Gen Z is rewriting the rules of holiday shopping. Deloitte projected that Gen Z’s 2025 holiday spending would drop 34% from the previous year, with an emphasis on budgeting and deal-hunting. And while the numbers are still coming in, the mandate for retail leaders is clear: adapt to Gen Z’s evolving preferences or miss out on a powerful consumer base.
There’s no doubt Gen Zers navigated this holiday shopping season with a sharp eye on value. But they were also far from tuned out. Despite a more conservative consumer approach, this generation is the age group most optimistic about their financial outlook heading into the New Year.
Gen Z still showed up this holiday season, just on their own terms. The challenge for retailers is keeping up with the generation’s rapidly evolving expectations, especially in stores – all year round.
For many retailers, AI offers the missing link between this year’s performance and next year’s improvements.
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Lessons from the 2025 Holiday Season
As the 2025 holiday shopping season winds down, most merchandising and promotional strategies are already wrapping up.
While that limits the types of enhancements retailers can make right now, there’s still so much to learn and reflect on during this stretch of time, and ways to apply insights moving forward.
Whether you’re reading this as the holidays end or some time has gone by, think of the 2025 holiday season as your test case and data source, especially when it comes to Gen Z. How did Gen Zers discover products in your stores? How did they engage with your brand? Did they gravitate toward retail experiences that felt curated and intentional, or did they introduce entirely new behaviors that we hadn’t seen before?
The information you gather will shape not only next holiday season’s execution strategy, but your retail operations every day.
As you review and reflect, keep these three Gen Z-driven trends in mind. They likely shaped your stores’ performance this holiday season – good and bad – so analyzing them now can help you start the New Year off right and spotlight the biggest gaps in your current AI capabilities.
Trend 1: Real-Time Shopping Habits
Product discovery among younger shoppers is digital, dynamic and happening in real time. According to Deloitte’s Holiday Retail Survey, 43% of Gen Z used AI tools to help them shop this holiday season, and three-quarters turned to influencers and social media for inspiration.
And while their searches may start online, 81% of Gen Zers still get inspiration from in-store displays. What captures Gen Z’s attention online must translate quickly to physical store experiences and product availability.
What you can do: Reflect on and surface data around the types of purchases Gen Z made in your stores this holiday season. Did their shopping behaviors align with what’s trending on social media? Were younger shoppers consistently looking for the same items in your stores, or frequenting the same departments? Or were they leaving empty handed?
Depending on what you learn, you may realize that your merchandising plans were too static and reactive. A trending product in September may be outdated by December – and when shelves fail to reflect the given moment, retailers lose the chance to convert shopper interest into sales.
When in-store experiences reflect what Gen Z is excited about in real time, stores feel current, culturally fluent and worth engaging with.
In most cases, matching Gen Z’s pace requires AI-powered tools that can track emerging digital trends, align them with local inventory and insights, and dynamically update planograms at the store level. This way, mirroring real-time shopping behaviors happens automatically, without introducing major strains on busy store teams.
Trend 2: Valued-Added In-Store Experiences
Gen Z didn’t base their holiday shopping choices on convenience alone. According to recent research from J.P. Morgan, less than 45% of Gen Z’s in-store purchases happen within 10 miles of their home, compared to over 50% for other generations. Gen Z is comfortable traveling to shop, but only for stores that deliver a worthwhile experience.
What you can do: Use holiday season data to gauge if more Gen Zers were heading into your stores than normal, and what experiences they engaged with most once there.
Successful in-store experiences include clear product presentations, consistent execution and a polished physical retail environment that matches your brand online. However, with lean seasonal teams managing large store networks – holiday hiring in retail stores slowed down this year – even minor lapses like half-stocked displays, outdated signage or mismatched marketing materials could have quickly eroded brand credibility and undermined the promise of in-store excellence.
This is where AI-driven planogramming technology can help. With real-time data capabilities and visibility, retailers can spot execution gaps at individual stores and prioritize high-impact fixes to ensure consistency. By tightening the feedback loop between HQ and store teams, operations become more agile and precision becomes an execution standard, without adding additional manual effort.
The brands that execute with consistency and precision send a clear message to shoppers: your visit matters. For Gen Z, attention to detail will earn repeat visits well beyond the holidays.
Trend 3: Localized Offerings
According to PwC, Gen Z shopped with greater intention this year, favoring gifts and brands that felt personal, thoughtful and aligned with their values.
Broad-brush holiday campaigns fell short on this front. A snow-covered window display might have resonated in Chicago, but likely feels irrelevant in Phoenix. When stores ignore regional shopping preferences, product trends, weather or cultural cues like popular events, they risk losing the emotional relevance Gen Z expects.
What you can do: Take the chance to evaluate the localization of your merchandising. Did your assortments feel attuned to the surrounding environment? Or would the experience have been the exact same at stores found across the state or country?
Today’s competitive retail environment takes more than a national playbook, and technology can get you there. AI-powered localization tools can tailor product assortments, timing, placement and messaging based on store-level data, regional patterns and other contextual nuances. This empowers community-specific execution without sacrificing brand consistency or adding complexity for store teams.
It’s also worth noting that 82% of Gen Z planned to purchase product “dupes” this holiday season. Did your store experience at the shelf level support this behavior? Do you know what product dupes are most popular by location or local brands?
Gen Z is uncovering products in new ways and gravitating toward retail experiences that feel purposeful and aligned with how they move through the world. Smart, focused curation wins.
A Blueprint for Year-Round Retail Relevance
This holiday season, every purchase, hesitation or skipped visit offered insight into what Gen Z wants, and how retail strategies must adapt.
Let this season be your proving ground to identify gaps in your merchandising strategy, outline AI-driven adjustments to execution and determine which tech investments will help you align in-store experiences with Gen Z expectations. The insights you gather will lay the foundation for smarter, more relevant planning moving forward.
Gen Z rewards brands that show up with intention, and that’s a principle they hold year-round, not just in November and December.
Sam Vise is the CEO of Optimum Retailing, a retail merchandising and intelligence platform used by some of world’s biggest retailers to plan, execute and analyze their brick-and-mortar locations, leading to higher profitability and better customer experiences in every store.
