“My name’s Lucy. I’m 17 years old and every Saturday afternoon, I visit the mall to go shopping.”
“I make the majority of my purchases at the mall for three reasons. The first is being able to hang out and share the social experience of what I’m buying, both in person with my friends and on my social media with those who aren’t there.
“The second is that I think walking into a store and paying for new stuff with my smartwatch is really cool. Besides, I can’t do much online shopping even if I wanted to – I don’t get enough of an allowance from my parents and I’m not old enough to get a credit card (yet!).
“And the third is that there’s no substitute for the real thing: seeing and trying things for real (especially important for clothes!), talking to the expert staff in-store about different choices, or even doing a stylish in-store experience that I can share on my Instagram afterwards.
“Although I don’t do much buying of stuff online, connecting with products and brands through social media is still a big factor in deciding what I buy. I like to be able to talk to vendors and find out more about a product, and sometimes their philosophy too, so I can make sure it’s the right thing for me.
“I also like to make the most of special offers and promotions that pop up on my Facebook feed. I don’t get a huge allowance so I have to get the best value for money I can. As much as staying loyal to my preferred brands would be nice, value has to come first.
“What I don’t like, though, is feeling like I’m being ‘sold to’ and advertised to in really active or aggressive ways. I want control of what I like and what I buy, and if I want advice on something, I’ll ask for it. I don’t want to be told what I should aspire to or what I should buy.”
The above is a fictional account of a hypothetical Generation Z shopper, based on the facts emerging about the huge group of consumers aged roughly between 13 and 21.
As the first generation to know only a digitally-connected world, their retail attitudes and habits dramatically differ from everyone that preceded them – even Millennials.
Now, Generation Zers’ sharp focus on connecting with retailers through social media platforms won’t come as a surprise to anybody. But some of the other stats comparing them to older generations reveal some traits that may be unexpected:
- During the upcoming American holiday season – the most important time of year for US retailers – 45 per cent of Gen Zers are expected to shop in-store rather than online, more than any other generation.
- Younger Gen Zers (those aged between 13 and 16) are 56 per cent more likely to pay in store with smartphones than consumers aged 17 and over. This figure rises to 63 per cent for payment with wearable devices like smartwatches.
- Shopping malls are three times more popular with younger Gen Zers than outlet stores or downtown stores, with 60 per cent choosing malls for their festive shopping.
- Over three-quarters of Gen Zers say special offers and discounts influence their purchases, while less than half cite loyalty schemes in the same way.
What this all points to is that while Millennials tend to embrace the capabilities of online retail as a primary shopping source, Generation Zers put a far greater emphasis on the experience of shopping. That includes interacting with brands, enjoying in-store innovations and, perhaps most importantly, showing off their fun times and shiny new purchases to the world on social media.
These new trends, combined with the sheer purchase power of such a large generational group, are changing the way every retailer runs its operations. Whether it’s in-store customer experiences or marketing communications, retailers are having to reassess and redefine their entire technological blueprint.
That’s no easy task. And it’s where you, as a service provider, independent software vendor or system integrator, come in: helping retail clients that are keen to maximise revenue from Gen Z shape strategies and journeys that best connect with younger customers.
Alongside more client-specific tactics, there are three general tech-driven deliverables you can bring to your retailers’ parties:
- Support retailers in their quest to deliver omnichannel experiences: co-ordinated operations that blend the online and in-store worlds. For example, shoppers that find clothes they like in a social media ad can bookmark their findings, which can then be picked up by a helpful in-store staff member when the customer comes in later to try them on.
- This reactive omnichannel approach can be taken a step further and made proactive thanks to deep analytics and machine learning. These tools can assess individual customer behaviour across all physical and digital touchpoints, and then go on to suggest particular items that the customer might like. Those items can then be included in personalised marketing campaigns on social media, making sure the customer doesn’t feel ‘pushed’ into buying them.
- Making sure a retailer’s online footprint is mobile-friendly is crucial. Although Gen Zers are unlikely to buy online, they’ll certainly use retailers’ websites to browse items they’ve clicked through on from social media. Seamless integration between different platforms is important to make customers feel that the brand they’re looking at is quality, trustworthy and secure.
Get these right, adapt accordingly, continue to evaluate the generational trends and your retail clients will be best-placed for major gains compared to other Gen Z-focused retailers and brands. And more importantly for you, it’ll put your offering at the very forefront of the next generation of retail.
Find out how you can help your retail clients connect with Generation Z in partnership with IBM: