Generation Z — those born between 1995 and present — may be the youngest generation, but their shopping habits are leading the future of retail.
By 2020, researchers estimate that Generation Z will make up about 40% of the consumer market. What’s more, they also influence the buying habits of other generations, such as their parents. And as Gen Z ages and enters the workforce, their consumer behaviour will be even more vital to the retail economy.
To attract Gen Z buyers, you need to understand them. They shouldn’t be thought of as Millennials 2.0. We’ve compiled some must-know Generation Z shopping habits to help you target this rising market.
Here’s what you need to know to be successful:
Despite being online more, they prefer shopping in-store.
Generation Z is less likely than millennials and Generation X to shop online, according to a survey from The NPD Group. In fact, according to a survey by A.T. Kearney, 81% of Gen Z prefers to shop in physical stores.
Why in-store? Many prefer the experience of shopping with others. For example, they like to use shopping malls as a spot to hang out with friends and grab a bite to eat. (This is one reason why Gen Z might be reviving the shopping mall.) More than half say shopping in stores allows them to unplug from social media and the digital world.
When it comes to online habits, Gen Z-ers use their mobile/smartphone most frequently and spend the majority of their free time online. Yet only 17% use these devices to shop and browse. Most use them to text and chat, access entertainment, and play games. About half use their phones to research products, compare prices, and look for deals, but they prefer to make purchases in-store.
Money matters for Generation Z.
The majority of Gen Z shoppers don’t have credit cards or as many funds as older demographics.
They also spend the least of all generations. The majority of Generation Z receive their money through an allowance. Some earn it through part-time jobs or by making money online.
According to a Business Insider survey, when deciding where to shop, the primary Gen Z motivator is the price. They are thrifty and most don’t want to pay full price for anything.
Yet, they are willing to pay more for higher-quality items. They are environmentally aware and care about products that will last longer. Their propensity for low costs and high quality is fueling trends, such as rentals and reselling.
They have different product preferences.
According to the A.T. Kearney survey, 73% of Gen Z likes to discover new products in stores.
Gen Z-ers are still forming their opinions on brands. They are less likely to be loyal to any one brand or store.
They tend to be more focused on health and wellness, particularly mental health, and as such purchase more of these types of products than other generations.
They also feel a pressure to always have new clothes because of social media — again, at a low cost and high quality, leading to trends like clothing rentals, thrift shopping, and reselling items online. Being unique is a defining trait of this generation. They don’t want the same items as everyone else.
According to the National Retail Federation, they are most likely to buy entertainment purchases, like apps, books, music, toys, and games. They want very few products to ever be out of stock. If given the opportunity, most would like to submit ideas for product design. 54% would like tools that let them try out/on products in-store, and 48% would like tools that let them customize products for themselves.
Brand interaction: trust is key.
Generation Z values transparency and authenticity. Brands that have been more resistant to change, like Victoria’s Secret, have suffered, whereas those that have embraced it, like Aerie, have experienced huge growth. They tend to trust the brands they grew up with but are open to new experiences.
According to the National Retail Federation, 56% of Generation Z wants the in-store experience to be fun so they won’t get bored.
In terms of data security, they are much more private (many Gen Z-ers don’t have public social media profiles). They are willing to share data about their purchase history, but wary about location, payment information, and personal details.
They are also less likely to share reviews online. More are likely to share photos and videos and comment on friends’ posts.
Putting insights into action
As Gen Z emerges in the Canadian retail industry, think about their habits in your marketing, product displays, price points, and more. Out-of-the-box thinking (like providing clothing rentals vs. selling it), committing to sustainable initiatives and social responsibility, and promoting fun in-store experiences with socialization opportunities can help bring Gen Z to you.
Storesupport Canada helps manufacturers and retailers optimize the customer experience to reach shoppers of all demographics. Connect with Generation Z, millennials, and more. Contact us today to learn about our solutions. Call 1-877-421-5081 or visit www.storesupport.ca.« Back to Blog