Gen Z’s New Shopping Habits May Kill Off Unprepared Brands

For the past decade, brands have scrambled to serve millennials, the first internet-obsessed generation that forced retailers to rethink their online-selling strategies.

Now, brands are reinventing themselves for the next wave of shoppers – Gen Z, or ‘zoomers’, as they are also known. Aged between 13 and 21, zoomers are gearing up to enter the workforce and are fast becoming a formidable force in the economy.
Brightpearl’s own data of 4,000 shoppers reveals that Gen Z will not simply be an extension of the previous generation. They should not be thought of as Millennials 2.0. Experts predict Gen Z will fuel a massive shift in how people shop – and currently, retailers are woefully unprepared.

Disruption: Incoming

Zoomers are truly digitally native, and are increasingly turning to new ways of creating their own personal brand. New digital channels help Gen Zers to shape and build their own unique identity and create their own story (with social and livestream video playing a key role as discovery, community and purchase mechanisms). 

It’s hardly surprising, then, that Gen Z wants to shop in a variety of new ways – notably via Alexa, livestream and social media apps like Pinterest, Tik Tok and Instagram which combine entertainment and shopping. Brightpearl’s research makes this clearer than ever, revealing that almost 8 in 10 (77%) of young shoppers are now buying through new digital channels. According to Brightpearl’s study, three-quarters of 18-24s plan to shop via alternative channels this holiday season, and the same number want retailers to make non-traditional channels easier to shop through in future. Furthermore, two-thirds of 18 to 24-year-olds would prefer to shop with brands that support non-traditional channels, over those that don’t.

This data proves that a smooth transaction and quick delivery are no longer perks, as they might have been for older audiences  – they are the baseline expectation. Gen Z seeks a rewarding and enjoyable online shopping experience – one to rival, if not replace, the real thing. In our study, more than half of zoomers said that it was easier to interact with friends by shopping on digital channels where they already socialize and seek entertainment. This shouldn’t be a surprise, either.  Our world has become an intermeshed blend of the digital and physical, where young teens meet up on ‘Fortnite’ after school, music lovers watch virtual streamed concerts, and families use Zoom to catch up.

Gen Zers are not willing to compromise on experience. They want to be entertained and inspired when buying online. They want the new digital channels that they already use for fun to double-up as shopping platforms – and retailers must be ready, willing and able to meet them there. If retailers won’t – or can’t – embrace the latest ways to shop, they will be leaving money on the table. Because these changes aren’t a fad or a short-term trend. The Gen Z consumers who are used to engaging through an ever-increasing choice of social apps and digital services are going to keep growing in purchasing power. 48% of U.S. internet users in the 18-34 age range already made a purchase on social media last year. 

If we glance even further into the future, Generation Alpha and subsequent generations will be even more digitally savvy, and brands must be flexible and nimble enough to quickly introduce different digital and social commerce options  – and be able to swap these out as needed. 

Retailers Are ‘Swiping Left’ On Digital Trends

Despite the clear move towards new ways to shop, the majority of retailers are responding very slowly to these changes – some are rejecting them outright, others are woefully unprepared. Shockingly, a quarter of retailers still do not have options for shoppers to buy via social channels, including some of the largest brands. Very few businesses facilitate non-traditional ways of shopping like Instagram, Pinterest, voice and livestream, and many fail to grasp the urgent need for change. 

For many merchants, the monolithic platforms that underpin their operations, including ERPs, are the very things standing in their way of being able to flex and adapt rapidly to meet consumer expectations.  

Modern Tech For Modern Consumers

90s fashion may well be back in vogue, but relying on outdated technology is not a good look when it comes to meeting Gen Z expectations.

Monolithic architecture is notoriously inflexible and difficult to scale. In fact, leading brands across the US are now openly admitting that being locked into a service from an ERP vendor is holding them back. 

Our research highlights that a whopping 90% of US brands are concerned that a ‘single vendor’ ERP approach to e-commerce is ‘limiting their ability to quickly deploy better shopping experiences, keep up with customer expectations and sell more.

What’s more, 71% of US merchants agree that their current ERP makes it ‘nearly impossible to integrate new, better e-commerce technology from other vendors’ at the pace they would like. It’s a similar story in the UK, with half of all British firms saying the same thing. 

Gen Z-led digital disruption, combined with inflexible technology, is a recipe for disaster that could kill off unprepared brands. 

There’s no doubt adding and then managing new selling channels — while delivering a joined up and consistent experience  —  will be a challenge. But aging systems will make keeping up with the pace of change so much harder because they simply aren’t built to be agile. ERPs and monolithic architecture can take months – or even years – to integrate new channels – and, as a modern brand with modern consumers, you simply can’t afford to wait that long. You can be certain your competitors won’t.

Luckily, there’s a simpler option. Of course, adding new channels can unearth operational complexities but, with the right hyper-scalable operating system these can be minimized. You’ll need a system that offers complete visibility across all channels, as well as the flexibility to integrate, manage and upgrade channels and applications to meet consumer demand.

The truth is cookie-cutter strategies from a single vendor no longer work for merchants seeking to deliver the very best e-commerce experiences.

Brands that are able to manage an ever-changing roster of digital applications and new selling channels rapidly already have the advantage – outpacing competition by 80% in the speed of new feature implementation (according to Garnter research), and putting them in pole position to win big. 

For those who are willing – and able – to grasp the opportunities that the emergence of new digital channels brings,  there’s perhaps never been a more exciting time to be in business. Merchants that act now can become trailblazers – and leave their competition in the dust. 

Contributed by Mark Hook, Global Director of Brand, Communications and PR at Brightpearl, a retail-tailored operating system for omnichannel merchants. Brightpearl is the number one Retail Operating System (ROS) for the retail and wholesale sector. Brightpearl automates back end operations, from sales and inventory management to CRM and logistics, so that merchants can focus on growing fearlessly.  Brightpearl has published its new data as part of a report on the trends driving buying behaviors this Black Friday and Christmas. The UK version can be found here, and the US edition here.