What: AI-generated nostalgia and escapist marketing are reshaping retail strategies and consumer engagement in 2025.

Why it is important: This shift demonstrates how retailers are adapting to changing consumer desires by prioritising emotional resonance and escapism over traditional authenticity, as confirmed by recent industry analyses.

In 2025, the retail industry is witnessing a profound transformation as AI-generated nostalgia and escapist marketing take center stage. Gen Z consumers, overwhelmed by constant connectivity and digital saturation, are gravitating toward idealized visions of the past, often created with advanced AI tools. These digitally fabricated memories, though inauthentic, evoke strong emotional responses and drive purchasing behavior, prompting retailers to rethink their approach. Rather than focusing on strict authenticity, brands are now crafting immersive, emotionally resonant experiences that tap into collective longing for simpler, low-tech times. Social media platforms are flooded with AI-generated content that blurs the line between reality and fantasy, while luxury brands and mainstream retailers alike are launching campaigns that blend nostalgia with cutting-edge technology. This new paradigm requires retailers to balance technological innovation with the emotional needs of next-generation consumers, ensuring that their messaging resonates on a human level. As escapism becomes a dominant force, the industry must adapt to meet evolving expectations and redefine what authenticity means in a digital age.

IADS Notes: The interplay between technology and nostalgia in retail is increasingly evident as Gen Z’s purchasing behaviour is shaped by AI-driven content and escapist marketing strategies. In May 2025, Vogue Business reported that Gen Z’s reliance on AI for fashion advice and shopping recommendations is fundamentally altering traditional retail dynamics, with 72% of consumers now expecting AI-enhanced experiences. This aligns with the September 2025 Inside Retail analysis, which found that brands are shifting from mass-market approaches to community-driven engagement, leveraging cultural fluency and exclusivity to foster loyalty and belonging. The January 2025 Robin Report highlighted the rise of experiential retail, where consumers prioritise emotionally resonant experiences over authenticity, driving innovation in both traditional and unconventional retail spaces. Meanwhile, the Financial Times in September 2025 documented the adoption of AI-generated influencers by major retailers, enabling scalable, customizable campaigns that challenge conventional notions of authenticity. Finally, Monocle’s February 2025 article underscored the cognitive impact of digital transformation in retail, emphasising the importance of balancing technological efficiency with genuine human connection and creativity. Collectively, these developments illustrate how the oxymoron of tech and nostalgia is redefining retail marketing, customer engagement, and the very nature of authenticity in the industry.

The oxymoron of tech and nostalgia