As everyone working in the retail sector knows, digital is having a huge impact – yet we are really only at the tip of the iceberg in terms of how it affects and influences us. The seismic shift is likely to come when Generation Z start to access the spending power that allows them to become the new generation of shoppers. They are the generation that has digital in their DNA, which means they will be better able to see the opportunities for digital in retail, and to embrace the digital solutions retailers and brands have to offer them.
We are seeing signs of their potential already: 68% of Generation Z use their smartphones to shop vs 27% of the adult population. What’s holding them back as shoppers is their disposable income – aged 15-24 years many of them are still studying so their spending power is limited. When they move into gainful employment that is all set to change, and woe-betide any retailers or brands not ready to appeal to them when they do start spending.
This is the first generation to grow up in a truly connected world. For this generation social media isn’t just about communication, it’s also about inspiration. Social media delivers continual access to ideas and stimulation and Gen Z have grown up in a world crammed with stimulus: they flick between multiple screens, constantly have their smartphone to hand, or keep their earphone in place to get an ever present sound track for life. It’s critical then to recognise social media as a powerful means of validating choices and building shopper confidence, whether through peer to peer recommendation or other forms of advocacy.
Making the most of digital tools, whether social media or m-commerce, Gen Z shoppers don’t need to buy blind. They may be impulsive at times but they don’t need to take uncalculated risks – they have too much information at their fingertips!
For example our latest research found:
• 39% of Gen Z shoppers use their smartphones to research their purchases – checking the options; product info; advice; and reviews – vs 29% of other shoppers.
• 52% Gen Z shoppers use their smartphones to consider their purchase decisions – checking prices, discounts, and availability – vs 45% of other shoppers.
Perhaps the most striking thing about this new generation is their confidence. Social media provides them with a great support system which helps them to manage risk when they’re choosing what to do and what to buy – and they are more likely than older shoppers to be connecting beyond their social groups of family and friends or even like-minded groups, to retailers or brands.
Gone are the days of the old stereotypes of sulky, uncommunicative Kevin-The-Teenager characters. Instead we are seeing a captivating cohort, complex and cynical, confident and communicative and surprisingly worldly. Gen Z can be a difficult bunch to market to, but those difficulties have to be surmounted because they are the high spenders of the future. They are still easily bored which means capturing and holding their interest for any length of time can be a challenge and they can still be self-centred, so attempts to gain their custom must pass the ‘what’s in it for me’ test.
This socially savvy generation are also empowered by knowing that we’re all interested in them! 1 in 5 Gen Z shoppers feel that retailers don’t think their age group is important, compared with nearly 1 in 3 of the general shopping population. And half of them believe that retailers and brands understand their age group, compared with just a third of the rest of us. This demonstrates a recognition of their attractiveness as a prime target for retailers and brands and worth getting to know. This apparent self-assurance is important because it will set a high bar against which retailers and brands will be judged.
Those of us with Gen Z children know how screen focused they are and they’re very comfortable with online shopping. They seem quite satisfied that online shopping doesn’t need to be made any easier or quicker, and aren’t concerned about payment security in the way other age groups are. As a group they are more impulsive and willing to take risks with an order, knowing they can easily send anything back that they don’t like: 44% of Gen Z agree “I often buy things on the internet I hadn’t planned to buy vs 32% older shoppers and 28% of them agree that they buy lots of things online knowing they’re going to send most back compared with 10% of older shoppers.
Of course this is great for securing sales online, but getting a product in the basket is only half the story for the Gen Z shopper who is so comfortable with online returns. Speedy fulfilment of the order and products that don’t disappoint on arrival are also crucial to ensure that items don’t end up back where they started. This is a generation used to instant gratification – so speedy delivery is more important to them than to older shoppers. A click for them needs to be swiftly followed by a parcel at the door, or the moment may well have passed.
Such a dynamic and confident generation presents such a shift in mind-set that they are going to make a difference – retailers and brands need to be at the ready.
Danielle Pinnington is MD of ShoppercentricImage credits: