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How Gen Z Shops: Retail for a Constant State of Partial Attention

BY CSA STAFF

By Christian Davies, [email protected]

Meet the most complex shopper of all time – Generation Z. By 2020, today’s 14-19 year olds (Gen Z) will be the largest group of consumers worldwide, making up 40% of the U.S., Europe and the BRIC countries, and 10% in the rest of the world. The needs and behaviors of this group will influence the future of mainstream retail.

How do retailers and brand owners engage with a new kind of shopper, who pays less attention, but with a sharper and hyper-informed eye? There have been many observations on the lifestyle and digital dexterity of Gen Z, but their shopping habits have remained unobserved. In this article, we clarify Gen Z’s distinct retail behaviors and offers strategies for retailers to attract them with seamless and highly commercial experiences.

Gen Z is not a new species. In many ways, they’re just like the teens of previous generations, with new tools to express their identities, discover new information and influence their peers. Understanding their behaviors – and the ways in which they differ from previous generations – is key to understanding how to meet their needs, today and in the future.

  • They live in a constant state of partial attention, logged into multiple platforms across a mosaic world of their own making, but will know about a problem with a product or brand, or a promotion way before you do. They are happy to have a beta product today, with the promise of a better one tomorrow; it will be better because they’ve co-created it.
  • These shoppers hop between retailers – physical stores or online destinations – snapping pics and screen grabs as they go, and leaving a trail of hashtags and pins. Gen Z uses multiple platforms instead of multiple devices, and expects constant innovation. In fact, they dislike products that aren’t constantly changing!
  • They’re expert messaging filterers. As savvy cynics, they trust their peers, not marketers. Opinionated, connected and influential in the digital realm, they’re also resourceful, looking for a retail experience with opt-in service, two-way dialogue, and mutual rewards.
  • They’re as socially conscious as they are brand-conscious; they’ve Googled what your brand’s all about before leaving home, and browse a scrapbook of wants and ideas as they peruse your shelves, all the while getting real-time feedback from friends.

Retail principles for attracting the Gen Z shopper
So how can you create retail experiences that will appeal to “born digital” Gen Z? FITCH distills the essential building blocks of the shopping experience into physical, human, and digital (PHD) elements. A unique mix of PHD elements can help to define a retail brand, and is important to creating seamless retail interactions that make it easy to engage, target different shopper mind states and create distinctive new experiences. The key for Gen Z is to put them at the center of your thinking.

Shift from offering new things to buy, to inspiring new things to do.
Physical: REI incorporates climbing walls in its stores. Very physical, super tactile, it’s a great way to get Gen Z involved, building excitement and footfall.

Human: Kochhaus (Germany) offers a solution to the question “What’s for dinner tonight?” by providing meal suggestions and collecting all the ingredients and information you need for each dish. ‘Foodie’ staff are on hand with tips and advice.

Digital: The Reiss Guide offers up-to-date advice on the best places to eat, drink, sleep, visit and, crucially, shop in cities all over the world, including links to the nearest Reiss fashion store.

Shift from telling your story, to starting a conversation about theirs.
Physical: Lego in-store interactive areas, created by FITCH, get the product out of the box and into play. By encouraging exploration, discovery and fun, conversations are started and stories are told.

Human: Best Buy was the first to use Twitter to actually help consumers. @BestBuySupport is a 3000-strong collective of ‘shop floor’ technology pros constantly tweeting insights in answer to consumer questions.

Digital: Under the headline of ‘Heritage Woven In,’ Fred Perry reveals the brand’s street heritage and invites people to share their own stories and pictures, bringing the famous shirt to life.

Shift from making it perfect before sharing, to making it better with their input.
Physical: The Puma Creative Factory invites buyers to get hands-on in the creative process: “We supply the materials and you supply the imagination …” and then walk away in the sneakers of your dreams.

Human: Sample Central (Tokyo) offers a bespoke sampling service, allowing consumers to try out brands and products. Visitors may be offered freebies, ‘paid for’ with the valuable feedback they provide to Sample Central.

Digital: ‘My Starbucks idea’ invites coffee drinkers to offer suggestions on how to make Starbucks better. Out of the thousands of suggestions they receive each year, up to 20 are implemented, a great example of the way Gen Z can inform and change large organizations.

Capturing the critical Gen Z market represents a significant opportunity, but you’ll have to sign up for unprecedented change to achieve the seamless retail that will engage these savvy and cynical consumers. One thing is certain, though: doing nothing is not an option. Gen Z is the future. Their shopper needs and behaviors will revolutionize retail.

Christian Davies is executive creative director, Americas, for design and branding consultancy FITCH, Columbus, Ohio. He has worked with a wide variety of brands, including Buffalo Wild Wings, Coca-Cola, Hard Rock Hotel & Casino, Harley Davidson, Lego, McDonalds, Nickelodeon, Target, Tiffany & Co, Timberland, and Volkswagen. He can be reached at [email protected].


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News

Meijer wraps up 2013 expansion strategy

BY CSA STAFF

Meijer wraps up its 2013 growth strategy with the opening of a huge supercenter in Danville, Ill., this week. The 190, 000-sq.-ft. store is the last of six new stores the retailer has opened this year in the Midwest, which represents its most aggressive expansion in recent history.

This latest supercenter, located at 36 Vermillion St., has created 300 jobs and is open 24 hours. It is part of a $200 million investment this year that, along with the other five supercenters, has included extensive remodel projects for five additional stores in Michigan and Illinois and a new distribution complex in Pleasant Prairie, Wis.

"Our team has worked very hard to get this supercenter ready and we’re excited to bring a 24-hour shopping option to our new neighbors in Danville and its surrounding communities," said Hank Meijer, co-chairman of Meijer. "Whether it’s a quick meal for the family, finding that perfect gift for someone on your holiday list or seeking answers about a nagging health concern, this supercenter represents our ongoing commitment to help provide a healthier, balanced lifestyle for anyone who steps through our door."

In addition to the retailer’s traditional grocery and merchandise offerings, garden center and 24-hour gas station, the new pharmacy will offer the company’s free prescription program as well as clinical services and immunizations. The prescription program includes leading oral generic antibiotics with a special focus on prescriptions most often filled for children, prenatal vitamins and medications for those with diabetes and high cholesterol.

The new supercenter will also offer more than 600 varieties of fresh produce, a meat department that offers neighborhood butcher shop service and a bakery that carries fresh bread baked four times a day.

Meijer now operates 204 supercenters and grocery stores throughout Michigan, Ohio, Indiana, Illinois and Kentucky.

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FINANCE

Abercrombie & Fitch reports weak Q3 sales; will close Gilly Hicks stores

BY Dan Berthiaume

New Albany, Ohio — Abercrombie & Fitch reported weak net and comparable store sales and laid out plans to restructure its Gilly Hicks brand as part of a strategic review in advance of releasing its full results for the third quarter of fiscal 2013.

Net sales for the quarter decreased 12% year-over-year, to $1.03 billion from $1.17 billion. Analysts had been expecting a $1.07 billion quarterly net sales figure. Total same-store sales for the quarter, including direct-to-consumer sales, decreased 14% with same-store U.S. sales decreasing 14% and same-store international sales decreasing 15%. In one positive result, total direct-to-consumer sales increased 11% for the quarter.

In response to these soft results, Abercrombie & Fitch will shutter all 28 of its Gilly Hicks stores. Most closures will occur by the end of the first quarter of fiscal 2014. The retailer will continue to sell Gilly Hicks branded merchandise through its Hollister retail banner and direct-to-consumer channel.

"Our results for the third quarter reflect continued top-line challenges, with overall spending among younger consumers remaining weak,” said Mike Jeffries, CEO and chairman of the board of Abercrombie & Fitch. “Until we have seen a clear trend improvement, we are continuing to take a cautious approach into the fourth quarter and are working to end the year with appropriate levels of fall carryover inventory.”

Abercrombie & Fitch expects a low-double-digit decrease in same-store sales for the fourth quarter of fiscal 2013. The retailer will release full third quarter earnings on Nov. 21.

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