Consumer behavior changes with societal trends and as new generations enter the shopping stratosphere.
The generation currently entering the workforce and coming of age is Gen-Z shoppers. Like every generation, the younger one has different preferences from those before them.
Understanding what Gen-Z shoppers want gives you an age with the demographic. Businesses that want to excel in the future must adapt to meet the demands of younger shoppers while still considering other generations.
1. Buying Power
Approximately 58% of Gen-Z will be adults in 2023. They make up a large portion of the buying base, nearly equal to baby boomers. For comparison, 21% of the total population are baby boomers, 19% are Gen-X, 22% are millennials and 20% are Gen-Z.
The group has strength in numbers. Depending on what you sell, you should create buyer personas and try adding them to the customers you serve. Dig into what members of the group want.
2. Environmental Concerns
The younger population knows how their actions impact the environment and carefully plans what they consume. They want to ensure the Earth remains sustainable for the generations after them.
Gen-Z is at an age where they are starting to have children or thinking about future children, and they want to create an Earth worth living on. They will spend a little more to find brands that agree with their philosophies.
3. Shopping Habits
Gen-Z is the first generation to grow up in an age where they have always had current technology such as cell phones. They are tech savvy, so many marketers assume they love to shop online. In reality, they like to shop in person, where they can view and interact with products. Because they enjoy brick-and-mortar stores, companies should create an experience for them.
This generation takes part in something experts call “reverse showrooming.” They research a brand, read reviews and do some of their pre-shopping online before heading to the store to interact with the item.
4. Social Credentials
Shoppers just coming of age buy for different reasons. They want to try items, and unveil their thoughts and tips on social media. They grew up with live videos and reviews, and want to be part of the larger shopping community.
Retailers should find ways to help them tap into online trends, such as sharing a photo of them using the product with a particular hashtag in the description. Look for ways to engage them on social media to keep them loyal to your brand.
5. Digital Advertising
Gen-Z loves discovering new products, and often do so via TikTok or other social media channels. They do not mind digital ads as long as they are personalized to their needs. Digital ad spending is a $626.86 billion market and will increase to $835.82 billion by 2026. Some of the increase is due to Gen-Zers coming of age.
Unlike other generations, they are more likely to listen to the familiar faces of celebrities. They know who to trust and who is just trying to sell them something. The younger generation cares deeply about authenticity. They try to be open and expect nothing less from the companies they buy from.
6. Unique Items
Another difference between the current youngest shopping generation and others is they care more about finding something unusual than the name brand on it. They are much more open to new brands and giving young companies a chance to impress them.
However, they also tend to be less loyal to brand names. While they do not mind paying more for something they really like, they also will not pay more just for a logo. Perhaps the struggles of the economy in a COVID and post-pandemic world impacted their views on finances, but they are much less likely to drop big bucks just for a name.
One way the generation is similar to others is that they enjoy a good story. What differentiates them is they want a story with a distinct purpose. They want to know how a brand might change the world for the better, adopt a social cause or even improve their product for the consumer.
Companies must dig deep into why shoppers are interested in buying their product. Figure out the pain points driving them to your brand and create a story to showcase how the item solves their problem.
8. Pay Upfront
Although buy-now, pay-later models are available at many retailers, younger shoppers seem unlikely to utilize the service. Perhaps they saw the debt problems of their Gen-X parents or were warned to be careful of taking out too much credit.
Whatever the cause, most prefer to pay for an item upfront, even if they have to delay a purchase. While stores should offer the option, it might be wise to create scenarios where you provide a slight discount for cash payments.
Gen-Z Shoppers Are Aware of a Shifting Retail Landscape
Rather than going with the flow, Gen-Z is bold, determined and marches to the beat of their own drum. They delay purchases, buy what they love and apologize for nothing. The best way to get to know them is to study their buying habits and listen to what they care about.
Because they are quite different from generations before, conducting a lot of marketing research is crucial. When things are not working, try something new. Because they are authentic and upfront, ask them what you can do to gain and keep their business. The answer might surprise you.
Frequently Asked Questions
What is the buying power of Gen-Z?
Gen-Z makes up nearly 20% of the total population and is coming of age, thus increasing their buying power significantly. The importance of considering this group's preferences in a business model cannot be understated.
What are Gen-Z's environmental concerns?
Gen-Z is more environmentally conscious than previous generations, and their buying decisions are often influenced by a company's sustainability policies and actions. They are willing to spend more on brands that align with their environmental values.
What are the shopping habits of Gen-Z?
Contrary to the belief that Gen-Z shops primarily online, they enjoy shopping in physical stores to interact with products. They often conduct online research and read reviews before making in-store purchases, a behavior known as “reverse showrooming”.
How do Gen-Z shoppers use social media in their purchasing decisions?
Gen-Z shoppers use social media to discover new products, share their experiences, and engage with brands. Businesses can leverage this by encouraging social media interactions and creating online trends.
How effective is digital advertising for Gen-Z shoppers?
Gen-Z shoppers are receptive to digital ads, particularly when they are personalized. They appreciate authenticity in advertising and are more likely to be influenced by familiar and trusted faces.
Does Gen-Z care about brand names?
While Gen-Z is open to new brands and unique products, they tend not to be loyal to brand names. They prioritize the value of a product over the prestige of a logo and are less likely to pay more just for a brand name.
What is the importance of storytelling for Gen-Z shoppers?
Storytelling resonates with Gen-Z, but they prefer stories with a clear purpose or cause. Brands that can articulate how they are making a difference in the world or solving a customer problem can appeal to this generation.
Do Gen-Z shoppers prefer buy-now, pay-later models?
Generally, Gen-Z shoppers prefer to pay for items upfront, avoiding credit or debt. Offering incentives for full, upfront payments may be beneficial for retailers targeting this demographic.
How does Gen-Z view the retail landscape?
Gen-Z is aware of the shifts in the retail landscape and has shown a willingness to disrupt traditional consumer trends. They value authenticity, openness, and are not afraid to delay purchases for items they genuinely value.
What research methods are effective for understanding Gen-Z consumer behavior?
To understand Gen-Z consumer behavior, extensive marketing research is crucial. Engaging them directly to solicit feedback and suggestions can provide valuable insights as they are typically authentic and upfront in their responses.