researcher at Gartner. To do so, Weiss recommends appealing to millennial parents and their Gen Alpha children, whose values are still in flux, with messaging that empowers kids and resonates with family values. Parents involve their Gen Alpha kids in small household decisions as early as age seven, per Gartner research. 

“These brands do have the ability to make these inroads with kids fairly early, not in a necessarily invasive way, but because their parents both want their opinions and also do a lot of stuff with them that builds a brand relationship much earlier on,” Weiss said.

One example called out by Weiss is L.L. Bean’s nostalgic back-to-school ad showcasing its backpacks. The spot displays a variety of colorful styles available for the backpack and is set to “Return of the Mack,” a 1996 R&B song by Mack Morrison, a likely appeal to cohorts like millennials and Gen X, the exec explained.

“They kind of were speaking to their own brand values, speaking to the nostalgia of millennials and young Gen X and just getting in their brains to be like, ‘Remember this?’” Weiss said. 

Despite being open to branded digital content, 43% of Gen Alpha parents are very or extremely concerned about the impacts of excessive screen time on kids compared to 35% for other parents, per Gartner. The insight backs Weiss’ recommendation to brands to prioritize more offline, sensory experiences that engage both parents and children.

While millennial parents make up 71% of Gen Alpha’s parent group, Gen Z parents are slowly coming into the fold, giving marketers another opportunity to tap into evolving consumer trends. Specifically, Gen Z parents are more fond of digital experiences than their older counterparts: 30% of the cohort plan to purchase directly on social media, compared to 17% of parents overall, according to Deloitte’s Skelly. The group, which is more likely to use social media in their shopping journey in general, also trusts influencer content almost twice as much as other parents.

As brands map out future back-to-school efforts, those who anticipate and adapt to ever-evolving consumer preferences will be in a stronger position to form deeper connections with the next generation of household decision makers.

“We’ve talked a lot about how [Gen Z parents] are going to kind of reshape back to school,” Deloitte’s Skelly said. “Their preferences are so much more digital, and that’s one of the fun things that’s on the horizon … There’s gonna be a good story here in a couple of years once this younger generation has a little bit more purchasing power.” 

Walmart Realm is being updated with various new immersive storefronts, Justin Breton, Walmart’s head of brand partnerships and emerging experiences, announced last week on LinkedIn. The retailer is starting with a K-pop era theme, followed by Lo-Fi Playing, Rodeo Dreams, Nature Breaks, and Group Woosah.

The refresh supports Walmart Delivers, the company’s in-real-life mobile pop-ups appearing in cities nationwide where shoppers can have interactive experiences including photo booths and giveaways, Brenton said. 

With its Realm update, Walmart aims to draw in more Gen Z and Gen Alpha shoppers.

Since the immersive shopping platform launched in 2024, the virtual space has attracted “millions of younger shoppers,” Breton said. The space facilitates discovery and connects consumers with creator-curated products, mini-games and trend-based storytelling. 

“By blending cultural relevance, interactivity, and delivery convenience, Walmart Realm and Walmart Delivers are redefining what it means to shop at Walmart,” Breton said. “We’re transforming us into a go-to destination for premium, trend-driven products that meet customers where they are.”

Brenton pointed to data regarding young shoppers, including Gen Z commanding over $360 billion in spending power in the U.S., and nearly half of the generation engaging in immersive digital experiences. 

A year ago, the company introduced a selection of dorm room products on Walmart Realm with five immersive virtual dorm rooms ahead of the back-to-school season. Last November, the retailer added four new virtual environments inspired by Pinterest and TikTok trends. 

While retailers have a vested interest in understanding all of their shopper demographics, the industry’s youngest customers are always a source of fascination, even before they fully come into their spending power. They represent the future retailers need to build toward, and their preferences will shape investments in the industry in a variety of ways.

Although the youngest Gen Zs just entered their teenage years, attention is already turning to their successors, Gen Alpha. The group is still reliant on their parents for money, but they’re already influencing purchase decisions. According to Holden Bale, global chief strategy officer of Merkle, almost 75% of Gen Alpha members are already driving purchase decisions.

“I don't know if you've had a conversation with a child recently,” Bale said during a presentation at Shoptalk Spring, noting that in a recent discussion over where to go for dinner a seven-year-old girl “made all the decisions for me. I had no input.”

While it’s too early to say many things about Gen Alpha, if they follow in Gen Z’s path they’ll likely be digitally savvy and have a penchant for in-store shopping. According to Merkle, 81% of Gen Z prefer shopping in person to online, which is higher than every other generation.

In the wake of the conference, here’s how a few different retailers are thinking through the store experience for some of retail’s youngest shoppers.

Sephora

In the era of Sephora kids, the beauty retailer is well aware of the allure of its stores for young shoppers, even as they’re more digitally aware than ever.

“It's about play,” Celessa Baker, vice president of marketing partnerships for Sephora, said of the company’s stores. “Consumers come in to touch, feel, but what we are noticing is they're on their phones. So they are looking at product on their phone.”

Shoppers are checking out ratings and reviews, looking at influencer and creator content, and consuming that information throughout their shopping journey in stores, Baker said. Meanwhile, store associates are there to give guidance and the retailer hosts events and brand days where different companies can educate consumers on a product. Beauty is a tactile space, which makes stores appealing even as online content flourishes. For Gen Z and Gen Alpha in particular, Sephora “is really their playground.” 

“I used to hang out at a mall. It's no different. My daughter wants to hang out in a mall,” Baker said. “Sephora happens to be a trending space right now, so I will take it. You just have to educate the younger consumers on appropriate behavior as they’re in the stores and what that looks like. But I think as long as you are rooted in discovery, in visualization — and you’re a warm and welcoming place, that digital, offline, the content, the storytelling, will ultimately lead to a path to purchase in store.”

Foot Locker

At Foot Locker, appealing to younger generations comes in multiple forms, with Gen Alpha likely shopping its Kids Foot Locker format and older teens graduating to its namesake banner. When it comes to the youngest of shoppers, though, Foot Locker’s approach is two-fold. 

For Gen Alpha themselves, Global Chief Customer Officer Kim Waldmann said the retailer has spent a lot of time looking to understand the group, including their fluency with technology. She noted that Gen Alpha is the first truly digitally native generation, in that they were born with more advanced mobile phones, and they therefore start engaging with YouTube videos, product reviews and other such content early on.

“The point is, by the time that kid is going into the mall with his parents, he already knows about product and brands, right? He already has preferences, and so he's really driving the choice in that store environment in a way that maybe kids didn't in the past,” Waldmann said.

She noted that Gen Alpha kids are more independent than their predecessors, so Foot Locker has designed its revamped Kids Foot Locker locations to allow them to drive their own experience and be able to customize products. But as independent as kids are these days, their parents are still footing the bill.

President Frank Bracken said the retailer has thought of them too, with kids’ activity tables in stores so parents can keep them entertained if they’re shopping for multiple children at once. A technology-enabled sizing experience will tell kids not just what size they are, but how much they’ve grown since the last time they came into the store. The retailer’s store associates are educated on different products and brands, and also expect different things based on the location of the store.

“If you're at Aventura Mall, you're getting a broad swath of consumers where, if you're on 49th Street in Philadelphia, a more multicultural sort of urban setting, you know you're going to get more sneaker mavens who are into basketball and sneaker releases,” Bracken said. “Our store teams, our managers, our striper staff are very acute and aware of those things.”

Toys R Us

Toys R Us’ strategy to appeal to the kids of today, and recover its place in the market after a 2017 bankruptcy that erased its store footprint, includes leveraging its IP in the entertainment industry, hosting in-store events and giving Geoffrey the giraffe a birthday.

Taking inspiration from Sesame Street’s Elmo, Geoffrey is perpetually nine and a half years old, but the toy retailer still celebrates his birthday every year. With a presence across 1,500 stores in 34 countries, Kim Miller, global chief marketing officer for toys at Toys R Us parent WHP Global, says the mascot’s birthday has become “an international holiday.”

Celebrated on Oct. 17, Geoffrey’s birthday has drawn participation from brand partners including Mattel. Toys R Us has also built the giraffe a 1.1 million-strong following on TikTok and has a photo opp with Geoffrey on a bench in every store. Those moves help the brand stay young, despite its growing age.

“You don't want a grumpy 50-year-old giraffe as your mascot down the road,” Miller said, noting that the relationship between fans and Geoffrey is still strong, even for adults who remember the mascot from their childhoods. “We've been to Comic-Con and had 35-year-old men cry when they hug Geoffrey the giraffe, remembering their experience as kids.”

Toys R Us is tapping further into the adult demographic through partnerships with entertainment franchises like Golden Girls, among others, and is hoping to connect with both adults and children via an upcoming movie and in-store events. As to the latter, Miller touted special play days that include local DJs, parades leading up to the storefront and a theme surrounding some form of play, like a Hasbro-run game day or a make-believe day.

“It's bringing that experience to the stores, to the actual physical retail today — and that's the distinguisher between just going on Amazon and typing something in and actually really trying to feel the magic,” Miller said.

Coach

Appealing to U.S. Gen Zers has required a feat of repositioning at Coach, which just three years ago was being perceived as “their mother’s brand,” according to Giovanni Zaccariello, senior vice president of global visual experience. That perception led Coach to lean into “expressive luxury,” a strategy focused on meeting Gen Z shoppers differently.

“Now, they actually think we are their brand after a few years of transformation,” Zaccariello said.

Coach has experimented with its store experience to better align with what Gen Z is looking for, which includes more experiential retail and deeper connections with the brands they shop. One example of that, a concept called Coach Play, which has 12 different locations, is localized to the city it operates in and created based on interviews with store managers and other efforts to understand the local consumer. Zaccariello stressed that trusting regional teams is crucial to the success of these locations.

“Each of them are incredibly bespoke, which means more work, also incredibly local. We don't only speak to the city, but we speak to the neighborhood. Those locations are laboratories for Coach and what we learn in those 12 locations we then roll out around the world,”  Zaccariello said. “So, for example, the first Coach coffee shop actually was introduced in our Coach Play location in Singapore three years ago. Now, we have a rollout plan so you can see how the laboratory and testing and learning kind of works.”

Product customization is also big at these locations, with shoppers able to make cosmetic changes to their Tabby handbags that are removable — a selling point for young shoppers in particular.

“It's not a permanent customization,” Zaccariello said, saying much can be done with charms, handbag straps and stickers. “You want to buy that beautiful Tabby bag and you want to wear it in the evening, at night, for the weekend — so you don't want to put something on top of it and then you cannot wear it anymore, right? Because for a Gen Z, that might be the only bag they can afford.”

Even the layout of these locations is tailored to Gen Z’s preferences — and Coach considers it a win even if Gen Z shoppers aren’t buying anything. Zaccariello noted that one key performance indicator is simply how many Gen Z shoppers are crossing a store’s lease line, and another is how much time they spend there, whether that leads to a purchase or not.

“We will not start a brief without KPIs. So I will personally not design anything unless I know, what does success look like?” Zaccariello said. “Is this for brand building? Is this for traffic driving? Like, how do we know if this is successful?”

American Girl

American Girl is proof that a toy retailer can sell much more than just a doll, while still undeniably being a doll company. The ’80s-era retailer, which opened its first store in 1998, does nail painting, ear piercing and hair styling for children and their chosen doll, and allows them to have tea or lunch with their 18-inch friends at in-store cafes.

In fact, the salon and cafe experiences are so popular that shoppers “have to reserve well in advance” and often call in to say they couldn’t get a spot at a certain time, Jamie Cygielman, general manager and president of American Girl at toy manufacturer Mattel, said. While technology might be present to assist with the experience, like choosing a hairstyle from an iPad or exploring YouTube content throughout the store, American Girl’s selling points are very much in the physical world.

“It was designed to create a place to celebrate girlhood,” Cygielman said of the retailer’s first store in Chicago.

Now, a generation later, Gen Z and millennials still come back to the stores to bask in nostalgia or guide their own kids through the experience, according to Cygielman. 

“We see a lot of original Samantha dolls in the store,” Cygielman said, referencing one of American Girl’s first dolls. “It's the one item that everybody saves and passes down to the next generation or holds for themselves. And so it's really important to make sure that we are still leaning into the legacy — what made this brand so special, the storytelling, the original heroines that were based on different moments in American history. But then also to speak to the child, we've got to bring forward new stories and technology and new ways of giving that storytelling.” 

That means evolving from American Girl print books to also offer a YouTube series, gaming options and more storytelling geared toward a digital generation. There’s also now a build-your-own-doll program on American Girl’s website that allows for 1,000 different permutations. Originally, the option was offered in stores as well, but shoppers were avoiding it because they wanted the benefit of walking out with their doll that day.

The solution for stores, developed later, is called “style guide” and lets kids choose a doll from a whole wall of different options and customize the doll’s clothes, accessories and other things from there. They can choose a pet for the doll, write a background up for the doll and take a selfie at the end of the experience with their new purchase.

It wasn’t until nearly five years after it launched that Rare Beauty, the beauty and cosmetics line founded by Selena Gomez, ran a major ad campaign. When the effort debuted in fall 2024, the celebrity-led upstart was by then estimated to be worth billions and already in vogue with a choosy Gen Z audience that has reshaped category trends thanks to apps like TikTok. 

Rare Beauty’s rise is a case study in how many of today’s buzziest brands are built: Influencer-first and reliant on fervent online followings to spread word-of-mouth rather than the pillars of traditional paid media. E.l.f. Cosmetics, a top brand in the vertical, had a similar path to success, with an early focus on microinfluencers to entrench a dedicated audience. 

At South By Southwest last weekend, Rare Beauty Chief Marketing Officer Katie Welch compared her community-oriented marketing approach to developing a lasting friendship that needs constant care and two-way communication. Trust and transparency are necessary to ensure that such relationships don’t sour in an always-on digital age and as businesses enact changes like price increases, according to the executive.

“The best ideas are going to come from your audience. Ask, listen, shape your brand around those real needs,” said Welch, a cosmetics veteran who got in on the ground floor of Rare Beauty in 2019. “The second idea: you have to show up consistently. Community is not a one-off campaign. It is a long-term commitment.”

Rare Beauty in 2024 ranked as the second most-popular beauty brand among teens, according to Piper Sandler, landing behind E.l.f. and ahead of legacy brands like Maybelline. 

Navigating tumult

Rare Beauty, which positions itself around mental health causes, had a rollout that could easily have been hamstrung. Before it even had a product to sell, the brand was ramping up outreach to a diverse group of people who could accurately represent dozens of shades of foundation. Then, the COVID-19 pandemic hit, throwing marketing strategies and the world at large into tumult.

Rather than pump the brakes, Rare Beauty kept up communication with its followers, hosting weekly Zoom calls, dubbed Rare Chats, that have become a signature piece of company lore. A concrete brand purpose helped Rare Beauty navigate the storm of the global health crisis, Welch explained. 

“All of a sudden, our mission became more important than ever. We knew that we had to connect people,” she said. 

Providing mental health support and addressing the loneliness epidemic among young people has been a mission since the brand’s inception. Gomez, a former child TV star, has been subject to public scrutiny over her looks for decades, and wanted to create a platform to encourage self-acceptance and confidence.

As with community management, Welch cautioned that purpose needs to be ingrained in a brand’s ethos versus an auxiliary marketing tactic. Rare Beauty’s commitment to social issues and inclusivity could be an important differentiator as other brands retreat from diversity, equity and inclusion due to political pressure.

“Brand purpose is not just a marketing play. If you’re going to do it, you have to commit,” said Welch. “It’s not just to generate sales or buzz. Honestly, Gen Z — your audience — will start to see through that.”

Community in focus

Rare Chats led the brand to realize that many young consumers were not getting sufficient mental health resources from school or at home. Rare Beauty eventually established a Rare Beauty Mental Health Council drawing on expertise from across mental health, nonprofit and medical fields that is now five years running, along with introducing a fund that supports 30 nonprofit organizations with grants and contributions. 

In the meantime, moments of consumer connection have made the jump to the real world. Rare Beauty hosts regular summits on mental health while Rare Chats have transitioned to in-person meetups like hikes, breathwork sessions and Sephora shopping trips. Such activations aren’t as measurable as conventional marketing tactics but keep a finger on the pulse of the Rare Beauty fanbase.  

“There’s no real KPI. It’s just, what’s the sentiment?” said Welch in response to an audience question. “Does it seem like people want to be there? Is it fun?” 

Rare Beauty handles almost all of its social and creative in-house but turned to Fred & Farid Los Angeles for “Every Side of You,” its first global brand campaign and a piece of a larger “Love Your Rare” messaging platform. The effort, which debuted in October 2024, shines a light on the range of people in Rare Beauty’s community, with voiceover provided by Gomez. Media spans social, out-of-home, Sephora retail touchpoints, connected TV, influencer marketing and paid digital.

Rare Beauty has made other plays at the big leagues: The direct-to-consumer brand mulled a sale for up to $2 billion in 2024 before putting that process on hold, Axios reported in September that year. Whether Rare Beauty could preserve its deep-rooted community orientation under a larger cosmetics group is an open question. Welch sounded confident that the business has successfully fostered long-term loyalty and pushed other brands to pursue a similar route to growing consumer favor. 

“True loyalty will come from the experiences where people feel valued just beyond a purchase. I really believe any brand can do this,” said Welch. “I can argue not every brand has to have a brand purpose but I do think every brand should have a community. That’s why you exist.”

Ugg dethroned Lululemon as a top fashion brand for upper income teen women, according to Piper Sandler’s 49th semi-annual Taking Stock with Teens survey that polled 6,455 teens nationwide. Until now, Lululemon held the top spot among brand favorites since spring 2018.

E.l.f. Cosmetics remains the No. 1 beauty brand for teens, followed by Rare Beauty and Maybelline. Sephora remains the top beauty destination, ahead of Ulta and Bath & Body Works. Bath & Body Works ranked in the top 10 for the first time since 2018.

Nike is still the top clothing brand for upper income teens, across clothing and footwear. Amazon remains the top shopping website, as shown in fall 2024’s survey.

Teens are continuing to increase their spending, which was up 6% year over year to $2,388, the survey found. Beauty spending was up, too, and reached its highest level during the spring 2025 survey at $374. 

Younger generations prefer to shop for beauty in-person and shopping in stores leads to more spending, research from Adyen found.

After Nike, teens also prefer Hollister then American Eagle as clothing brands. For footwear, almost half of all teens chose Nike as their favorite brand, followed by Adidas and Ugg. Nike remained the top brand, even as its footwear sales have plunged.

For social media, almost half of all teens choose TikTok as their top platform. A recent Fiver report found that half of U.S. Gen Z customers shopped from TikTok’s e-commerce segment for the recent holiday season. Instagram and Snapchat rounded out the top three for favorite teen apps, according to Piper Sandler.

Gen Z is still showing a preference for shopping in person despite its digital upbringing, research from payments platform Adyen shows. The company surveyed over 2,000 U.S. consumers across generations.

Almost three-quarters of Gen Z shop in-person at least once a week and the majority consider it an experience, according to Adyen. By comparison, just over one-third of baby boomers consider in-person shopping an experience. Shoppers across all generations report spending more in-store compared to online, the survey found.

Gen Z wants to make the most of its physical shopping experience as lines between online and in-store shopping blur. Adyen's research found Gen Z favors physical stores for their in-store discounts, the ability to own items faster and location convenience. They also see in-person shopping as a source of enjoyment. 

“Gen Z demands shopping experiences that reflect their digital-first mindset — effortless, flexible, and deeply integrated into their daily routines,” Davi Strazza, Adyen’s North America president, said in a statement. “Retailers that align with these expectations will define the next era of commerce.”

To fully enjoy in-person shopping, Gen Z has a standard for their experience. When in stores, 3 in 5 Gen Z respondents will abandon a purchase if the checkout line is long. If their preferred payment method isn’t available, the survey found more than one-quarter of respondents will leave their items behind.

Adyen found that Gen Z prefers to make beauty and luxury purchases in person. By category, 31% of Gen Z prefers to buy beauty in person. For luxury goods, four times as many Gen Z shoppers prefer to make these purchases in-store compared to baby boomers.

Some beauty retailers are finding success with customers by readjusting their focus to shopper experience and loyalty. Ulta Beauty — a beauty retailer consistently favored by young folk, per Piper Sandler’s Taking Stock with Teens survey — is well aware of this connection.

At the National Retail Federation’s Big Show in early 2025, Ulta said its loyalty program is key to the customer experience. Josh Friedman, vice president of digital products at Ulta Beauty, said that 95% of its sales go through the program. 

In efforts to produce a more personalized experience, the beauty company explained its plans of collecting loyalty program data to enhance long-term relationships with the customer. This can include information on how shoppers use products in their daily routines and recommending commonly repurchased items specific to the consumer.

Shoppers in the U.S. under 60 spent an average $708 on TikTok Shop in 2024, according to a February consumer survey by PartnerCentric. These shoppers are spending an average $59 per TikTok Shop purchase.

Across categories, the most popular TikTok Shop purchase for survey respondents is personal accessories, followed closely by household items. 

Gen Z has embraced TikTok the most among generations, followed by millennials, then Gen X, according to PartnerCentric, a finding that other data frequently shows.

Most consumers already use TikTok for entertainment and almost all of those PartnerCentric surveyed, 9 in 10, report using TikTok, with over half using it daily. But TikTok has now become a shopping destination, too.

For many shoppers, the purchases are not well thought out and TikTok Shop still comes with its pain points, according to the survey. 

Nearly one-quarter of shoppers in the survey reported making an impulse purchase on TikTok Shop. Almost one-quarter of respondents say they regret at least one TikTok Shop purchase. The top regret amongst these shoppers was that the item was of cheaper quality. 

However, more shoppers are trusting influencers with their money when it comes to deciding their purchases. Survey respondents report they would spend an average $95 on items recommended by their most-trusted influencer.

Influencers have a vast reach as nearly two-thirds of U.S. shoppers under 60 take purchase suggestions from influencers. These shoppers report that nearly half of their TikTok Shop purchases came from influencer posts.

Brands like E.l.f. Cosmetics have leveraged TikTok Shop’s Super Brand Day sales events. For one day, a brand is featured on TikTok Shop, typically with sales and freebies. The beauty brand capitalized on a mini version of its Power Grip Primer, which garnered attention from the social platform, as a free item for purchases over $15.

TikTok Shop as a business has grown significantly. During the most recent Black Friday, TikTok Shop sales surpassed $100 million, triple the amount spent during the previous year.

The fate of TikTok remains undecided, as the law enacting a ban of the platform was delayed. Consumers still frequent TikTok Shop despite its ever-changing status. Factoring in the app’s ban period, the customer experience for users has varied. Though the ban was delayed, since January, over 2 in 5 shoppers say the app has changed, PartnerCentric found.