Much has been said about millennials—with good reason. Their attitudes, habits, knowledge and expectations are spurring cultural and technological changes to businesses worldwide.
But the next generation is advancing, right on the heels of the millennials—Gen Z, and its presence will bring even bigger changes and challenges to retailers. While millennials made the most impact as they entered the workplace, Gen Zers, some of them currently in elementary school, are disrupting retail businesses right now.
Who is Gen Z?
Gen Zers (also known as Generation Z, Post-Millennials or iGeneration) were born between 1996-2010, and are the first digital natives. These 7 to 21-year-olds don’t remember life before mobile phones, social media or the Internet. Unlike previous eras of young people who were seen but not heard, 70% of Gen Zers say they actively influence family purchasing decisions. With their mobile devices at the ready, this global population of 2-2.5 billion (and 70 million in the U.S.) has $44 billion in buying power.
In contrast to millennials, Gen Zers are a cautious bunch. Although they may not remember 9/11 firsthand, the aftermath left them wary and more socially aware than their predecessors, which affects their shopping decisions.
Because of Gen Zers’ significant influence as shoppers—even at a young age– retailers will realize the disruptive impact of Gen Zers before other business sectors. Understanding Gen Z shoppers is the first step in attracting this young generation.
4 Things Retailers Should Know About Generation Z
- 98% of Gen Zers still shop in brick and mortar stores. Creating the right in-store experience is crucial. From offering personalized customer service to ensuring items are in stock, retailers can make a positive impression on this desired demographic—because they may not get a second chance.
- Gen Z shoppers expect technologically savvy retailers. This generation goes from mobile phones to iPads to laptops—and expects fast-loading websites and an omnichannel experience. If they research an item online, then go to the store to see the item, they want that transition to be seamless.
- Gen Zers have money, and aren’t afraid to save it. Despite their unprecedented influence on purchasing decisions, Gen Zers are financially conservative. Moreover, this young generation has an entrepreneurial spirit and an affinity for hard work. With funds to spend, they are selective in how they spend it. Retailers who reach, attract and retain loyal Gen Z shoppers will have an advantage.
- Gen Zers care about social issues and are drawn to brands that do too. Although Gen Zers can still be fickle towards brands, they connect with those that promote causes and stories. Retailers must have the agility to support these brands—even as today’s cause changes tomorrow—and manage inventory to stay on top of these changes. Retailers that do will draw shoppers in search of an emotional reason to purchase.
Gen Zers will be disrupting retail for a long time. Already comprising almost 25% of the U.S. population, Gen Zers will represent 40% of global consumers by 2020. Retailers who understand the distinct expectations and challenges of Gen Z will have the advantage in connecting with this unique generation.
Chart above from the infographic “What Retail Needs to Know About Generation Z”. Complete the form below to request the full infographic.