Marketing

AI, social media, digital shopping: What retailers need to do to grab Gen Alpha, Gen Z shoppers

Retailers need to offer digital discovery for the online Gen Alpha shopper and in the mall experience for the Gen Z. consumer.

Photo: AlexPhotoStock - stock.adobe.com

October 8, 2026 by Judy Mottl — Editor: RetailCustomerExperience.com & DigitalSignageToday.com, Connect Media

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One of the biggest trends in retail customer experience is product discovery, with strong assistance via AI, being embedded in the growing number of digital shopping channels.

Gen Alpha is leading the charge when it comes to product discovering through AI, social media, gaming and streaming platforms. That's because social digital channels are bringing shopping to the Gen Alpha demographic – TikTok has rolled out an AI shopping assistant and Meta has connected its Muse A agent to retailers including Walmart.

Gen Alpha is the first generation shaped by AI, and, as a Forbes article revealed, retailers not following that generation of consumer to those gaming and streaming platforms will be left in the dust.

How AI is impacting the shopper

AI isn't just helping shoppers search and discover, it's having an influential impact on what they ultimately purchase.

Well over half, 71.3%, of U.S. consumers using AI for search and shopping have tapped an AI helper to find a discount, deal or promotion, according to Snipp research.

The Snipp data also revealed the following:

• 41.6% now start product searches with an AI assistant.
• 83.6% have used AI to discover a product, brand or service they weren't previously aware of.
• 58.1% use AI to compare products.
• 61.8% have already purchased a product based on an AI recommendation.

Another study drives the point home short and sweet: For Gen Alpha, today's window shopping is taking place on a web browser, according to a DKC study, "The Rise of the Gen Alpha Economy."

The mall roars back

Yet, at the same moment, there's been a growing resurgence in physical retail shopping led by Gen Z who are hitting the malls.

In fact, malls are now the top-performing sector in the U.S., according to a Connect CRE report, which found mall values are up 13% over the past year, more than double the increase in overall commercial real estate prices.

The scenario clearly presents retailers, big and small, with a quandary: How to turn digital discovery into in-person engagement.

The answer, according to Stephen Glancey, digital practice leader at Diversified, lies in the "attention-based economy." Diversified is a provider of audiovisual, broadcast and digital experience integration.

With younger consumers exploring online, discovering new brands, retailers need to be rethinking the physical space to offer the same sense of immersion, personalization and interactivity that shoppers now expect from the digital shopping channels.

RetailCustomerExperience.com reached out via an email interview to get deeper perspective from Glancey, a tenured business development leader with over 15 years of experience driving growth, innovation, and strategic partnerships in the digital experience industry.

He has worked with global brands such as Marriott, PepsiCo, Mercedes-Benz and Lululemon, leveraging technology and creativity to deliver impactful digital experiences. In his role as team leader for all digital experience business development at Diversified, his expertise spans digital marketing, enterprise account management and brand strategy, with a strong focus on data-driven solutions and customer engagement.

Q. What is the status of digital discovery in retail today, particularly among Gen Alpha and Gen Z consumers?

Glancey: Discovery is finished before the shopper reaches the store. For Gen Z, social is the front door. Forty-one percent of them go to social first when they search, ahead of search engines at 32%, per Sprout Social's 2025 survey. Salesforce found 76% have discovered a product on social and 39% have bought there. TikTok Shop did $15.1 billion in U.S. sales last year, up 68%.

AI is the second front door, and it's opening faster than most retailers have planned for. Generative AI sent 4,700% more traffic to U.S. retail sites in July 2025 than a year earlier, per Adobe, and the conversion gap between those visitors and everyone else narrowed from 49% to 23% in seven months. Salesforce found AI and AI agents drove $262 billion of holiday revenue, a fifth of global online sales for the season. Amazon says 300 million customers used Rufus in 2025 and those shoppers are 60% more likely to complete a purchase. Fifty-nine percent of U.S. teens have used ChatGPT, per Pew.

Gen Alpha is a different animal. They discover inside games and streams, then hand the decision to a parent. More than 75% of them game regularly, per GWI. Roblox had 97.8 million daily users in early 2025. Morning Consult found that 73% of Gen Alpha parents say the kid influences what goes in the grocery cart, and Teneo puts their influence at $255 billion in U.S. spending. Foot Locker's Kim Waldmann puts it plainly: by the time a kid walks into the mall with his parents, he already knows the products and the brands.

Retailers are budgeting against the reach numbers and ignoring the trust numbers. Only 25% of 15-year-olds trust online ads and 23% trust influencers, per Teneo. Adobe found 65% of Gen Z have searched on TikTok and only 25% call it effective. Both generations are discovering more and believing less, and the place they go to settle it is the aisle, standing in front of the product with the phone still in one hand.

Q. What is driving the move to turn digital discovery into in-person engagement, and why is it important for retailers to jump on this trend?

Glancey: Two things are driving it, and they point in the same direction. The first is that Gen Z is already in the building. Placer.ai had indoor mall traffic up 2.2% year over year in April, and 57% of 18-to-34-year-olds say they visit malls frequently. Simon Property Group's juniors category has posted 16 straight months of positive comps, and Simon's retailer sales per square foot are up 13.9% to $838. Macerich's CEO told analysts in August that Gen Z over-indexes on physical stores and is on track to become the largest spending demographic in the country. Retailers aren't manufacturing this traffic. They're deciding whether to do anything with it.

The second is ownership. Every discovery channel in my first answer is rented. TikTok, Roblox, ChatGPT, Rufus: the platform owns the shopper relationship and the data, and the retailer pays for access. The store is the one channel a retailer owns outright, and it still carries roughly 84% of U.S. retail sales. Bain found consumers trust a retailer's own AI agent three times more than a third-party one, and the same logic holds on the floor. If the retailer doesn't close the loop between what the shopper saw in the feed and what they see at the shelf, the shopper closes it with their phone, and the retailer becomes a fulfillment node for somebody else's discovery engine.

Why it matters comes down to the four levers I run every program against: revenue, profit, risk, and time.

On revenue, a Journal of Marketing study covering 30 million shopper journeys and 237 campaigns found in-store digital signage lifted purchase probability by 8.1%, with advertising elasticity about 50% above traditional brand advertising. Those were incremental sales at the shelf.

On profit, in-store retail media is under 1% of U.S. retail media spend while stores carry 84% of sales, and one in four media buyers say they can't get in-store reach. That gap is the offset, and it's how the brands that want the shopper end up paying for the screens that reach them.

On risk and time, agentic commerce is arriving faster than store estates are modernizing, and Gen Alpha is walking in with preferences already formed. A retailer running a dated in-store digital layer in 2027 is competing with an AI agent that already knows what the shopper wants and never has a dark screen, and the window to change a preference at the shelf closes before checkout.

The reframe I push with every executive team is the same one: the store's digital layer is infrastructure, not AV. It's the system of record for the in-store experience, on par with point-of-sale and the network. Fund it like a facilities line and it gets fixed when it breaks. Fund it like infrastructure and it gets refreshed on a planned cycle with a P&L owner attached.

Q. Given Gen Z's return to the mall shopping experience, does that reflect a desire to touch products before buying, a desire for instant gratification and bringing home a product the same day, or something else?

Glancey: All three, and the ranking matters. Touch and try is the biggest stated reason. PwC found 61% of Gen Z prefer discovering new products in a physical store, and the top reason they give is seeing and touching the product.

A Harris Poll this spring had 86% of 18-to-44-year-olds calling physical interaction essential to a purchase decision. There's an economic reason underneath the stated one. Capital One Shopping's research puts Gen Z at 7.7 returns a year, the most of any generation. Trying it on in the store is their fix for a return habit that costs them time and costs the retailer margin.

Instant gratification is table stakes. Gen Z uses buy-online-pick-up-in-store at about the same rate as millennials, and YouGov has 29% of them discovering online and buying in store. They expect same-day. They don't drive to the mall for it.

The "something else" is the one I'd build a strategy on. Gen Z spends 5.1 hours a day on social, up from 4.5 two years ago, and 81% of them told Harris they wish they could disconnect from screens more easily. The mall is where they go to do that together.

Placer.ai has 37.6% of indoor mall visits running past 75 minutes, and that share is climbing. Seventy-one percent of Gen Z say their favorite gift discoveries came from something they stumbled on in a store. American Eagle added 790,000 new customers in six weeks off its 2025 denim campaign, then spent this back-to-school season putting styling and customization events into Simon malls to turn that audience into foot traffic. Dick's House of Sport formats pull five to six times the visits of a standard store.

So Gen Z is coming to the mall for the time, and the transaction follows. That changes the KPI: the store's job is to earn the next 30 minutes, and every screen in it either helps earn those minutes or it's noise on the wall.

Q. What practical steps should retailers take to serve both generations?

Glancey: Here's the play, in the order I'd run it.

1. Put the store's digital layer under a P&L owner. The chief customer officer owns the experience, the CFO owns the funding model and IT owns uptime. Until that happens, every screen is a project with an end date instead of a program with a budget line.

2. Close the loop at the shelf. The shopper watched a creator use the product on TikTok last night. Sephora's Celessa Baker said it outright: shoppers come in to touch and feel, and they're on their phones the whole time looking at product. Put that creator clip and the reviews on the screen next to the product so they don't have to look down. That takes a content operation that can move one asset from social to 2,000 stores by Friday with the local price attached.

3. Design for dwell. Customization stations and hands-on demos give the shopper a reason to stay, and Dick's House of Sport gives whole departments to it, with climbing walls, batting cages, and a running track. For Gen Alpha, MG2 found more than half will walk out of a store that has nothing interactive to try, so the interaction has to be something a ten-year-old can run without an associate.

4. Build three store archetypes. A bespoke flagship experience doesn't scale to a 3,000-square-foot mall box, and it shouldn't. Define a flagship tier, a repeatable mid tier, and a lean small-format tier that all run on the same platform and the same content. That's how a smaller store with less foot traffic still participates in the global digital strategy without the flagship budget.

5. Fund it with retail media. In-store is under 1% of U.S. retail media spend and stores are 84% of sales. CVS is building toward roughly 11,000 screens and reports 54% of shoppers find them useful and 20% take action. Brands want that reach and can't get it. Sell it to them and use the revenue to offset the infrastructure cost. That's the unlock: the screens pay for themselves when the media plan is built into the program on day one instead of bolted on in year three.

6. Measure the store like a channel. Track dwell, attention at the shelf, conversion on promoted items, return rate, and uptime. Privacy-safe on-device analytics handle the first two without storing a face. Uptime is the one retailers forget. A dark screen is a dark shelf, and in a 2,000-store program a 2% failure rate is 40 stores with no experience today.

One note on serving both generations in the same store. Gen Z shops alone and trusts the creator. Gen Alpha shops with a parent and, per Teneo, trusts parents and friends over influencers by a wide margin.

That's one aisle with two decision-makers and two different trust signals. The screen in the kids' section has to speak to both, and the associate has to know which one is deciding.

About Judy Mottl

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Judy Mottl is the editor of RetailCustomerExperience.com and DigitalSignageToday.com at Connect Media. She is an award-winning editor, reporter and blogger who has worked for top media for nearly four decades,  including AOL, InformationWeek and Internet News, as well as for leading technology providers including HP. She’s written everything from breaking news to in-depth industry trends and reported on technology long before the internet arrived, including the debut of the first smartphone. When she's not sharing insights on digital signage deployments and trends in retail customer experience she's on the beach or watching the latest live murder trial.

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