How Gen Z is influencing shop fit-outs and the future of retail

Gen Z are simultaneously praised and shamed for their shopping habits. They are credited, and criticised, for everything from demanding heightened convenience, wanting more personalised experiences and for their shopping habits being more informed by sustainability and concern for the environment.

Some retailers might say they are more demanding than any previous generation.

However, with Gen Z’s global spending power forecast to hit $12trn (£8.8trn) by 2030, as reported by World Data Lab, it’s a demographic that retailers can no longer ignore. As a result, it’s becoming increasingly vital for retailers to understand what Gen Z consumers want, and adapt their offerings to tap into the trends driving this increasingly powerful spending cohort. 

While many are prioritising price and product to remain competitive in today’s market, the future is actually all about stores – something Savills cross border retail director Alexander Glavas says has become the new market standard.

“Retailers and brands are all creating environments with a view of this new consumer coming in because that’s where the money is,” he says.

“When I speak to new brands that ask me about store design, I ask them how they want potential customers to feel when they leave the store. You have so many people doing the same thing with a slight difference in the product itself, but that feeling from the store is what’s going to bring them back.”

So as stores transition into experiential destinations helped by technology, seamless checkout, in-store sustainability initiatives and personalised curated spaces, Retail Week explores this new so-called ‘market standard’ retailers need to live up to in order to win Gen Z spend moving forward.

Experience is king

With Gen Z anticipated to account for around 39% of retail spending in the UK by 2030, according to Barclays data, the purchasing power of Gen Z is growing rapidly both at home and abroad.

Generically, Gen Z are digital natives who are driven by trends but see the value in authenticity, transparency and sustainability, so having them on side is not only becoming increasingly important but also more difficult too as building brand loyalty is tougher than ever.

And with fashion and sportswear brands battling in an ever-competitive space, retailers are rethinking and redesigning their shopping experiences to meet expectations in a bid to keep Gen Z coming back. As a result, thinking about a store space in 2025 goes far beyond the product on the shelves, says Glavas.

“I think part of the change to stores and the shopping experience is thanks to the pandemic but also just changing consumer behaviours – fashion retail particularly is a tactile business. People want to touch and feel product and people are realising that the environment to do that has to be great.”

Off the back of its largest global opening in early June, a JD Sports spokesperson said that stores in today’s market are the “beating heart” of the shopping experience.

“From product exclusivity to store formats, every decision is made with them in mind,” they said. “Most journeys start online, so by the time Gen Z step through our doors, they already know what’s trending, what’s dropping and what they want. That makes the store visit more intentional – it’s not just about shopping, it’s a social moment to meet up, hang out and discover the brands they love.

“In a world where next-day delivery is standard, in-store availability is non-negotiable. Being able to touch, try on and share delivers a gratification online shopping can’t match.”

So unlike the generation prior, the shopping experience and return to stores has gone full circle for Gen Z. Customers from this up and coming generation are seeking not only trendy products at great value but also a great experience to purchase products in, and a community to feel a part of.

Winners vs losers

With an eye to recent store refits, brands under Spanish fashion giant Inditex’s umbrella includng Zara, sportswear specialist JD Sports, New Balance, H&M, Abercrombie & Fitch and Lululemon, to name a few, have all raised the bar and upped their in-store game.

A common theme across some of the recent refits is the creation of an experiential space, such as that within Abercrombie and Fitch’s new Oxford Street store. Abercrombie introduced a personal fitting room into its new store, providing a “light, bright and inviting experience space” for shoppers to offer a more bespoke shopping experience.

Dedicated self-checkout stations are also becoming a more mainstream feature, alongside mobile payment options in a bid to battle long queues and avoid losing customers before they reach the checkout.

Earlier this year New Balance unveiled its redesigned flagship on Oxford Street which is built around the concept of “putting people, not products, at the centre”, housing curated collections, a central seating area, space to host events and putting an emphasis on visual storytelling – a key theme in engaging the younger consumer and inspiring them throughout the shopping journey.

New Balance is one of the retailers starting to place more emphasis on visual storytelling and showing Gen Z customers where products came from and how they were made, leaning into sharing more about the design and craftmanship behind its products.

Those winning in this space will also be tuned into the power of social media and the value in creating a commmunity.

“Stores need to move at the pace of social feeds – always on, always relevant,” said JD’s spokesperson, demonstrating that retailers need to foster an environment likened to the depth of choice, engagement and immediacy social media provides.

Lululemon is just one of those leading in the sports space, with a dedicated staff member on hand to greet you as you enter as well as a weekly run club at its Regent Street store, inclusive to all levels of runners.

“Gen Z want to feel product and feel a sense of community – it’s a different world of retail now,” Glavas says.

“I don’t think Gen Z are sensitive to prices but rather to brand belonging,” he adds. “If you are a brand, you are spending most of your money on store design, customer journey and look and feel, because if you don’t get that right, you might as well throw your product away. That’s the reality.”

So with a highly-anticipated reopening of Nike at Oxford Circus on the horizon as well as a raft of other refits and openings still to come this year, Gen Z’s influence on stores is only inevitably going to become more prominent.