The Future Consumer: Why Retail's Next Decade Belongs to Those Who Know Exactly Who They're Serving
Click here for the full Future Consumer whitepaper
For decades, retail could rely on a simple continuity: each generation consumed much like the one before it. Gen X followed and mimicked the Baby Boomers. Retailers could look at what made them successful in the past and reasonably expect it to work again.
That continuity broke somewhere between 2019 and 2020. Millennials became the influential consumer, and then COVID and a volatile political landscape shattered the pattern entirely. The 2020s are now tracking as Australia's worst decade for living standards growth on record, with GDP per person averaging just 0.7% a year since 2020, a third of the rate we saw in the 1990s. One to two major economic shocks a year has become the new business cycle. Volatility isn't a season retailers need to ride out. It's the new normal.
Why Gen Z Won't Play By the Old Rules
Gen X followed and mimicked Baby Boomers. Gen Z aren't doing the same with Millennials, and there's a reason for that: the social contract broke for them. Today's 25 year olds earn less than their parents did at the same age, while carrying far more debt. In the US, under-40s now hold just 7% of household wealth, down from 12% in 1989, while over-70s hold 30%. Australia's dynamic mirrors this.
Gen Z and Alpha are highly mercurial. They say one thing and do another. And the lesson for retailers is uncomfortable but simple: you can no longer look at what made you successful previously and expect it to work in the future.
Retailers must optimise for both their current and future customers, and that means knowing exactly who they are, beyond demographics.
Six Levers Reshaping Retail Right Now
Newness wins, replacement loses.
Anything that constitutes "replacement" is now serviced by the big marketplaces, Shein, Temu and Amazon among them. Temu had 5 million Australian shoppers in 2025, up 17% year-on-year. Shein had 2.9 million, up 28%. Amazon added another 500,000 shoppers from an already larger base. All retail apparel relies on full-price basics to exist, and that model is under direct challenge. Growth now demands genuine newness and innovation, not just stock.
Second-hand has no ceiling in sight.
When asked which categories they most want to buy second-hand, Australians ranked books and music highest (42%), followed by collectables, homewares, electronics and fashion. Value has shifted from op shops to digital platforms: Facebook Marketplace, eBay, Depop, and brand-run resale channels like Patagonia Worn Wear. Vinted, Europe's largest second-hand fashion marketplace, launched in Australia with a direct UK shipping corridor from day one, a level of investment that signals real confidence, not a token test. The one caveat: anything with a "use by date" will find growth hard to come by. Trend-driven items lose resale value fast, favouring durable, quality-branded goods instead.
Casualisation has met convenience, permanently.
Remote and hybrid work reset dress norms for good, and the social permission to dress down has stuck. Dress codes keep loosening across every occasion, weddings, work, travel. The competitive question has shifted from "should we make casual clothing" to "who makes casual effortless": low-effort to shop, low-effort to style, low-effort to maintain. The winners are brands built for hybrid versatility, not single-occasion specialists.
Mass market generalists are becoming specialists.
Kmart's K Home, a standalone homewares store built around its Anko private label, might be the first time IKEA has been put on notice in Australia. Why does this work? Breadth has lost its power now that any product is a search away. Specialists win on expertise and curation, credible advice generalists can't match, and the margin structure rewards them, customers pay for expertise, not just product.
Luxury is fighting on two fronts.
For two decades, luxury's growth engine was the Chinese consumer, from just 1% of global luxury spending in 2000 to roughly 35% at the 2019 peak, pulled back to around 25% amid China's property downturn and a shift to quieter consumption. So luxury is fighting for its next customer (LVMH's Formula 1 partnership is a strategic play for a younger, affluent audience) while defending its pricing power against dupe culture and resale. The brands that win will make the original feel irreplaceable, craft, heritage and scarcity a dupe simply can't copy.
AI is powerful, but it isn't the whole answer.
It's already transforming stock management and marketing. But Australian retail talks a bigger AI game than it plays: 89% of retail leaders call personalisation strategically important, yet only 10% can actually deliver it at scale. Woolworths and Coles are the visible exceptions, running live smart-store checkout and AI-powered trolleys while most of the sector is still stitching fragmented systems together. Meanwhile consumers are meeting retailers halfway, over a third of young Americans use AI chatbots daily, and nearly half of engaged younger users have bought a product they discovered through AI. But AI raises the bar for experience above a low-cost functional baseline, it doesn't replace the human. In-store interaction remains a retailer's biggest cost, and its biggest differentiator.
The Growth Web: Three Human Forces, One Destination
Underneath all of this sits something more fundamental than category trends. Three human forces are driving genuine, sustained growth across sport, travel, beauty and hobbies: Experience & Escapism (spending on memories over things), Community & Belonging (the shared joy of doing something together), and Self-Optimisation (buying products to become a better version of yourself).
Sports & Recreation sits at the busiest intersection, driven by all three forces at once. The Sydney Marathon drew a record 32,963 finishers in 2025 and became Australia's first Abbott World Marathon Major, and the 2026 ballot drew over 123,000 entries, up 56%. Yet the category has been chronically under-serviced. Rebel Sport dominated for years largely unchallenged, Decathlon's build has been slow, and only now is real competition arriving, Sports Direct opened its first Australian store in November 2025 and is targeting up to 100 stores across Australia and New Zealand.
Travel sits in Experience & Escapism, and the numbers back it up: Australian domestic visitor spend reached $109 billion in the year to March 2025, 151% of pre-COVID levels. Travel is now Australians' number one savings goal, ahead of any physical purchase category.
Beauty & Skincare is the web's most interesting node, driven by both Community & Belonging (shared, influencer-led discovery) and Self-Optimisation (personal reinvention) at once. Australia imported $180 million worth of Korean beauty and skincare products in 2025, yet W Cosmetics remains the only retailer with a genuine national physical network in the category, around 39 stores, a fraction of what a category this size should support.
Hobbies & Crafting is being reshaped by the same economic and social forces: cost-of-living pressure driving a "make instead of buy" mindset, and social platforms turning solitary crafts into community activity. The category's basics have already been commoditised by the big marketplaces, Temu runs entire craft supplies storefronts, priced up to 40% below traditional craft stores. That leaves the real opportunity sitting exactly where marketplaces can't compete: personalisation, experience and community.
Where It All Lands: Health, Wellness and Pharmacy
Every path in this web ultimately arrives at Health & Wellness, whether through mental health, physical performance or self-optimisation. Australia is already leading globally here, named the world's number one wellness tourism destination in 2025, with $29 billion spent annually. Protein, fibre and sleep have become genuine consumer obsessions, and preventive care, saunas, cold plunge, biomarker screening, is moving from clinical to retail.
But Australian demand is running well ahead of Australian access. The TGA keeps much of this category tightly restricted, while consumer appetite keeps climbing regardless. That gap is itself part of the opportunity, and part of the complexity, for anyone entering the space.
Pharmacy is where it all culminates commercially, and it's an underdeveloped opportunity locally. Australian pharmacy retail is practical, not experiential, we go in with a list, we don't scour the shelves for what's new. Compare that to Paris, where the pharmacy is a genuine skincare discovery destination. GLP-1s and peptides represent a massive opportunity here: roughly one in five committed wellness consumers in the US are currently on a GLP-1, and peptide search interest hit an inflection point in early 2026, with a grey market estimated at US$1 to 3 billion.
The Bottom Line
Every thread in this story, the broken continuum, the rewiring of Gen Z, the six levers reshaping categories, the growth web converging on wellness, comes back to the same conclusion.
We've all become incredibly reliant on our existing customer. But they're not going to keep us relevant. And if you don't understand your future consumer, you will cease to exist.
Click here for the full Future Consumer whitepaper
RetailOasis has spent close to two decades helping retailers see around corners: who their customer really is, where the category is heading, and what to change before the market makes the decision for them.
If any of this sparked a question about your own current or future customer, we'd welcome the conversation.