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How Gen-Z shoppers are changing the world of Retail

JULY, 2022

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Gen Z is the emerging cultural and economic powerhouse in today’s retail landscape and it will continue to fuel cultural change and retail spending habits on so many levels over the next two decades.

Okay, time for Plan Z.

Retailers constantly face challenges of understanding and adapting to dynamic consumer shopping trends; and as if the post-pandemic transition wasn’t challenging enough, when it comes to understanding the retail sales expectations of Generation Z, it can be a tricky demographic to appeal to.

However, understanding this younger generation of digital natives is crucial to attracting their business and retaining their loyalty.

It’s impossible for retailers to ignore the significant buying power of Gen-Z. They are considered to be both the most impulsive and meticulous shoppers when it comes to searching for quality and value for money.

Conflicting reports evidently suggest that meeting Gen-Zers’ wants and needs in retail is no straightforward task. Although, they are irrefutably the first generation of omnichannel shoppers, purchasing across physical, digital and social media platforms in equal measure.

Clarity is key; let’s take a look at how brands can win the Gen Z population over in a changing world of retail.

Embrace Omnichannel

As we alluded to earlier, this younger generation are digital natives who are well versed in shopping across digital, physical and social markets.

The key to success for brands confronted by this continual sequence of progressiveness is to be agile and nimble enough to not only introduce different digital and in-store commerce options but have the capabilities to support these with the native omnichannel capabilities needed to deliver against the demanding expectations of these new generational groups.

According to Arsen Avakian, 81% of Gen-Zers still enjoy shopping in-store.

When they hit brick-and-mortar retail, 86% of these young shoppers are after special promotions, free samples, and giveaways, and 43% also want discounts, which are an essential factor in their purchasing decisions. Over two-thirds are more inclined to shop at physical stores with technology-enhanced shopping experiences and tech that lessens their time waiting in line.
Arsen Avakian
Interview with FORBES

They also dislike searching for products and want digital innovations that can streamline the process.

While the majority of Gen Z shoppers—by some counts up to 80% —use Instagram or other social media for product discovery, about two-thirds prefer shopping at brick-and-mortar stores when trying out new things.

This highlights the importance of providing Gen Z shoppers with unique in-store experiences, tailored around relevant cultural trends while shopping.

  • Introduce QR codes throughout physical stores to encourage interactivity with engaging content or personalised discounts.

  • Provide exemplary customer service across all sale channels that emphasises speed and simplicity.

  • Augmented and Virtual Reality devices aren’t commonplace…yet. But it is far more accessible. Integrate where you can as long as it’s fun, practical and engaging, not just a cheap gimmick.

Sustainability & Ethical Values Matter

Retailers must recognise the growing significance of having an ethical and eco-friendly brand image; values such as sustainability, gender equity, environmentally-friendly products & processes are paramount to Gen Z and heavily influence their purchasing choices. There is an expectation for retailers to create content and support values which reflect their take on the environment and social justice.

A study conducted by Depop x Bain & Company, found that 90% of Gen Z consumers said they had made changes to be more sustainable in their daily lives, with eco-friendly fashion practices (including ReCommerce) playing a critical role.

60% are attracted to brands who speak about reducing their carbon footprint, while 45% are influenced by eco-friendly materials. Additionally, 70% are concerned by commitments to fair wages, while 60% want to know a brand’s commitment to diversity and inclusion.
Depop x Bain & Company

Ethical labour practices are absolutely paramount to uphold, with fast-fashion brands now under immense scrutiny (and rightly so) following numerous public backlashes.

Shein flagrantly broke local labour laws by imposing 75-hour weeks, whilst Boohoo were accused of 'modern slavery' after it was discovered that its Leicester factory employees were receiving a paltry £3.50 an hour.

Such was the backlash against Shein, they have since launched a new $10 million sustainability and social impact 'Shein Cares Fund', committing to "support global non-profit organisations focused on empowering entrepreneurs, supporting underserved communities, ensuring animal health and welfare, and promoting recycling and the circular economy.”

81% of Gen Z shoppers say these topics are important when choosing where to shop.

Two-thirds of younger shoppers (aged 16 to 24) wouldn’t continue shopping with their favourite brand due to concerns of business ethics and eco-friendliness. Those between the ages of 25 and 34 said they would defect to a competitive seller upon finding out that a brand didn’t meet their standards in terms of sustainability. 51% of retailers stated that sustainability has become more important in the business world and 49% said the same applied to ethical standards.
Barclays x Censuswide
Based on 2,000 UK consumers & 300 UK-based retailers.

Barclay's report also revealed that 21% of UK-based retailers had severed ties with suppliers that didn’t meet stringent ethical and sustainable standards.

Retailers must continue to monitor and improve their ethical and sustainability standards if they are to appeal strongly to the younger demographic of Gen Z and Alpha.

Get Sociali-Zing with Instagram & Tik Tok

When it comes to targeting Generation Z on social commerce, the big hitters that continue to entertain and influence younger demographics are Instagram and TikTok.

For brands setting up shop on Instagram is to add ease to the shopping process, as social commerce is an important part of the omnichannel hybrid-retail experience that Gen Z revel in.

TikTok cemented itself as a valuable eCommerce and marketing platform, with the #TikTokMadeMeBuyIt trend gaining 5.4 billion views on the platform. It's ability to blend entertainment with interactive shopping experiences is something traditional eCommerce & physical retail stores need to incorporate in order to evolve.

Retailers should innovate and experiment with experiences that attract shoppers to explore instore, engage with products/services, and ultimately, give them a reason to stick around. Try implementing UHD videos & images, live-streaming events, and provide gamified experiences instore.

Despite the failure of the platform's 'TikTok Shop' in the UK, retailers should seize the opportunity that social commerce presents to influence product awareness. 97 percent of Gen Z consumers use social media as their #1 source of shopping inspiration.

To maximise social commerce's potential, retailers need to review the features and consumer base of each social shopping platforms, identify relevant partners, but most importantly, create tailored content to drive engagement and traffic.

Addressing gender norms and language

When it comes to Gen Z, inclusivity is essential, but so too is authenticity.

Gen Z’s views on gender are far more fluid than their predecessors. They believe traditional gender roles and labels related to the gender binary are outdated and these values are reflected in their shopping habits.

79% of Gen Z have no qualms or hesitations about buying clothes marketed to the opposite gender, while 23% believe that traditional gender-focused language used by retailers is not only old-fashioned, but outdated and offensive.
UNiDAYS
Study.

A further 56% don't actively follow fashion trends, but the majority favour clothes that make them feel confident, with 87% stating they feel their best in the “right” clothes.

Embracing individualism and authenticity is expressed in their look, and they shop with the expectation that brands will reflect those values.

The challenge for retailers is that they must weigh up this new approach to gender fluidity for the new generation of shoppers, taking into account that older generations have been pre-conditioned to define themselves in one group or the other.

Imagining a socially aware Gen Z shopper perusing through rails of both male and female clothes, easy right? But it’s harder to imagine a baby-boomer doing the same. Retailers are now tasked with managing multiple groups and composing subsequent approaches to this issue.

Comprehending gender norms and managing your business endeavours with this knowledge will open new possibilities for not only your customers, but employees too. A new gender reality has been unfolding and expanding rapidly, and retailers have a unique opportunity to take the reins and grow rather than follow the leader. 

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Bricks & Mortar Stores vs. Online Retail: How to combine online and offline experiences to improve shopping for your customers

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