The latest generation of consumers
is prompting retailers to re-frame their thinking about the customer experience today compared to what it was just
a decade ago.
Technology is changing the way we shop, thanks to the knowledge, habits and expectations of the generation we
know as Millennials – they’ve driven big changes to business worldwide.
But Millennials are no longer the youngest generation of consumers. The next generation, known as Generation Z,
is coming up quickly on the heels of Millennials, and these consumers have already begun to bring even bigger
changes – and challenges – to retailers. Millennials made an enormous splash when they became independent
consumers, and Gen Z-ers – the first ‘digital natives’ – are disrupting the world of retail now.
Gen Z-ers (born between the mid-90s to mid-2000s) are 26% – 32% of today’s population, the largest single
segment, and they don’t remember life before mobile phones, social media or the Internet. This tech-savvy culture
means that these shoppers have no patience for any retail/marketing trickery, and it’s very important for retailers
to remember this; unlike previous generations of kids whose retail preferences were not heard or heeded, 93%
of parents of Gen Z-ers say they actively influence family purchasing decisions. They also make said decisions with
heavy influence of social media platforms; with their mobile devices at the ready, this global population of
2 – 2.5 billion (and 70 million in the U.S.) hold up to $143 billion in buying power.
Because of the significant influence Gen Z has as shoppers—even the youngest among them–retailers are beginning
to realize the generation’s disruptive impact before other business sectors.
What Retailers Should Know About Generation Z
The majority (77%) of Gen Z-ers prefer to shop
in brick-and-mortar stores. Creating the right in-store experience is crucial. From offering personalized customer service
to ensuring items are in stock, retailers can make a positive impression on this desired demographic—because they may not
get a second chance. That said, astute retailers unify their physical stores with the online world. Deeper data mining
allows brands to use factors such as social influence and digital behavior to cater to the consumer.
Gen Z shoppers expect a seamless digital-to-physical experience. This generation relies heavily on mobile devices and
expects fast-loading websites and an omnichannel experience. If they research an item online, then go to the store to see
the item, they want that integration to be seamless and cohesive.
Gen Z-ers consider value over cost. Unlike the millennials before them, Gen Z-ers are careful with their funds. They’ll support
brands they believe in, but not to the detriment of their future. Watching their parents struggle through the recession has
made this generation wary of credit and debt, less prone to taking it on. Previous generations had a “buy now, pay later”
attitude – a concept that arguably caused the recession, so Gen Z is, thankfully, showing signs that they’ve learned from
the mistakes of their parents.
“Data is at the forefront of everything, and the customer is the center of everything.”
– Janet Sherlock, Ralph Lauren CIO
Information collected through foot traffic-monitoring
technology can be instrumental in giving retailers better insights to optimize store layouts to enable the consumer to find
what they are looking for. In addition to providing more detailed customer profiles, collected data allows retailers to more
deeply understand how consumers shop in the store, including what products and displays catch their eye and what they eschew.
Important: Although retailers use customer data for the benefits it can help provide to said customer, the retailer must be
transparent about the collection, disclosing the benefits it will provide customers (convenience, time savings, customized
recommendations, etc.) as well as what the retailer gets out of it.
These days, the collective expectation is that the shopping experience will be similar to social media interactions – tailored
and instantly attainable. To make the most of the eight-second attention span of the average Gen Z-er, retailers must embrace
and leverage the technology that is increasingly available and always evolving.