Gen Z is poised to drive dramatic change in the retail experience
Far from bringing the end of traditional retail, Gen Z—also known as iGen and Centennials—seem likely to drive a major shift in the way retailers do business. Deep personalization, immediate value, and brand mission will likely guide the future of brick-and-mortar shopping.
Gen Z, our newest generation, have attitudes and preferences about retail that set them apart from previous generations. Per CGK’s research, Gen Z’s fiscal practicality and digital dependency deeply inform their behaviors when it comes to shopping—both online and in retail outlets.
Retail leaders should pay urgent attention to how Gen Z approaches retail. Brands and stores that adapt to Gen Z’s unique perspective on shopping will have an immediate advantage in winning the business of this large, diverse, ready-to-spend generation of emerging consumers.
Gen Z crave value and enjoy hunting for bargains
Gen Z are very fiscally pragmatic and practical with their money. They are looking for value, as I described in a recent Business Insider article. They don’t want to pay full price for anything.
Jason notes that Gen Z hunts for value in two ways: buying from value brands or purchasing more expensive items that last longer and offer guaranties about the product’s durability. Growing up with Gen X parents who struggled through the economic recession of the last decade, Gen Z learned to make getting “good value” for their dollars a priority at a very young age.
Retailers can use this insight about Gen Z to compete with online outlets by offering value that internet-only retailers can’t provide. Gen Z often regard generous warranties and engaging in-store experiences as substantial value adds. Pivoting to these features will help traditional retailers overcome the pricing edge often enjoyed by online stores.
Digital dependency enables much deeper personalization with Gen Z
As digital dependents, Gen Z grew up with smartphones and social media. In fact, many of them have never known a time before social media or smartphones! Gen Z have come of age with unprecedented access to information about brands, prices, trends, and variety, and as a result brands have been trying to win their loyalty for years. However, given Gen Z’s relative youth—the oldest are now 24 years old—brands that use deep personalization in messaging for Gen Z can attract them at this critical time in their development and purchasing autonomy.
“Our research shows that 65% of Gen Z are on their phones after midnight—every night,” says CGK CEO Denise Villa. “They’re constantly absorbing real takes on brands, products, and prices. If a brand is overcharging, underdelivering, or otherwise presenting an image inconsistent with Gen Z’s daily reality, they’ll know.” While this raises the bar for some brands, it simply means creating more transparency and consistency for others.
Retailers can engage Gen Z and earn their trust by personalizing both products and the shopping experience. A new A.T. Kearney study reports that 81% of Gen Z respondents prefer to purchase in stores, 73% like to discover new products in stores, and 58% browse in-store selections to disconnect from social media and live in the moment.
Gen Z are expecting retailers to have more information about them and make better marketing decisions when trying to engage them (check out my Q&A video on Gen Z and retail). Retail leaders have an incredible opportunity to harness Gen Z shopping attitudes and tap directly into an emerging generation of consumers.
CGK is studying Gen Z’s development as consumers across four continents
At CGK, we closely study Gen Z as they grow their consumer spending and influence around the world. The industries and consumer areas we focus on include retail, payments, banking and financial services, restaurants, and technology. We will closely monitor how this generation evolves and uncover specific actions and strategies leaders can implement to win Gen Z as customers, brand advocates, and trendsetters.
Would you like specific strategies for creating a retail or brand engagement experience that attracts Gen Z consumers? Contact us here and we will gladly set up a call to see how we can be a resource for you. At CGK, we deliver customized Gen Z keynote presentations and research that enables leaders to understand and win this important generation of consumers.
Posted: December 5th, 2019
Categories: Gen Z | Marketing & Selling
Written by Jason Dorsey
Jason Dorsey is an acclaimed generations and behavioral researcher and speaker. He's received over 1,000 standing ovations for his unique keynote presentations. Jason has led over 120 research studies. Adweek calls him a "research guru." His mission is to deliver new insights and practical strategies that solve business challenges for leaders.
