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The holidays bring together retail executives and parents alike with one driving question: What do the kids want this year?
That can be as simple as which toys are hot or as complex as what the youngest generations are looking for out of their shopping experience. With the oldest Gen Alphas learning to drive (researchers pin the start of that generation at around 2010), we’re nearing the point where retailer interest shifts off of Gen Z and onto future shoppers.
For the time being, both are firmly in focus. The distinction between generations is not a do-not-cross line, either, and members of each group share many characteristics.
The youngest Gen Zs and oldest Gen Alphas, both in their teens, are price-sensitive, digitally savvy and enamored by physical retail experiences. They wield significant influence on household purchases, despite having little money of their own, and perhaps most distinctly — they were exposed to AI early.
“First was millennials, which were sort of the first digital generation. Then there was Gen Z, which was the first social media and iPhone generation, and now it’s Gen Alpha, which is going to be known as the AI generation,” said Matt Britton, founder of AI consumer intelligence platform Suzy and author of “Generation AI: Why Generation Alpha and the Age of AI Will Change Everything.”
“They’re the first generation to grow up with AI in the household, and it’s rewiring their brains in a way that’s going to make them distinct,” Britton said.
Still, it would be a mistake to treat all members of Gen Alpha the same way. Like any generation, there are different cohorts with different preferences within the demographic’s borders.
Joeri Van den Bergh, a generational trends expert and professor at Vlerick Business School, discovered four main subsets during a study of Gen Alphas in the U.S. One group was focused on influencers and self-expression; another on celebrities and pop culture characters; a third on trends and appearances; and a fourth on the environment and social concerns.
“When you look into Gen Alpha research, we often see that they’re all interested in the environment. They’re all influenced by content creators and celebrities,” Van den Bergh said. But that’s not actually the reality, he added. “There’s not one solution for all Gen Alphas, and the same goes for Gen Z.”
This holiday season, here’s what retailers should keep in mind about the industry’s youngest shoppers.
Opening the internet’s ‘new front door’
No matter what else changes with Generation Alpha, AI is sure to be a big part of the conversation around the young demographic.
Gone are the days of searching on Google, seeing an ad on Instagram and finally heading to Amazon to make a purchase, Britton said, which he describes as the principal method of operation over the last two decades or so. AI chatbots are now taking over the role of discovery, engagement and eventually purchasing, which makes a built-out AI strategy a must for retailers.
“The internet now has a new front door,” Britton said.
Retailers need to ensure they’re investing in these new discovery channels, and many already are. In 2025, for example, Target launched an AI holiday gift finder that generated unique recommendations based on personal details of gift recipients. Kohl’s launched a similar tool earlier this year
“AI has never had its heart broken or felt envy or jealousy.”
Matt Britton
Author of Generation AI: Why Generation Alpha and the Age of AI Will Change Everything
Issues with actually buying products — such as ChatGPT encountered with the debut of its Instant Checkout shopping experience — are likely short-lived, according to Britton.
What becomes more important in this environment is one of retail’s fundamental rules: building an emotional connection with shoppers outside of the transaction.
AI doesn’t understand the emotional reasoning that drives purchases “because AI has never had its heart broken or felt envy or jealousy,” Britton said. “When you think about authenticity, think about content and the creator economy and how your brand is perceived — I think that happens still largely outside of the world of AI.”
Increased reliance on AI isn’t just a Gen Z and Gen Alpha trait. Marketing firm Attentive found that two-thirds of shoppers have used AI to make a purchase within the last three months. That share rises to 80% for Gen Z shoppers, though.
The technology also reinforces an inclination among Gen Z and Gen Alpha toward ever more personalized experiences. These groups grew up with personalized recommendations and products, and that expectation will only grow with AI.
They’ve embraced cocreation and see products as a method of self-expression, Gen Z Planet founder Hana Ben-Shabat said via email. Anything that can tap into that desire for creation and personalization will likely play well with young shoppers, she noted.
Not all of the methods for connecting with a chronically online generation have to be driven by AI, either. Retailers can also invest in tools that allow kids to more easily save products from social media sites and other places they frequent and share those with parents, Ben-Shabat said.
In fact, retailers would do well not to forget that much of Gen Alpha are still children. Catering to their parents over the holidays can be equally as important as pitching to the kids themselves.
“People are exhausted from the choice.”
Emily Albright Miller
Executive Vice President of Retail Design at JLL
For Gen Zs, that means primarily Gen X parents, while Gen Alphas have largely millennial parents. While both sets of parents are influenced by their children, millennials involve their children in far more purchasing decisions, according to Van den Bergh.
For retailers, that means not just highlighting the educational elements of a toy, for example, but also being aware that kids are influencing categories like snacks as well.
Van den Bergh also stresses that while Gen Alpha may have been exposed to AI early on, they are not necessarily “natives” of the technology. They don’t fully understand the dangers of AI, though they are certainly used to using it.
“They’re still kids, so the whole literacy thing is quite important,” Van den Bergh said, urging brands to be cautious with digital tools aimed at children.
In a word, investing in AI and e-commerce is a must for connecting with young shoppers. But those aren’t the only channels retailers will find them frequenting this season.
Using stores to ‘break the mold’
As embedded as digital tools are in young shoppers’ lives, there is also a growing fascination with all things Y2K. And there’s almost nothing more 2000s than the mall.
Like Gen Z before them, Gen Alpha has a penchant for in-store shopping. Look no further than the Sephora kids phenomenon — which drew attention both negative and positive — to see the enduring interest in physical retail for young shoppers.
While criticism around children buying beauty products abounds, Van den Bergh sees another takeaway from the Gen Alpha interest in Sephora.
“It’s not about what the product is doing. It’s more about the packaging. It’s about the texture. It’s about the rituals,” Van den Bergh said. “It’s about being able to choose something yourself, just like adults are doing. To go with your friends, and it’s a social activity as well. … The kids want to experience adult stuff in a kids-friendly way.”
E.l.f. Cosmetics is also doing a good job in that space by offering dupes that are more affordable to young shoppers, Van den Bergh said, and both are capitalizing quickly on new trends.
Perhaps as a result of that, E.l.f. Cosmetics topped the list of cosmetics brands that teens are shopping, according to Piper Sandler’s annual Taking Stock With Teens survey. Sephora, meanwhile, was the No. 1 beauty destination for teens.
Physical stores might also be emerging as a relief from all of the AI-ification of young people’s lives, a recent JLL study found.
“People are exhausted from the choice,” Emily Albright Miller, executive vice president of retail design at commercial real estate firm JLL, said of online overload. “They’re using the large language model, but now they’re starting to realize it almost knows them a little too well, right?”
In this context, physical stores offer a way to “break the mold” and make different choices, Miller said. Gen Z, the youngest generation JLL studied, are the most eager to opt out of things like personalized recommendations, with 45% saying that online recommendations limit what they’re allowed to like.
“They are still trying to figure out who they want to be when they grow up. They’re trying on different personas. They’re engaging in different activities that they’ve never tried before — and it becomes hard to break out of the algorithm,” Miller said. “Maybe you’re emo and you really like to shop at Hot Topic, but then you decide, ‘Hmm I really want to go shop at Vineyard Vines and try on this preppy look.’ Well, that’s really hard.”
In stores, on the other hand, young shoppers have more flexibility.
“When you go to a retail environment, that’s not an issue,” Miller said. “You can walk in and browse and experience any assortment that you’re into that day, and there’s no barrier for you.”
JLL’s research also found more broadly that shoppers want different things out of their online versus in-store experience. When they shop in person, they’re more interested in getting away from their devices than using more screens and technology in a store setting.
“We want it to be sensory. We want it to be tactile. We want to have human connection,” Miller said.
Those are all things that physical retail tends to be very good at during the fourth quarter. Holiday playlists, wreath decorations and pine fragrances set the scene for seasonal shopping. When done right, that enhances the customer experience. But retailers should also consider what type of vibe they want their stores to have — and that might involve an area that leans a little calmer.
Overstimulation caused by in-store screens and other tech is a serious deterrent for shoppers across generations, according to Miller. JLL found that 72% of consumers left a store earlier than planned because they were overwhelmed, a metric that jumps to 81% for the neurodivergent population. Miller sees that only growing as people’s everyday lives become more stimulated.
So what does it take in this environment to earn a place at the top of teens’ minds? “It’s a bit this combination of staying on trend, creating an experience, being affordable and understanding how you can become part of the culture of both the kids and Gen Z,” Van den Bergh said.
Piper Sandler’s teen survey, released last fall, listed Nike, Brandy Melville and Coach as some of the most popular apparel and accessories brands for the cohort. Nike just this summer launched a new fleece line marketed at young shoppers, while Coach has talked extensively about its efforts to court Gen Z through personalization and unique store experiences.
Earning teens’ roughly $2,200 in annual spend is a multifaceted effort, but perhaps most of all, it requires staying on top of what’s hot, which is changing even faster nowadays as young people are more connected to global trends.
It’s a question of “understanding what is the next thing that is really relevant to this generation,” Van den Bergh said, “and it’s probably coming from all different corners of the world, not just from the U.S. or locally.