Generation Z are the next up-and-coming group of shoppers who retailers are turning to for the future of retail.
Yes, those born between 1994 and 2002 are starting to push millennials over in terms of shaping commerce and eCommerce trends.
Get ready, retailers.
The buying power of Gen Z comes out to $44 billion, according to an IBM and National Retail Federation study. Known as the first truly “digital native” generation, Gen Z’ers have grown up with the Internet and tech gadgets not far from reach at any given time. From iPads to desktops and smartphones, it seems that interacting with technology has become intuitive for this generation.
By the year 2020, Gen Z will make up 40 percent of the entire United States population, according to retail consulting firm HRC Retail Advisory. It also found that while 50 percent of this group makes online purchases, 60 percent visit malls once a month with the intention of buying an item.
NRF’s President and CEO Matthew Shay commented on how Gen Z is already affecting the retail industry. “Just as millennials overtook Gen X, there’s another big buying group retailers need to plan for, and it’s even larger: Generation Z,” Shay said. “They appreciate the hands-on experience of shopping in a store. With technology constantly evolving but some shopping habits remaining the same, retailers need to be agile enough to serve both needs. Retailers are constantly focused on experimenting with new innovations both online and in-store to remain relevant to evolving consumer demand.”
This falls in line with what we’ve been seeing over the last few years. As more retailers have shifted their focuses, due to eCommerce influence, in-store tech additions have started to pop up to enhance the shopping experience. IBM and NRF’s study also showed that Gen Z is interested in engaging with brands online, which strengthens retailers’ current use of chatbots on Facebook’s Messenger platform as a means of connecting for the customer service experience.
In one of Accenture’s recent studies, it further compounded Gen Z’s interest in online commerce interests. Its research showed that 69 percent of Gen Zers are interested in making purchases trough social media. Given some retailers’ foray into accepting payments over the Facebook Messenger platform, it may be safe to say that this desire may soon become a reality across other social media channels.
What adds a layer of interest into Gen Z purchasing behavior is the fact that most of their parents are influenced by their opinions. According to an InfoScout poll conducted for NRF, 67 percent of adults gather Gen Z input before making a purchase, and 59 percent won’t even attempt to buy that item unless their kid approves. These findings also showed that parents of Gen Zers tend to spend $6 more per shopping trip when everyone is out together.
Given the amount of buying power Gen Z has for itself alone, along with the influence of their parent’s generation, it may be safe to say that it may be one of the more powerful groups for retail to zone in on. While Gen Z is focused on shopping in-store and on social media, the effect that this group is having on the rest of the retail industry is evident by their influence on their parents (some of which are millennials and Gen Xers).
In buyer news this week, Alliance Data put out survey results on the generational differences when it comes to the path to purchase. One of the more interesting findings was that across all generations, customer service was ranked No. 1 in priorities.