Empathy becomes critical for APAC retailers adapting to Gen Z

Retailers must balance AI with human touch.

As Asia-Pacific retail transforms post-pandemic, one factor is becoming increasingly essential: empathy. According to Guillaume Sachet, Partner at KPMG in Singapore, retailers now face the urgent challenge of meeting Gen Z’s expectations for both digital convenience and genuine human connection.

“If the transaction or the interaction, the touch point becomes more complex, there is an expectation that human touch will come in,” explained Sachet. While retailers are investing in automation and AI to streamline transactions and personalise experiences, they must ensure that these technologies do not replace the need for empathy-driven interactions.

Sachet noted that “41% of Gen Zs would rather lose their wallet than their smartphone,” emphasising their reliance on mobile technology. But beyond convenience, these consumers want brands that care. Retailers, he said, must be able “to treat [Gen Z consumers] with being helpful, treating them with care, and really showing that empathy that the customers need.”

The rise of AI in retail brings both opportunities and risks in this area. Sachet pointed out that “88% of consumers make purchase decisions via AI-led recommendations,” and AI-driven tools are highly effective at anticipating consumer needs through personalised suggestions.

However, over-reliance on automation can risk making interactions feel impersonal, especially when consumers encounter complex issues. According to Sachet, the key is balance: “More and more, we see a bit of a dilemma for retailers between the full digital and the full automation, but at the same time, the need for human touch, the need for empathy.”