Value is no longer just about low prices and flashy promotions – the new generation of shoppers are prioritising brands that make them feel understood says Richard Valente, Vice President – CX Strategy at TP in Australia.
Christmas shoppers may have become more discerning due to the cost-of-living crisis, but they’re still ready to spend. Data from Retail Safai shows 79% of Australians plan to spend the same or more on gifts this year as they did last year, with an average gift budget of $667.
In a crowded, competitive market, the challenge isn’t just offering the best price; it’s about creating experiences that make customers feel valued, particularly as Gen Z shapes spending trends, says Mr Valente.
“These digital natives don’t just want bargains; they want experiences that feel personalised and emotionally engaging,” he said.
“Shopping is intertwined with social interaction and emotional experiences and they expect brands to understand their values and connect with them seamlessly across channels.”
Competing on more than cost
As festive spending heats up, the retailers that win won’t just compete on cost. They’ll combine AI-driven personalisation, automation-enabled efficiency, and emotionally intelligent service to create an experience that feels personal and full of value, says Mr Valente.
Efficiency: AI is redefining how retailers deliver both value and experience. AI-driven algorithms now analyse past purchases, browsing behaviour, and preferences to craft highly relevant offers and recommendations. This gives customers the sense that brands genuinely “get” them, says Mr Valente.
Automation: From chatbots that handle order tracking to smart fulfilment systems that predict peak-time delivery bottlenecks, automation reduces friction and accelerates service. With the meeting of efficiency and empathy, brands can keep costs down and improve customer satisfaction, says Mr Valente.
Customer loyalty and emotional intelligence: technology alone can’t deliver loyalty. Emotional intelligence (EI) and the ability to recognise and respond to customers’ emotions is what can really build these connections. This is especially true during the holiday rush when emotions run high.
“Customers may forget the details of the issue but they’ll remember how the brand made them feel and whether they felt heard and valued,” Mr Valente said, noting that TP specialises in combining AI with EI and human touch to anticipate customer needs and expectations.
Omnichannel journeys: Gen Z shoppers don’t distinguish between channels. They browse on social media, buy online, pick up in-store, all the while expecting it all to work effortlessly says Mr Valente. The most successful retailers are those that ensure the experience is consistent and that loyalty points, inventory visibility, and customer context travel with the shopper wherever they go.
“At the end of the day, customers may come for the savings, but they stay for how they are made to feel,” said Mr Valente. “An uncompromised customer experience is the key!”
