Shades of Z: Decoding the next generation of consumers
5 minute read
The shades of Gen Z imperative: why one-size-fits-all retail strategies are failing
We surveyed 1,500 UK Gen Z consumers to decode how spend, digital behaviour and sustainability expectations are evolving
Gen Z will define the next decade of retail, but they are far from a single, predictable audience. Their behaviours can look contradictory: saving while splurging, digital-first yet store-reliant, and vocal on sustainability while remaining pragmatic in practice. This report challenges the stereotype-driven narrative by mapping four distinct cohorts and three behavioural themes, giving retail leaders a clearer route to win trust, relevance and lifetime value.
What we did
Retail Economics, in partnership with RSM, undertook consumer research in August 2025, surveying 1,500 UK Gen Z consumers aged 18–28. We used the findings to identify four distinct cohorts that bring Gen Z’s diversity into focus, and structured the analysis around three themes: shades of spend, shades of digital, and shades of green. Economic modelling and industry forecasts are based on proprietary Retail Economics data.
What you can learn from this report
• How to segment Gen Z beyond stereotypes using four distinct cohorts, and what each cohort needs from value, experience and convenience
• How Gen Z’s spend priorities are shifting by life stage, and how to align pricing, loyalty and proposition design to match their intent
• How discovery is changing from search-led journeys to social and mobile-first pathways, and what this means for conversion and attribution
• How to design seamless online-offline journeys that remove friction across browsing, buying, fulfilment and returns
• How to build credible sustainability and circular strategies that work in practice, not just in brand messaging
• What capabilities retail leaders should prioritise now, including personalisation, unified commerce foundations and social commerce execution
10 key insights
• Gen Z are set to drive over £26bn of retail spend in 2025, rising to almost £40bn by 2035, increasing their share of discretionary retail spend (Fig 1)
• Four cohorts sit beneath the Gen Z label, reinforcing why a single proposition, channel strategy or loyalty mechanic will underperform at scale (Fig 2)
• Gen Z are not reckless: when asked how they would use a £1,000 windfall, the biggest share would put it into savings or investments, signalling a strong planning mindset (Fig 4)
• Loyalty is conditional: only 28% consider themselves loyal to a small set of brands, underlining the need to continually re-earn relevance through experience, innovation and value
• Gen Z blend online and offline as standard, but are less likely than Millennials to shop purely online, with more identifying as store-first shoppers (Fig 6)
• Mobile is the gateway: 68% of Gen Z prefer shopping online via smartphone (vs. 51% of the typical UK consumer), shaping how discovery, conversion and loyalty must be designed (Fig 7)
• Social discovery is strongest for younger Gen Z: social overtakes search for 18–21s, changing the path from scrolling to store visits, purchase and post-purchase usage (Fig 8)
• The intent-action gap is real: 59% admit Gen Z talks more about sustainability than they practice, while 40% confess to buying items they will only wear or use once (Fig 9)
• Circularity is becoming mainstream behaviour: one in three (34%) Gen Z regularly shop pre-loved as an alternative to buying new (Fig 11)
• Ownership is increasingly fluid: almost half (47%) have re-sold an item within months of purchase, showing resale is now built into the purchase calculation for many consumers
