New York, NY—Retailers looking to capture the discretionary income from the next generation of consumers—gen Z—must focus on new ways of engagement, claims Accenture Consulting. “This group is looking for enhanced digital tools such as the ability to purchase directly via visual social platforms,” according to the research firm’s global consumer research.
The research examines the purchase attitudes of millennial and gen Z consumers. It reveals distinct shopping preferences among gen Zers in particular, which Accenture says “make it imperative for retailers to further rethink and redesign their digital shopping capabilities and methods.”
No surprise really, the study finds social media will become a major direct shopping channel for gen Z. More than two-thirds (69%) responded they are interested in purchasing via social media directly, and 44% cited social media as a popular source for product inspiration. In addition, 37% responded they increased their use of social media for purchase decision-making in the last year.
“Social media has emerged as a real disruptor in targeting gen Z shoppers, who are true digital natives,” said Jill Standish, senior managing director of Accenture’s Retail industry practice. “To succeed in this increasingly digital world, retailers must understand gen Z’s expectations, influencer circles and behaviors—especially their social media habits and how they differ from those of millennials. If they are spending their time on social platforms, this is where they want to be buying their products.”
Ironically, the study also revealed that retailers cannot neglect the brick-and mortar store: 60% of gen Z shoppers prefer to purchase in-store; 46% will check in-store to get more information before making an online purchase. Notably, in the U.S., a whopping 77% of gen Zers said brick-and-mortar stores are their preferred shopping channel.
Despite this, Accenture found that gen Z shoppers are interested in new shopping methods. Among them, 73% said they are interested in curated subscription-type offerings for fashion and 71% would like automatic-replenishment programs. In fact, a majority of gen Zers said they are willing to shift more than half their purchases to a retailer offering this service. Another digital shopping tool of interest is voice-activated ordering: 38% of gen Zers are willing to try it and 10% are already using it.
“The ability to provide reliable and accurate product delivery and a great consumer experience requires retailers to enhance their capabilities in digitization, innovation and harnessing consumer data. Gleaning insights successfully can increase the lifetime value of each customer,” Standish added.
Other Gen Z Shopper Findings
Visuals & Social Media
Gen Z has demonstrated they are all about visuals—videos and pictures. YouTube is their most regularly used social media platform, cited by 84% of gen Z respondents. This is in contrast to the finding that Facebook is the most popular social platform for both younger (21–27 years old) and older (28–37) millennials. In addition, 66% of gen Z shoppers regularly use Instagram, compared with 40% of millennials. And gen Zers are more than twice as likely as millennials to use Snapchat (54% versus 38% for younger and 22% for older millennials).
Gen Zers are more likely than millennials to purchase an item due to: what their family thinks; recommendations from watching YouTube videos; what their friends think; and comments on social media.
In addition, when shopping online, gen Z shoppers are more likely than millennials to: chat with an online sales assistant; check in store for more information; and ask family and friends’ opinions via social media, text or phone.
No Brand Loyalty
According to the study, gen Zers haven’t formed strong brand loyalty. Just 16% shop at a single store for clothing/fashion (compared with 26% of millennials); only 19% shop at a single store for health and beauty items (34% of millennials); and 38% shop at a single place for groceries (versus 55% of millennials). Of note, in the U.S., brand loyalty among gen Z is even weaker; just 5% shop at a single place for clothing.
The study also found that gen Zers are impulsive buyers and will additionally pay for speedy delivery. They are more likely than millennials to make a purchase because: they just wanted to buy something; they randomly saw something they liked; or it was recommended.
Furthermore, gen Z shoppers want quick delivery and will pay more for the convenience. Indeed, 58% responded they would pay more than $5 for one-hour deliveries.
“Gen Z is the next big consumer market and purchasing powerhouse,” concluded Standish. “Retailers need to invest in the digital tools that will enable them to speak to gen Z through visuals, collaborate with them across multiple channels and devices, and make them feel part of their brand. Offering services such as crowd-sourcing, customization and hyper-personalization are a must-have capability for reaching a generation that is shaping and commanding today’s digital retail landscape.”
Accenture surveyed 9,750 respondents from 13 countries across six continents. Participants shopped both online and in stores within the three months prior to the study. The survey was conducted in October and November 2016.
Respondents belonged to one of three age groups: gen Z (18–20 years, minors restricted); young millennials (21–27 years) and older millennials (28–37 years). Each groups accounted for approximately one-third of all respondents. accenture.com