I have two teenage daughters. They’re my family, not colleagues or research subjects, but anyone who tries to say you can’t learn valuable things about your profession by observing those closest to you has no clue what they’re talking about. My daughters and their friends are my go-to bellwethers to understand Gen Z’s behaviors and the role that commerce plays in their young lives. Many of their shopping habits are already heavily influencing multimillion-dollar business bets, technology development decisions and customer experiences — and that’s before Gen Z even claims the real bulk of buying power.
How are Gen Z consumers actually shopping, and what can retailers learn from those behaviors? Here are a few ways we should be thinking a little more like Gen Z.
Online-only may not be the answer.
If you’ve been paying attention to the retail conversation over the last number of years, physical retail was proclaimed dead in favor of an online-only model. But over the last 12 months, we’ve seen many of those direct-to-consumer, online-only darlings doing the very thing analysts and industry experts advocated against: opening a brick-and-mortar store. What’s more, for many of those DTC brands, the investment in a physical presence has paid off.
The secret? Before opening a store, brands like Glossier, Allbirds and Rent the Runway sought to truly understand what their customers were looking for in a physical retail experience and took the time to create an experience that felt like a natural extension of their existing sales channels while still uniquely addressing the needs of an in-store shopper.
This move mimics my own experiences. While my older daughter conducts almost 100% of her shopping online — relying on her smartphone to complete all but the most expensive purchases — my younger daughter prefers the tangible feeling of shopping in a physical store. For her, the ability to touch and try the product, combined with the immediate gratification of walking out of the store with the desired item in hand, epitomizes a successful shopping experience. And she’s not alone. A recent National Retail Federation survey found that physical stores were the preferred purchasing channels for consumers aged 13 to 21. Rather than extolling the virtues of a single channel, retailers should evaluate how they can extend the value of their brand across a number of channels to appeal to all shopper types.
You’d think the proliferation of fast (and uber-affordable) fashion signifies that Gen Z places cost over all else, but I have found the opposite to be true. Sure, my daughters and their friends flock to places like Urban Outfitters or Brandy Melville where they can stock up on the latest teen fashion trends, but they also care deeply about quality and value. Although their disposable income comes from birthday money and part-time afterschool jobs, they are more willing to invest that limited money on an item that is well-made over one that is cheap. This preference may also explain why direct-to-consumer brands have seen such rapid success with younger generations; they too have prioritized quality and experience over cost. That should give retailers a marketing playbook for the future: Don’t completely ignore price, but find a way to mix it with messages focused on quality of product and experience.
Amazon is not the retail be-all and end-all.
Given how concerned my daughters are with the comprehensive experience a brand offers, it should come as no surprise that they don’t see Amazon as the one-stop-shop that other generations do. Amazon may have accounted for 48% of all retail purchases in 2018, but I wouldn’t be surprised if the marketplace saw fewer purchases from Gen Z consumers in the future. I personally love Amazon’s teen account feature, which allows me to set a preapproved spending cap and shipping address as well as get text notifications about what items my kids have ordered, but they aren’t as bought in. For them, Amazon serves primarily as a location for purchasing life basics (school supplies, books, etc.), but they reserve the “choice” purchases to specific brands. This should be a positive confirmation for brands that are increasingly concerned about Amazon’s retail dominance and serve as a stark reminder that a sound e-commerce strategy is one that treats Amazon as only a single sales channel, not the sole source of revenue. (Full disclosure: Amazon is a partner of BigCommerce.)
‘Social’ shopping is popular with teens but doesn’t always end in a purchase.
My company’s own research has found that Gen Z is three times more likely to shop on Snapchat than the average consumer. And yes, the major social platforms have already recognized the potential there and are innovating about as quickly as they can in the direction of becoming legitimate marketplaces. But social shopping is as much about the social as the shopping. Teens rely on social networks to create living, ever-evolving product wishlists and to easily share those items with their closest friends (and yes, even mom and dad on occasion), but they have not yet fully embraced the idea of completing their purchase on social. What this means for retailers: Discovery, and the ability to share those discovered items, will remain as important as the purchase itself. Focus on creating content that inspires your consumers to share and save, and make the purchase accessible, be it directly in-app, on your website or in a physical store.
They may not have reached full maturity yet, but in a lot of ways, Gen Z is already the cultural pacesetter. Commerce is no exception. How (and how soon) retailers and technology companies respond to those catalyzing trends and shopping preferences are going to be sensational to watch over the next five to 10 years as Gen Z comes into its own.