Market Insight: Retail - Navigating Changing Customer Expectations
In the hit 1970s TV show ‘The Generation Game’, teams drawn from multiple generations of families tackled challenges together using the skills, knowledge and approaches of each age group to best advantage. Today, while the consumer goods displayed on the show’s famous conveyor belt would have changed out of all recognition, the principles of generational differentiation endure. For businesses, remembering what just went past on a conveyor has been replaced by the more demanding challenge of meeting customer expectations across the generational cohorts.
Customer Experience (CX) is no longer a one-size-fits-all model. Baby Boomers, Gen X, Millennials and Gen Z all engage differently with retailers. The youngest of these groups, Gen Z, is quickly becoming the key demographic as they are the first to have been born in a digital world. They expect seamless, hyper-personalised, omnichannel experiences from their brands and they are also far more ruthless when their expectations aren’t met. Nearly half (48%) of UK Gen Z consumers have abandoned a retailer due to poor CX, compared to just 12% of over-65s. Their successors, the rising Gen Alpha, look likely to be even less respectful of brands or tolerant of substandard CX.
The expectation gap between organisations and customers is widening. How can retailers better meet the demands of Gen Z and the digital generations that will follow? Here are three ways to create consistent and effective digital, social, and self-service experiences to truly satisfy Gen Z and improve sentiment across all customer cohorts.
1. Offer effortless, Omni-channel Experiences
Gen Z values convenience. They want to choose how and when to interact with retailers, whether through web chat, social media or mobile apps, because they’ve been conditioned to expect fast, asynchronous, mobile-first interactions. Channel shift is accordingly being replaced by channel choice as the go-to approach for organisations. Yet while 39% of UK Gen Z customers list channel choice among the top three factors when contacting an organisation, 61% of 16 to 24-year-olds report having to call businesses frequently because digital self-service tools failed to solve their problems.
It’s a double-edged sword: Gen Z wants self-service, but only if it works. This disconnect affects the Customer Effort Score (CES), an increasingly decisive metric that tracks how much effort a customer must expend to resolve their query.
To improve CX for Gen Z, businesses must offer a wide range of digital channels alongside voice, with joined-up transitions between them. Customers should be able to start an interaction on one platform and continue it on another without having to start over. Every touchpoint must be easy to access and tailored to the preferences of its most frequent users. Failure to provide omni-channel experiences doesn’t just damage CES; it risks long-term loyalty and brand reputation.
2. Use Data to Deliver Personalised CX at Scale
Gen Z expects brands to know who they are. In fact, 45% expect a personalised experience during every interaction, such as remembering their preferences, acknowledging their interaction history or anticipating their needs.
Personalisation drives loyalty. A seamless experience where an organisation remembers previous interactions, suggests relevant next steps, and adapts to preferences makes customers feel understood. This level of tailored interaction is no longer exclusive to high-end retail, and it’s quickly becoming the baseline expectation across industries, especially those serving Gen Z.
To meet this expectation, retailers must move away from data silos. A Customer Data Platform (CDP) pulls together data from a wide range of underlying sources into a single pane of glass, giving an organisation’s contact centre workers the real-time insights they need to support customers effectively.
When used well, data builds trust by allowing retailers to create interactions that feel seamless and relevant regardless of channel, making each touchpoint the continuation of a coherent customer journey. On the flip side, beware the backlash that will follow when customer data is not treated securely and respectfully. Fines from regulators will be more than matched by the cost of mass Gen Z customer desertions.
3. Automate Intelligently to Support Human Interactions
Artificial intelligence (AI) can help businesses deliver faster, more efficient interactions across all channels of engagement. Fortunately, Gen Z has always been open to automation, though only when it enhances their CX.
Even with the rise of digital interaction, voice remains essential. 71% of Gen Z consumers report enjoying the personal touch brought by a live phone interaction, which they viewed as the simplest way of solving a complex, emotive, or urgent query. That doesn’t mean voice interactions have to be old-fashioned. Modern interactive voice response (IVR) systems no longer rely on frustrating “press 1 for” menus, instead using Natural Language Processing (NLP) to identify customer intent, capture context and route calls intelligently based on location, preferences and history. All of this information can be surfaced through the CDP, giving contact centre workers the insight they need to personalise an experience in real-time.
During interactions, NLP and generative AI can suggest next-best actions based on relevant vetted knowledge articles, reducing the time spent searching for answers. Real-time transcription and summarisation tools (RTAS) furthermore create accurate post-call notes and prepare data for entry into the organisation’s systems of record, allowing contact centre workers to spend more time focusing on supporting the customer rather than taking accurate notes. Further AI-automated processes deal with customer satisfaction, sentiment and quality management, making all of these metrics readily available to improve performance.
When automation supports, rather than replaces, human connection, it creates a faster and more effective experience. Whether an interaction starts on the phone, via webchat, or in an app, it should feel hyper-personalised and intelligent from start to finish.
Bridging the Generation Gap
In 2025, delivering exceptional CX means meeting each generation where they are, and Gen Z is leading the way in digital-first interactions. No demographic is more important than another, but it is important to monitor trends, especially when younger customers are shaping the future of CX.
Creating a CX strategy only for Gen Z is not the answer, when much of the spending power still rests with other generations. Gen Z does show us where trends are going, though, and in some circumstances their preferences in CX can be surprising, and not something that industry has encountered before.
Supporting a growing number of channels is imperative to solving customer queries efficiently and on the consumer’s terms. By focusing on reducing customer effort, improving personalisation and deploying intelligent automation, retailers can win the new generation game and deliver experiences that earn loyalty and trust, regardless of the customer’s age.
Martin Taylor, Co-Founder and Deputy CEO of Content Guru
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