Gen Z has come to the fore in the pandemic, driving much of the change across retail that has been seen in recent months. In fact, what Gen Z does today, the rest of us do tomorrow. With that in mind, we take a look at the latest research into how this segment of shoppers is behaving.
Gen Z is quickly becoming one of the world’s most powerful consumer segments - as one of the youngest generations, Gen Z amounts to a third of the world’s population and controls an estimated spending power of $143 billion annually.
With 98% of Gen Z owning a smartphone, on average receiving their first at the age of ten, it’s clear that businesses looking to reach this demographic need to meet them on their mobile devices.
“Gen Z has never known a world without their smartphone. They see the world through this mobile first lens,” said Ted Krantz, CEO, App Annie, which analysed Gen Z behaviour in its report How to Build a Winning Gen Z Strategy on Mobile. “As new consumers, businesses have an opportunity to earn their loyalty.”
Skye Featherstone, Product Marketing Manager, Snap, Inc adds: "Leveraging data to understand how to best reach consumers on mobile is more critical than ever, and Gen Z’s importance for marketers will only increase in 2021 and beyond. Businesses need to understand the values and user preferences of this audience to create truly engaging experiences on innovative platforms like Snapchat."
According to App Annie’s analysis, Gen Z have some particular habits that have evolved rapidly over the lockdown and offer a taste of where retail in general is going to be heading through 2020 and 2021. It found the following:
With the above in mind, retailers need to think about how they target their customers. However, there may be more to Gen Z than meets the eye.
According to a from Iterable, which surveyed 1,000 US consumers, Gen Z are least likely to complete all their shopping online and most likely to report that given the opportunity, they would complete most shopping in-stores – suggesting that the value of having a brick-and-mortar presence is likely still worth the investment, even as many brands (such as Rent the Runway and Microsoft) shutter stores permanently.
Even if COVID-19 weren’t a factor, Gen Z is split on their preference for in-store shopping (36%) vs online shopping (35%).
And how they shop online is also not what you’d expect. According to new research by global commerce agency 5874 Commerce, 67% of Gen Z consumers shop from both male and female sections of online fashion stores, with a quarter always doing so.
The survey of 2,003 UK respondents, revealed Gen Z is also more likely (41%) to return to an online store if the brand shows their body type size in model photos compared to millennials (33%).
A third of Gen-Zs would choose to shop at a brand because of its inclusive representation of body types. Even more so, 44% of millennials would be inclined to shop with these brands in the future.
In-keeping with stereotypes of Gen Z being more purpose focused than earlier generations, they are the group most likely to believe eCommerce is important in providing equal access to men and women in establishing successful small businesses, at 64%.
When the conversation moves to priorities in purchasing decisions however, this pattern wobbles a bit. While 28% believe that sustainability should be a priority for retailers, the price of products topped the list at 35% of respondents. This is perhaps unsurprising with 16-24 year old’s also having the lowest incomes, but is an important take on what will influence buying behaviour at the tills.
According to a separate study into online shopping habits by Acquia, those in the next age group up from Gen Z – the 24 to 34 year old bracket, are also shifting their shopping habits rapidly, compounding what is being seen in the Gen Z cohort and suggesting that retail is indeed shifting along all age group lines. It finds that: