Gen Z and the Retail Reboot: How SM is Winning Over the Next Generation

The retail landscape is evolving rapidly, and at the forefront of this shift is Gen Z—tech-savvy, socially conscious, and highly experiential. For SM Retail, the department store arm of SM Investments Corporation, this generation is no longer just the future of shopping—they’re the present. In 2024, data from the SM Store showed a 13% increase in purchases from young shoppers, a clear sign that Gen Z is embracing physical retail in ways that challenge expectations.

At the heart of this engagement is SM’s longstanding tagline, “We’ve got it all for you.” According to Jonathan Ng, Executive Vice President at SM Retail, this philosophy continues to guide their strategy—but with a refreshed focus. “It’s not just about variety anymore,” he shared. “It’s about understanding what different generations value, especially the emerging Gen Z market.”

Gen Z, born between 1997 and 2012, now comprises 38% of the Philippine population—about 41 million strong. While older generations like Gen X and Millennials still dominate in spending power, SM is shifting gears to meet the aspirations and habits of these younger consumers. They’re digital natives, but their growing interest in in-person shopping speaks volumes.

Recent studies support this trend. Research from The Fourth Wall and Uniquecorn Strategies in 2024 revealed that 31% of Filipino Gen Z shoppers prefer the physical store experience, citing their desire to see and feel products before buying. Internationally, a 2025 Adyen report found that nearly 75% of global Gen Z shoppers frequent brick-and-mortar stores weekly, showing that the “retail apocalypse” narrative doesn’t apply to this generation.

What draws Gen Z to physical stores is more than just the merchandise. “They want an experience,” said Ng. “That’s why we’re investing in modern store designs and creating environments where they feel comfortable, excited, and inspired.” SM’s strategy includes trend-forward visual merchandising, tech integrations, and lifestyle partnerships that turn shopping into a social event.

One standout example is SM’s collaboration with Coffee Bean and Tea Leaf, transforming parts of their stores into communal hubs. These café corners offer more than caffeine—they represent a shift toward retail spaces that double as lifestyle destinations, encouraging longer visits and repeat engagement.

The emphasis on service also plays a big role. SM’s personal shopper program has been expanded to cater to younger consumers who may want style advice or help navigating large stores. “Customer service is what sets us apart,” said Ng. “It’s not just about transactions—it’s about creating trust and loyalty.”

Beyond customer experience, SM Retail’s adaptability is seen in its financials. In 2024, the company posted a net income of PHP 20.9 billion, a 5% jump from the previous year. Retail revenues also rose to PHP 434.5 billion, up from PHP 412.9 billion in 2023. These numbers underscore how effective their multi-generational strategy has become.

SM’s ability to grow while staying grounded in its core identity is what keeps it at the top of the Philippine retail game. By embracing Gen Z not as a challenge but as an opportunity, the brand is writing the next chapter of its legacy—with style, innovation, and an eye firmly on the future.

As the lines between commerce, community, and culture continue to blur, one thing is clear: SM isn’t just where people go to shop—it’s where a new generation is discovering what shopping can be.