Physical stores are being repositioned as key battlegrounds for future retail growth as brands move to capture the rising spending influence of Generation Alpha, a cohort expected to reshape consumer behavior through a strong preference for in-person shopping experiences.

According to retail strategy insights from Candice Medeiros of WGSN, Gen Alpha — those born between 2011 and 2025 — is already showing signs of steering how stores are designed and experienced, despite growing up in a highly digital environment.

“Despite their technologically equipped upbringing and digital nativity, this iPad generation expects more than a simple transaction; they see physical stores as interactive third spaces for creativity and discovery,” Medeiros said in a forecast.

The generation’s inclination toward in-store shopping is partly linked to its formative years during pandemic lockdowns, when digital interaction replaced much of everyday physical socialization.

Medeiros said Gen Alpha is expected to become a major economic force, with spending power projected to reach $5.46 trillion by 2029, nearly matching the combined influence of Millennials and Gen Z.

“As this generation grows in importance, brands should anticipate Alphas to trigger a pendulum swing in consumption, with physicality and touch being key elements,” the report noted. “For retailers, store innovation will be a crucial investment area to build the foundations of loyalty that carry Alphas into adulthood.”

Retailers were advised to rethink store design as experiential spaces rather than purely transactional environments, with emphasis on sensory engagement, interaction and social connection.

Medeiros highlighted the need to “satisfy Alphas’ sensory hunger,” encouraging brands to move beyond traditional shelf-based retail and create spaces where customers can explore, socialize and personalize their experience.

“Expect extra value to be placed on the physical, textured and tactile as this group proactively chooses to address the effects of a life lived chronically online by actively rejecting dulled senses and emotional discontent,” she said.