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Retailers today must balance two priorities: delivering dynamic, digitally connected in-store experiences, while maintaining operational efficiency against volatile economics and ongoing margin pressure. Achieving both requires the right combination of technology––applied both behind and in front of the counter––and a clear strategic vision to create physical spaces that meet the rising expectations of today's shoppers. At the same time, these investments can help to address costs, like rising overhead and labour. We've seen through our work with clients that when you match experience with efficiency, retailers can achieve real gains––including sales per square foot rise by 5-15% and conversion rates improve by 10-20%.
Retail reinvention is particularly pressing given that foot traffic to stores is holding its own. And physical stores remain central to the shopping experience. PwC’s consumer insights research shows that 43% of consumers shopped in store on a weekly basis, compared to 34% via mobile (Global Consumer Insights Pulse Survey). Consumers are seeking a blend of physical and digital shopping experiences, with 51% planning to buy online and 53% opting for in-person purchases, as they're being drawn into stores to experience the products (PwC Holiday Outlook 2025).
Globally, reimagining retail means adapting to local consumer habits, tech adoption, and economic challenges. In established markets, retailers are using advanced analytics, AI-driven personalisation, and store automation––helping them connect more deeply and boost productivity. In high-growth economies, investment is often centred on digital payments, supply chain resilience, and omnichannel infrastructure. As retailers localise their transformation strategy to meet new expectations and constraints, they need to be mindful of engaging with ecosystem partners, such as technology providers, logistics and supply chain operators, and B2B customers throughout the process. Retailers that lead this journey will unlock new growth, while those that delay or take half measures risk missed opportunities for growth and market leadership.
Customers want the best of both worlds
Many shoppers, especially younger shoppers, are more at home in the digital world. However, PwC’s ongoing program of retail sector research–including on technological transformation and the pre-purchase experience–shows that consumers want digital experiences that carry over into the physical world, including for stores to match the digital realm in terms of convenience and immediacy. Even the tech-savviest cohorts are drawn to stores. For example, Gen Z in the US are more likely than any other cohort to show a strong affinity for in-store engagement, with 60% using stores for discovery and 56% for purchases. Shopping is not an either-or dynamic, regardless of one’s digital preferences.
Gen Z shoppers also tend to favour physical stores for the social interactions they enable, enjoying visits to malls with friends—as many of their parents did. Retailers who embrace Gen Z's love for sharing experiences online by creating visually appealing "instagrammable" or "ticktokable" spaces can gain an edge over competitors, boosting revenue through larger purchases and higher margins.
Younger shoppers are also more open to innovations that streamline or enhance their experience in stores. Consumers under the age of 45 prioritise in-store digital services far more than baby boomers and Gen X. And again, Gen Z leads the way as evidenced in our 2025 Holiday Outlook survey:
- 72% of Gen Z value self-checkout technology
- 70% of Gen Z prioritise mobile payments
- 68% of Gen Z cite the importance of store/brand apps when shopping in stores
The attraction—and the value—of the physical store has never been stronger. For retailers, the task is to enhance those traditional elements that continue to draw shoppers, while innovating to develop those elements that will carry the store into the future. The first step is to reimagine the store as a whole and then devise a strategy to deliver it.
The store reinvented
With its digital underpinning and demand-driven design, what will the store of the future look like? How will the experience differ? The answer will be determined by the needs and expectations of a retailer’s customers, which have evolved in different ways in different markets. In Brazil, for example, a balance of physical and digital channels is still the preference, although, tellingly, customers tend to supplement their in-store experience by researching and comparing prices on their phones. In India, shoppers that shop in groups and those shopping for larger purchases typically favour in-person, while individual shoppers are more likely to shop online. Meanwhile, in Australia the growth of online shopping may be hampered by the prevalence of delivery theft and customer preference for immediacy that is satisfied in-store. Retailers have the opportunity to effectively address customer needs by tailoring their approach to local preferences.
There are, of course, many areas of overlap and consensus among consumers, with "basic" services that resonate globally. While customers value speed and convenience, they also say they expect in-store entertainment (34%), immersive digital experiences (30%), such as donning a virtual reality (VR) headset to try out new products, and being able to book appointments with a sales adviser or personal shopper (28%) (PwC Global Consumer Insights Pulse Survey).
Retailers can explore various technology-driven solutions to meet customer needs, stay ahead of market trends, and outpace competitors. Our experience with retailers tells us that by doing so, they can boost efficiency and achieve a 10-20% reduction in operational costs. The store of the future will be defined by three core characteristics:
- Immersive, engaging, and digital: The traditional motivations for visiting a store still hold sway—people want to touch, weigh, and compare products first-hand. But many customers want more. They are seeking an experience, and at every step of the shopping journey. This includes:
- AI styling, smart fitting rooms, and storytelling will become table stakes for retailers. Indian retailers are ahead of the curve here, with AI and VR try-ons becoming the norm.
- Loyalty-linked product discovery (e.g., shopping list builders) and gamification are proven to build engagement. One US retailer’s app rewards customers with points for scanning specific items. In China, retailers are using customer data to proactively offer bulk deals on commonly purchased items.
- Customers are also engaged by experiences that feel curated. Agentic AI can leverage the vast amounts of personal data retailers collect to create hybrid experiences that feel unique to each shopper.
- Retailers can provide premium experiences. For example, tiered levels of service and experience based on customer loyalty or other metrics. One department store in India provides access to private shoppers, made-to-measure services, a children’s zone, and entertainment for non-shopping members of the family or group.
- Frictionless and rapid: Disjointed digital and physical experiences frustrate customers. Sixty-eight percent of American Gen Z shoppers, 66% of Millennials, and more than half of Gen X shoppers say a store or brand app is an important part of their in-person shopping experience. While they want the option to linger and engage, they also want a streamlined experience when they are ready to purchase. This includes:
- Mobile apps designed as in-store companions to enable scanning and wishlist building.
- Seamless integration across all channels allows customers to buy online and pay in-store, and features options like Just Walk Out, click and collect, and home delivery. Smart carts and skip the queues with mobile point-of-sale or self-checkout are also offered to simplify the experiences.
- Tech that supports transaction speed, especially during peak times. Frictionless stores use computer vision and provide real-time data retailers can use to manage product performance and supply. One U.S. home improvement retailer uses AI to monitor store traffic patterns and prompt staff to head to the cash register before lines form.
- Common sense services added to their digital offerings. One high-end department store in Australia will hold a size up and down of whatever a click-and-collect customer orders, so that the customer will have alternatives available immediately if the ordered size doesn’t fit.
- Resilient and efficient: Future-ready stores must also be designed for efficiency and adaptability. A well-thought-out blend of technologies and practical analogue tactics, and a ground-up approach to redesigning the store and its footprint, can help retailers achieve this balance. This includes:
- Technologies such as just-walk-out checkout, advanced inventory management, and RFID (Radio Frequency Identification) help reduce staffing costs and shrink while meeting consumer demand for convenience. For retailers, local preferences should of course determine how these tools are prioritised. For example, in Brazil, 40 percent of consumers prefer face payment or self-checkout; while in India, where cashless transactions outnumber credit and cash transactions, customers expect a rapid checkout that matches the sophistication of their UPI-based payments (United Payment Interface [UPI], which allows cashless transactions through QR codes and mobile phones).
- Predictive analytics optimise stock levels without tying up capital, while automation and robotics strengthen supply chains and reduce inefficiencies. In fact, PwC research shows that 20% of retail and consumer markets supply-chain executives expect advanced robotics to have a high impact within two years.
- Modular formats, smaller urban stores, and cost-effective footprints in markets like the U.S., Latin America, and the Middle East further demonstrate how operational innovation can balance efficiency with customer relevance. They also prove that what the store of the future may lose in square-footage can be gained in experiential and emotional connections with customers.
Retailers that proactively reinvent their store ecosystems based around these key elements are, in essence, building the store of tomorrow, today.
A six-step journey to the store of the future
How should retailers think about the development of their stores? Our recommended approach is a six-step journey that delivers benefits as it paves the way for sustainable success.
- Plan the future: Create a retail strategy and roadmap that sets out the organisation’s goals, priorities, and aligns the business behind the transformation.
- Build the foundation: The foundation of the store of the future—and the underlying framework for all channels—is a connected commerce platform. This is the technology that allows for connected, scalable tech, and a channel environment that supports growth.
- Activate insights: Retailing leaders will rely on data and AI to deliver retail insights to support rapid decision-making in response to changing trends.
- Engage the customer: The benchmark for all retailers will be seamless, personalised experiences, delivered to customers at every possible touchpoint.
- Optimise operations: Frictionless retail operations provide speed, efficiency, and consistency across fulfilment and retail.
- Expand smarter: Retail leaders will design and optimise their physical and digital footprints based on customer behaviour insights and market opportunity.
Retail leadership will increasingly be held by those that actively reimagine what a store can be and use the full range of technology to bring that vision to life. The challenge is not only giving customers what they want—a tall enough order—but ensuring that those various elements add up to a unified experience. It's this combination of experience, seamlessness, and efficiency that will create the successful stores of the future.
© 2026 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only and should not be used as a substitute for consultation with professional advisors.
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