AI and Gen Z: How Technology is Reviving the In-Store Experience

For years, headlines foretold the demise of brick-and-mortar retail. As e-commerce boomed and digital convenience reshaped consumer behavior, many predicted physical stores would fade into irrelevance.

However, today's flagship locations tell a different story. Shoppers, especially digital natives like Gen Z, are showing up in person for immersive brand experiences, hands-on product demos, and personalized services like Apple’s Genius Bar.

Today’s retail stores are curated spaces for connection, community and brand immersion. These physical locations deliver high-touch experiences and value-added services that online-only channels struggle to match.

So, what happened? For starters, retail didn’t vanish. It evolved. Gen Z, raised on social media and one-click convenience, is redefining the shopping experience. For this generation, it’s less about the transaction and more about convenience, self-expression and how seamlessly a brand fits into their everyday lives.

Research from Adyen shows that 64 percent of Gen Z shoppers still prefer in-store purchasing because it offers what digital channels can’t fully replicate: instant gratification, sensory interaction and authentic human connection.

The In-Person Retail Evolution

The best retail brands have always been emotional storytellers. What’s different now is how that emotion is engineered. Artificial intelligence is powering smarter, more predictive experiences that anticipate customer needs before they even walk through the door.

Imagine a store that adjusts its layout, lighting or playlist based on local weather or trending TikTok content. Or sales associates equipped with AI-powered assistants that provide personalized recommendations in real time.

This isn’t some future-state vision. It’s already here. Smart retail systems are now synthesizing vast behavioral and contextual data to deliver personalized, moment-specific experiences that align with each shopper’s intent and emotional state.

AI is transforming physical stores from static points of sale into responsive, living ecosystems. Retail locations are quickly becoming spaces that learn, adapt and evolve with every customer interaction.

No generation has blurred the line between digital and physical like Gen Z. Their expectations for immediacy, authenticity and sustainability are reshaping retail at its core. They want the online world’s convenience and personalization alongside the real world’s tactility and transparency.

And AI is the bridge that makes it possible. Through data insights, generative design and predictive analytics, AI allows retailers to blend digital and physical experiences seamlessly, turning stores into spaces of participation, not just consumption.

For example, when a Gen Z shopper enters a flagship beauty store, AI might use aggregated (and anonymized) data to predict what products they’ll likely explore next. It can help staff engage in smarter, more relevant conversations that build trust, not pressure.

AI can even help brands track the emotional arc of a visit, from curiosity to conversion, using subtle signals like dwell time, pathing or engagement levels.

From Efficiency to Empathy

AI in retail is evolving beyond simple optimization (supply chains, pricing) to human-centric empathy, driven by Gen Z's redefinition of value. Today's winning retailers use predictive analytics, natural language tools and vision AI for augmentation, enabling associates to act as curators and transforming data into dialogue.

This shift is powering the resurgence of retail spaces that offer the trust, tangibility and emotional resonance digital alone can’t deliver. But to succeed, these stores must function as connected ecosystems, merging digital intelligence with human creativity to become high-impact cultural touchpoints where brands and consumers co-create meaning.

The future of retail lies in deepening the dialogue between humans and machines, where AI doesn’t replace people but enhances uniquely human characteristics like empathy, creativity and intuition. Success won’t hinge solely on conversions, but on emotional resonance and the customer’s sense of belonging.

By enabling the kind of meaningful experiences Gen Z craves, AI is revitalizing physical retail, turning every store into a platform for connection, storytelling and brand rediscovery.

Santiago Noziglia is CEO, retail, CPG and automotive studio at Globant, a digitally native company that helps organizations thrive in a digital and AI-powered future.