Retailers are quietly rewiring the way you shop, and the change starts with a coffee counter. Gen Z experiential retail, the strategy of pairing merchandise with experiences like cafés and food service, has become the fastest-growing playbook for brands trying to hold on to younger customers who might otherwise pass a storefront without a second thought.
From Coach to Uniqlo, the country’s biggest names are betting that a $6 latte can do what a marketing campaign cannot. So far, the numbers are backing them up.
How Gen Z experiential retail works
The logic is simple. Get a shopper to linger, and they are more likely to buy. A study cited by Retail Sensing found that “a 1% increase in dwell time resulted in a 1.3% increase in sales.”
A café is one of the most reliable ways to stretch that dwell time. Order a drink, sit down for 20 minutes, and the odds of drifting toward a rack of clothing or a display of accessories climb sharply. The revenue math scales up too. McKinsey research found that “improving the customer experience has increased sales revenues by 2 to 7 percent and profitability by 1 to 2 percent,” with shareholder returns climbing 7 to 10 percent alongside.
Joe Pine, co-author of the “Experience Economy,” offered a blunt take to CNBC. “I’ve long said that the easiest way to get in the experience business is to add a café because it engages all five senses, and it gets customers to spend more time with you.”
Why brands are chasing Gen Z shoppers with coffee
Coffee is the affordable entry point. A latte costs a fraction of a luxury handbag, which means younger shoppers can visit high-end stores without needing to spend hundreds of dollars each trip. That access keeps the brand in their routine even during years when their budget cannot stretch to a leather bag or silk dress.
“You can afford a coffee more often,” Marcus Sanders, vice president of global food and beverage at Coach, told CNBC. “So I think that’s what we’re excited about is our customers being able to visit us more often.”
Coach CEO Todd Kahn framed the shift as a direct response to changing expectations. “We understand the consumer today loves experience,” Kahn said. “They want a full experience, particularly the young consumer.”
The best stores to hang out at right now
Several major retailers have already turned their locations into some of the best stores to hang out in, thanks to full-service cafés tucked into the shopping floor.
- Coach opened four locations of The Coach Coffee Shop in 2025, pairing pastries and espresso drinks with the brand’s handbags and accessories.
- Ralph Lauren launched its first café in 2014 and now operates more than 40 Ralph’s Coffee locations worldwide. A new outpost just opened in Boston’s Seaport neighborhood, joining 30 U.S. cafes across New York City, Chicago, Miami, D.C. and Newport Beach.
- Target partnered with Starbucks in 1999 and by 2002 was adding a Starbucks to nearly every new store. “When we work with iconic brands, we build lasting relationships,” Christina Hennington, chief growth officer for Target, told Modern Retail in 2023. “With a Starbucks in nearly all of our stores, they have become part of the shopping ritual for many of our guests.”
- Uniqlo opened its first Uniqlo Coffee in the United States in 2025 at its Fifth Avenue flagship in New York City. A spokesperson told Time Out New York the goal is to “create a warm and welcoming environment that reflects our Japanese values of hospitality and thoughtful service.”
What it means for shoppers
The trend is not slowing down. More brands are expected to test food and drink concepts as they compete for the kind of foot traffic ecommerce cannot easily replicate. For Gen Z, that means the flagship store is becoming a hangout again, one macchiato at a time.
