From Gen Z to Gen Alpha, How Retail Is Positioning Itself for Tomorrow's Customer

As millennials reach middle age and many baby boomers exit the workforce, the generational torch is being passed — and along with that, so is the shifting nature of each demographic's spending power. This was a topic examined in depth at the 2025 NRF Big Show, where executives from Sephora, Claire's, and perhaps surprisingly, Roblox, teamed up to talk about the business of serving customers belonging to Gen Z and Gen Alpha.

The Importance of Influencers for Retail Brands Catering to Gen Z and Gen Alpha

One central topic discussed by representatives from all three of the aforementioned brands: influencers, and the impact they have on business.

Meghan Hurley, VP of global marketing for Claire’s, gestured toward the brand's successful The Collab campaign, one which invited notable figures from both Gen Z and Gen Alpha to showcase their talents and creativity in front of a large audience.

"So, our big thing is how do we bring them [Gen Z, Gen Alpha] more into our process? We are a 50-year-old retailer, so it’s a big step for us in making sure that we’re kind of handing over the keys of the kingdom to this generation," Hurley said. "This past year, we actually launched a program called 'The Collab' where we brought in some really unique, wonderful [members of] Gen Z and Alpha to be part of our campaign — and really, part of our business, for the whole year."

Brent Mitchell, VP of social media and influencers for Sephora, tackled the topic next. He underlined how proud the company was of the Sephora Squad, a program that has entered its seventh year.

About 16,000 individual applicants tossed their hat into the ring for this year's squad, per Mitchell, with 50 eventually being selected to represent the brand. Ranging from an Olympic gold medalist and high-profile Twitch creators to micro creators with high engagement rates with their audience, Sephora Squad members come from all walks of life.

"Our philosophy is how can we use the power of Sephora and our 22 million Instagram followers to be additive to these creators' careers," Mitchell said.

Trends expert and panel moderator Casey Lewis then pointed the influencer discussion to an adjacent avenue, asking Roblox's head of fashion and retail partnerships, Winnie Burke, about the rise of virtual influencers. For those unaware, a virtual influencer is a fictional, computer-generated character heavily leveraging AI technology to project a persona into a digital space.

“This Gen Z audience is slightly allergic to traditional forms of advertising as we know, so we have to reach them in a very different way, and on Roblox... with almost 90 million daily active users, there’s a lot of inspiration there," Burke said.

One of the Roblox platform's most famous virtual influencers, Kai, has been a runaway success, according to Virtual Humans — and key to the company responsible for Kai, world developer Splash, securing more than $20 million in Series A funding for Splash parent company PopGun. But while Burke didn't speak directly to Kai, she did pivot to discuss influencer impact within the Roblox platform as a whole.

“You're walking through Roblox and you are being inspired by every single person, i.e. avatar, that you see there — all these bespoke looks, all these bespoke hairstyles, outfits, and honestly, creativity and personalization was really the fabric of the platform. And the more expressive you are, the more likely that you're going to have people who are sort of gravitating to you,” Burke added.

Burke also mentioned collaborations with rapper Ice Spice and Team USA Olympians and Paralympians as notable examples of influencer inclusion on the Roblox platform in recent days.

Retailers Must Know Their Audience (and Their Changing Taste Profiles)

Sephora's Mitchell was quick to add his piece to the discussion thread related to a younger generation of customers and what it might take to attract them to the brand. He underscored the importance of environmental and social awareness to younger consumers — indicating that Sephora had relaunched Clean at Sephora so that shoppers could see which products emphasized a planet-friendly nature — and of navigating social media trends, something he felt the brand was very adept at.

Mitchell also spoke to the inclusion of tech into physical stores as a selling and customer experience tool.

"So really, marrying the digital and physical experiences we talked about, we have technology in the stores to shade match you, so a lot of people for the first time, they’re buying foundation or just checking to see if they’re using the right one… we can bring that technology from a mobile phone into the store," he said.

Hurley also addressed the prevalence of the digital experience and how Claire's has sought to replicate that in a physical way by offering a broad array of product options to enhance the feeling of customization for the company's up-and-coming customers.

"I think as an elder, it’s like, ‘Oh, you are either in a digital space or you are in a physical retail space,’ and to these kids, it is incredibly fluid," she said.

"The access to information they have is crazy," Hurley added. "Their world is so fluid... How do we make sure that we’re building an experience similar to the one that they actually see on Roblox where they have this access to a whole broad range of product that shows how they want to come to life in the real world?” she asked, before continuing.

“Digital is really important... but physical, especially for these younger Gen Alpha kids, physical is really important to them. It’s the first time they’re showing up and buying on their own — I mean, not buying on their own, obviously, a parent is buying — but they’re let into Claire’s to guide the experience. And it’s really one of the first retailer experiences that they drive. They have that on Roblox as well, but in real life, we're [Claire's] the first one. We have piercing, which is a huge coming-of-age moment, especially for young women... so for us, physical is still incredibly important for our business, but matching the experience and expectations that they are seeing in the digital world,” Hurley concluded.

Burke, representing a digitally native brand, spoke to the Roblox phenomenon and how quickly it had emerged on the scene.

"Broadly speaking, this generation doesn't distinguish between digital and physical. They are one and the same to them, they are very immersed in every facet of their lives. Our audience is updating their avatars and personalizing their avatars tens of billions of times annually…lots of choice and lots of customization," Burke began.

Burke gave examples of partnerships with Fenty and Sephora wherein Roblox users could take advantage of a lip balm laboratory in-game, coming up with a customized product. Fenty Beauty founder and international pop star Rihanna eventually picked her favorite from the offerings, and that lip balm was then replicated in the real world and sold on Sephora shelves.

“Gen Z in our research has said recently that 56% of them have said that styling their avatar, or virtual styling, is more important than physical styling. So we have to pay attention to this… we are often encouraging brands to kind of lean into that, lean into that community collaboration," she added.

Claire's, Sephora, and Roblox Reps Talk Retail Trends To Keep an Eye On

Closing out the panel discussion, the three execs on stage were asked which particular retail trend each brand had its eye on.

As for Roblox, Burke said that the rise of AI would continue apace and that the hybridization of user-creators would also be foundational to the platform's future.

"[Democratization] really allows users not just to be creators but also to be consumers... That cross-pollination between digital and physical is going to be increasingly important. I think you're gonna see it going in bold ways in the future and not just enabling a path to purchase through platforms like Roblox, but also when you're in a physical retail space, you know, seeing something that was born out of a digital creation," she said.

Hurley talked about the dual forces of navigating different physical market disparities, as well as the divide between digital experiences and physical retail realities.

"I'm from Chicago. There's some cool things that happen in Chicago, but not nearly as much as that happens in New York and LA, so the rest of the world is actually craving all of those things. I see them on TikTok. They get to experience them in digital, but we're not seeing it through the rest of retail, and I think that's gonna be a really important thing that we need to figure out with retailers," Hurley noted.

Meanwhile, Mitchell reiterated Sephora's focus on authenticity, pointing out that not listening to Gen Z employees' advice could lead to some serious cringe moments for managers — and the brand at large. Beyond that, a focus on phygital relationships (physical-digital) could lead to some reputation-building in the future.

"When it comes to loyalty, people want to have their avatar treated in the same way that their IRL person is treated and recognized for who they are, and that’s just going to become increasingly important as we go forward,” Mitchell said.