SM Retail, Inc., the retail arm of SM Investments Corporation, is deepening its engagement with the Gen Z market, marking a significant shift in consumer behavior and retail strategy in the Philippines. The SM Store, the company’s flagship department store chain, reported a 13 percent rise in in-store purchases by Gen Z shoppers in 2024, signaling a renewed interest in brick-and-mortar retail among younger consumers.
Executive vice president Jonathan Ng attributed the trend to Gen Z’s preference for experiential and tactile shopping. “Filipino shoppers, especially Gen Z, are more experiential and tactile in their shopping preferences,” Ng said. “We’re placing greater emphasis on engaging with Gen Z, who are quickly becoming an influential consumer group.”
Gen Z, defined as those born between 1997 and 2012, now comprises 38 percent of the Philippine population—roughly 41 million individuals, according to the Philippine Statistics Authority. A 2024 consumer study by The Fourth Wall and Uniquecorn Strategies found that 31 percent of Filipino Gen Zs prefer shopping in physical stores. This aligns with global trends, as a January 2025 report by Adyen found that nearly 75 percent of Gen Z worldwide shop in-person at least weekly.
To capitalize on this trend, SM Retail has been investing in modern store designs, enhanced customer service, and experiential partnerships—such as its collaboration with Coffee Bean and Tea Leaf—to create more inviting in-store environments. Personal shoppers, curated discounts, and immediate product availability are part of the strategy to capture Gen Z loyalty.
The company’s inclusive market approach—”We’ve got it all for you”—continues to resonate across age groups, but its targeted Gen Z engagement reflects a forward-looking strategy. “While Gen X and Millennials still lead in purchasing power, we’re strategically investing in Gen Z,” Ng added.
SM Retail’s adaptation is also contributing to the financial strength of its parent company. In 2024, SM Retail posted a net income of P20.9 billion, up 5 percent year-on-year, with retail revenues growing to P434.5 billion.
As SM Retail aligns its operations with evolving consumer expectations, its focus on innovation and demographic engagement reinforces its leadership in the Philippine retail landscape and strengthens the broader commercial performance of SM Investments.
