Gen-Z and the digital revolution: Fueling the next phase of retail growth

India’s retail landscape is undergoing a massive transformation and at the heart of this shift is a generational force redefining how commerce is experienced, how value is perceived, and how brands evolve. Gen Z: a tech-native, purpose-driven, and influence-heavy bunch rapidly emerging as the country’s most consequential consumer segment.

Having grown up in a hyper-connected world dominated by smartphones and social platforms, Gen Z demands more than products - they seek personalisation, cultural alignment, and authenticity. They expect seamless transitions between digital and physical touchpoints and reward brands that talks about values, sparks their curiosity, and empowers them to make informed decisions. For Indian and global retailers, this is a generational wake-up call to move beyond conventional formats and reimagine retail as dynamic, immersive, and socially glued.

Redefining the Path to Purchase

Gone are the days when customers journeyed from awareness to purchase in a linear fashion. Gen Z shoppers now discover brands through creators on social media platforms, and trusted peer opinions rather than traditional ads. Influence is no longer top-down; it’s community-driven and experience-led.

According to a study published by KPMG¹, a majority of Gen Z rank social commerce (63 percent) and livestreaming (57 percent) as important to their shopping experience.

Retailers must now create frictionless, omnichannel, and hyper-personalised journeys that meet consumers where they are - whether that’s on messaging applications, social media, or in a VR-powered digital storefront.

The Digital Mandate: A Retail Reboot

For Gen Z, digital isn’t an enabler- it’s their default mode. From voice-assisted searches to AR-powered try-ons and gamified shopping, this generation thrives in tech-integrated environments.

Forward-thinking Indian retailers are leading the charge by adopting:

AI-led personalisation

To surface the right product at the right time

Augmented & Virtual Reality

Trials to digitise the in-store experience

Conversational commerce

Via messaging platforms, live chats, and chatbots

Predictive analytics

That anticipate demand and optimise assortments

This isn't just transformation - it’s reinvention. Retailers who embed these technologies at their core will not only deliver operational efficiency but also remain relevant.

Values, Not Just Value – From Price to Purpose

This generation demands more than deals, they want to be more purpose led. Gen Z scrutinizes supply chains, demands transparency, and aligns with brands that values environmental and ethical consciousness. Therefore, any brand which shares the ethos of a product coming to life and linking it back to the way the sourcing happens thrives better.

In India, this is catalyzing the rise of conscious retail:

Sustainable packaging and local sourcing

Inclusive product lines and diverse brand storytelling

Clear stances on social issues and ethical treatment of workers

For retailers, it's no longer about offering the cheapest option - it’s about offering what matters most. A KPMG report¹ even shows millennials and Gen Z are most willing to pay a premium for sustainable products.

From Consumers to Co-Creators

Gen Z doesn’t just consume – they curate, critique, and co-create. They’re turning unboxings into viral trends, offering instant feedback, and often shaping product development in real time.

Retailers that invite participation through limited-edition drops, interactive loyalty programs, and crowdsourced design ideas are not only enhancing engagement but building brand equity with this expressive generation. Gen Z’s approach is simple: don’t sell to us - build with us, for us.

Digital-First Brands: Winning Gen Z’s Trust, Then Their Wallet

Unlike previous generations who often discovered products in-store and then checked online reviews, Gen Z operates in reverse – discovering, validating, and connecting with brands in digital spaces before ever considering a physical purchase.

This shift has paved the way for Digital-Native and D2C brands to gain rapid traction in India. These brands often start online, telling compelling stories, cultivating niche communities, and leveraging influencers to build trust. Gen Z’s preference for authentic storytelling, peer reviews, and transparency aligns perfectly with these digital-first models.

What’s notable is that:

Many Gen Z shoppers don’t need to ‘see it to believe it’; they trust what their digital tribe endorses.

Brands that launch on social media platforms, build community on Discord, or showcase behind-the-scenes on social media platforms are often more relatable than legacy retail players.

D2C trailblazers in India across beauty, fashion, wellness, and lifestyle are blurring lines between content and commerce, making shopping an experience - not just a transaction.

Even when physical touchpoints are involved, they often serve as brand immersion spaces or experience centres. For Indian retailers and legacy brands, the takeaway is clear – digital trust precedes physical presence.

What’s Next: Agility, Authenticity, and Alignment

As India’s market continues to diversify, Gen Z’s imprint will only grow bolder. However, engaging them isn’t a one-time campaign - it’s a continuous conversation rooted in agility, data-driven decision-making, and emotional resonance. The same is supported by a KPMG report¹, which highlights that Gen Z remains at the forefront of shaping the future growth and trajectory of the retail industry. For brands that embrace flexibility, embed purpose, and champion innovation, the future isn’t just promising - it’s already here.

A version of this article was published in The Financial Express Retail.com on July 02 2025. The same can be read here