‘Retailers who miss the shift in customer interactions are likely to face an existential risk’

Consumers are increasingly fed up with traditional commerce. Newer generations are redefining the ways they want to interact with brands and shaping the future of retail spending with new priorities, expectations and influences.

Retailers who miss this shift are likely to face an existential risk – their customers moving towards brands that better meet their needs.

Discovery, discovery, discovery

Historically, retailers had ultimate control over a customer’s journey from discovery to purchase. Customers once discovered new products mainly in-store, but today’s landscape looks very different.

Social media and lifestyle applications such as fitness, wellbeing and entertainment are embedded in everyday life. Rather than existing in a silo, ecommerce is now built straight into these platforms, meaning people can find and buy products within the same spaces where they consume content and socialise.

This is already upending the way people shop. In fact, a recent Accenture study found that in 2024, for the first time, Gen Z (born 1997-2009) spent more time on ‘discovery’ through social media, for example consuming shopping-related content, than they did on the high street in traditional bricks-and-mortar stores.

It means that algorithms, personalised recommendations and influencers have immense power over the purchases people are making. Platforms like TikTok are becoming dynamic, consumer-driven marketplaces that give power back to buyers, letting them explore products naturally, rather than through the conventional ‘search and select’ model.

Indeed, shoppers are taking their inspiration and guidance from a much wider range of sources than their preferred retailer. Over 50% of new consumers learn about products through channels such as YouTube and 40% of shoppers won’t buy a product if that product page doesn’t feature peer endorsement or relevant user-generated content.

Lifestyle commerce

Lifestyle commerce, which brings shopping into people’s everyday digital lives, where they already browse, socialise, and consume content, is already here. Our research predicts that spending in lifestyle commerce will quadruple in the next five years, and it’s already being embraced by younger generations.

When done effectively, lifestyle commerce has been shown to increase conversion rates by as much as 10 times compared to traditional methods. Retailers who adopt these strategies can capture a new generation of shoppers who expect these integrated experiences.

This doesn’t mean all retailers have to jump on the latest TikTok trend or churn out memes every day, but it will require investment in technology that allows them to interact with their customers across a range of new formats and platforms in a way that is personal, conversational and predictive. It also means the days of hoping someone walks past your shop and pops in are behind us. Brands must think more holistically about how they present their products and where customers will discover them.

This requires mastery of content, including community and user-generated content, and comprehensive product and customer data to target customers effectively across new digital touchpoints, build trust, and guide them seamlessly through their journey.

Discovery is only one part of the puzzle. To be truly effective, lifestyle commerce will need to feel seamless on both ends, with the technology to back it up. This means investment in inventory tracking, unified logistics, and easy delivery and returns for customers.

Social media moves quickly, but lifestyle commerce isn’t a passing trend - it’s the future of retail, blending shopping seamlessly with the spaces where people are already connecting and spending their time.

Lifestyle commerce is set to represent a quarter of all online purchases by 2029. Younger generations, including Gen Alpha (born since 2010) are already discovering brands and products on social media and are projected to have a spending power of $340bn by 2030.

There’s a small window for brands to meet these expectations or risk losing relevance with the next generation. Retailers will need to act quickly, reimagining discovery and making shopping a natural part of the digital experience.