UNDERSTANDING RETAIL THROUGH THE LENS OF GEN Z CONSUMERS
For the past decade or so, many brands have been faced with the challenge of managing their own digital transformation, while simultaneously scrambling to serve the needs of an increasingly digital savvy, growing millennial audience – generally accepted as the first internet-fixated generation.
After two decades, however, the millennial generation is beginning to slip into the annals of retail, a thing of the past, set to be replaced as the generation that preceded it. Today, brands are bracing themselves for the next wave of shopper-led disruption in the form of the 11-24 age group, known colloquially as ‘Gen Z’ or ‘Zoomers’.
Perhaps a more fitting epithet for Gen Z, would be ‘Generation Omnichannel’ as this is the first truly omnichannel generation to high highstreets & social media platforms. This group of consumers are prepared to shop wherever best suits them in the moment and without preference as to the vehicle they use to find what they want.
According to a recent article in Vogue, Gen Z are 56 percent more likely to have shopped for fashion in-store over the last three months and 38 percent more likely to have shopped online in the same timeframe. They are willing to shop across channels, have an appetite for higher-quality items & are eager to stay on top of cultural trends.
This awareness of cultural trends is leading to some key generational spending markers. Not least the fact that Zoomers are more conscious about the planet & the future: they believe that the generations before them represented overconsumption, capitalism & materialism, meaning they are more likely to associate themselves (& their wallets) with brands that match their own core values.
At the same time, Generation Z has been called the most critical consumer group until now, with a fundamentally different view of shopping and consumption than previous generations. They are the latest to enter the workforce & have strong purchasing power, meaning brands have to earn their place in the wallets of Gen Z consumers.
Furthermore, Gen Z’s frequency of shopping for new items is being disrupted by the second-hand, preloved, vintage market – a market that Gen Z are 27 per cent more likely to shop. Preloved & vintage platforms, such as Depop & Vinted, are arguably slowing the cycle of new purchases, redefining the concept of what it really means to be ‘new’.
EMBRACING NEW FORMS OF PAYMENTS
According to PayPal, 22 percent of Zoomers have used buy-now, pay-later (BNPL) solutions like Klarna & Afterpay since the start of the pandemic to buy more expensive, higher-quality products.
Since the beginning of the pandemic, 123 percent more Zoomers have used BNPL than previously, representing the strongest uptake of any generation & in April 2021, 33 percent of Gen Z respondents said they are likely to use BNPL solutions in the future too.
Furthermore, Gen Z has continued to embrace mobile payment options such as mobile apps & e-wallets like Apple & Android Pay faster than any other consumer spending group too.
This expectation to be able to pay how, when & with what device or platform is something that permeates Gen Z spending habits, meaning traditional payment & point of sale technologies need to keep up.
A WINDOW INTO THE FUTURE
The pandemic has certainly cemented the position of ecommerce in the consumer psyche, regardless of age. If we glance into the future, beyond the Gen Z age group, Generation Alpha & subsequent cohorts will likely prove to be even more digitally savvy, thus the cycle of retail reinvention will have to start anew.
The key to success for brands confronted by this continual cycle is to be agile & nimble enough to not only introduce different digital & social commerce options, but to crucially support these offerings with the true omnichannel capabilities needed to deliver on the exacting needs & expectations of future generational economic powerhouses.
Gen Z is the emerging cultural & economic power in today’s retail landscape & it will continue to drive cultural change, retail spending habits & so much more, on so many fronts over the next two decades.
While the pounds & dollars are yet to hit their wallets, the race to meet the future expectations of Gen Z consumers is already underway. The success of brands over the next two decades will not only be predicated on understanding what, how & from who Zoomers are likely to buy, but also on their ability to execute frictionless omnichannel & in-store experiences as well.