Survey: Gen Z loves digital shopping tools — and physical stores
Move over millennials, Gen Z is snapping at your heels. And retailers should take note.
Retailers looking to capture share of wallet and brand loyalty from Gen Z – the most digitally- and socially-engaged generation to date — need to step up their focus on new ways of engagement. But they also should pay attention to their physical stores.
That’s one of the key takeaways of new research from Accenture, which found that one of the ways to Gen Z’s heart is through enhanced digital tools, such as the ability to purchase directly via visual social platforms, including YouTube, Facebook, Instagram and Snapchat.
At the same time, the study revealed that retailers should not neglect the physical store. Sixty percent of Gen Z shoppers still prefer to purchase in-store, and 46% will still check in store to get more information before making an online purchase. In the U.S., 77% of Gen Z respondents said that brick-and-mortar stores is their preferred shopping channel.
The Accenture report, based on a survey of nearly 10,000 consumers across the globe, revealed some distinct shopping habits and preferences among Gen Z consumers, which make it imperative for retailers to further rethink and redesign their digital shopping capabilities and methods, according to Accenture.
More so than for previous generations, social media is set to become a major direct shopping channel for Gen Z, with 69% of them interested in purchasing via social media directly.
In addition, 44% cite social media as a popular source for product inspiration, and 37% have 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.”
The research also revealed that Gen Z shoppers are interested in new shopping methods. Nearly three-quarters (73%) of Gen Z shoppers are interested in curated subscription-type offering for fashion, and 71% are interested in automatic-replenishment programs, with an overwhelming majority willing to shift more than half their purchases to a retailer offering this service.
Additionally, 38% of Gen Z’s are willing to try voice-activated ordering, while 25%ercent of them said they can’t wait to use it and 10% of them said they 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 said. “The fact that Gen Z shoppers are open to new shopping methods is a real opportunity for retailers to secure new consumer data and get closer to this generation.”
Other key findings about Gen Z from the Accenture report include:
They are all about visuals – videos and pictures. YouTube is the most-regularly used social media platform, cited by 84% of Gen Z respondents, while Facebook is still the most-popular social platform for both younger (21-27 years old) and older (28-37 years old) millennials.
Two-thirds (66%) of Gen Z shoppers regularly use Instagram, and Gen Z shoppers are more than twice as likely as millennials to use Snapchat (54% versus 38% for younger and 22% for older millennials).
They regularly turn to their ‘influencer’ circles. Gen Z consumers are more likely than both younger and older 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’s are usually more likely than both younger and older millennials to: chat with an online sales assistant; check in store for more information; ask friends’ opinions via social media, text or phone; and ask family members’ opinions via social media, text or phone.
They haven’t formed strong brand loyalty. Only 16% of Gen Z’s shop at a single store for clothing/fashion; only 19% shop at a single store for health and beauty items, and fewer than 38% shop at a single place for groceries. In the United States, brand loyalty among Gen Z is even weaker, with only 5% of U.S. Gen Z’s shopping at a single place for clothing.
They are impulsive buyers and willing to pay for speedy delivery. Gen Z’s crave speedy delivery and are willing to pay for it. In fact, 58% of Gen Z respondents said they would pay more than $5 for one-hour deliveries.
“Gen Z is the next big consumer market and purchasing powerhouse,” said 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.”
Survey: America’s favorite stores are…
A regional department store, a warehouse giant, a discount supermarket and an online powerhouse rank among the nation’s favorite retailers.
That's according to the American Consumer Satisfaction Index, which rates consumers’ satisfaction across six retail industries. The report found that satisfaction with the overall retail trade rise 4.7% in 2016 to a score of 78.3 (on a 100-point scale) an all-time high for the sector.
Dillard's was tops among the 15 companies surveyed in the department and discount store category. It received a score of 83 out of a possible 100, up 4% from the previous year. J.C. Penney Co. Inc. took second place with a score of 82, and also had the largest increase from the previous year, up 11%.
Nordstrom was the only department store to deteriorate in customer satisfaction, slipping 2% into a three-way tie with Dollar Tree and Belk at 80.
Customer satisfaction with Walmart rose 9% as the company's renewed attention to customer service via "holiday helpers" to expedite checkout lines and aid shoppers paid off. Despite the ACSI gain, however, Walmart continues to anchor the low end of the industry with an ACSI score of 72.
The supermarkets sector was led by Trader Joe’s, with a score of 86, followed by Publix at 84 and Aldi, H-E-B and Wegmans at 83. Whole Foods climbs 11% to 81, ahead of Hy-Vee, Kroger and ShopRite (all 79). Meijer matches Target at 78, followed by Bi-Lo (+4% to 77).
Costco led the specialty retail category, with a score of 83, followed by Sam’s Club, L Brands, and Barnes & Noble, all at 81.
Home Depot rose 10% to 80, ahead of Lowe’s (79) for the first time, as well as Menards (79). Ascena, which recently acquired Ann Taylor, makes its debut at 78 and ties with two pet supply stores: Petco and PetSmart. Best Buy, Big Lots and Toys “R” Us follow at 77. Abercrombie & Fitch improved the most, up 17%, but remains last at 76.
In the online category Amazon continues to hold first place, advancing 4% to 86 amid a strong holiday season, followed by Newegg at 83 and eBay at 81.
The ACSI report, which is based on 12,515 customer surveys collected in the fourth quarter of 2016, is available for free download here.
Nasty Gal to live on
Nasty Gal is getting a new lease on life — but only in the digital space.
The brand, which was acquired out of bankruptcy in early February by British online fashion group Boohoo.com, will live on under new leadership as a pure player. Nasty Gal recently closed its two brick-and-mortar stores, both of which were in the Los Angeles area.
A core team of original employees will be based out of Los Angeles to ensure the DNA of the brand is retained, the new owner said. Nasty Gal will continue to offer a range of clothing, shoes and accessories under its own label, with plans to design exclusive collections later this year.
"We are thrilled to have Nasty Gal as part of our family, and are excited by the opportunity to expand the company into international markets. This is a distinctive brand with a fiercely loyal customer base, and we are committed to preserving that as we move forward into a new chapter,” said Carol Kane, Boohoo group joint CEO and interim CEO for Nasty Gal, Carol Kane.
Nasty Gal has a global online presence in 180 countries and a social media following of over 3.5 million.