Commentary: A Closer Look at Gen Z
Generation Z (Gen Z) is the newest emerging consumer group, born after the mid-1990s through the early 2000s, these consumers are quickly reaching the age of substantive disposable income. According to a Bloomberg analysis of United Nations data, Gen Z will comprise 32% of the global population of 7.7 billion by 2019. This means retailers who have been focusing on Millennials (which comprise 31.5% of the population), should be actively working to understand this emerging group and accommodate their preferences.
As the first generation to grow up completely immersed in technology, there have been many generalizations about Gen Z. They can’t communicate face-to-face. They are passionate, but impulsive. They are so engaged in technology, they are less likely to be in-store shoppers. They have short to almost no attention spans. Despite these stereotypes, it’s important that retail leaders truly understand their Gen Z consumers and not get caught up in inferences.
To help retailers better understand the true insights and preferences of the Gen Z shopper, Profitect recently released the findings of the Profitect Gen Z Consumer Survey of more than 1,000 U.S. shoppers, ages 18-22. The survey provides insight into Gen Zers, so retailers can better understand their attitudes towards in-store shopping, products, and even working in retail themselves. A few interesting facts include:
•Gen Z Shoppers LIKE to Shop in Stores
There is a misconception that since Gen Zers are digital natives (grew up with technology, easily communicate via chats and social media channels) they will be hesitant to head to brick-and-mortar stores to shop. However, results of the survey found that 76% of Gen Z respondents chose the store as their shopping destination over only online purchases. The survey revealed that 42% of Gen Z respondents actually preferred to shop in-stores over online and an additional 34% prefer to shop in-stores and online equally, leaving only 23% of Gen Zers who prefer to shop online.
Retailers need to ensure they capture a Gen Zer’s interest while in store, with great displays, customer service, curated localized assortment and more. In-store shopping should feel like an experience rather than a transaction.
•In-Store = More Items
Our exclusive survey data found that about half of Gen Z respondents said that browsing in-stores is their biggest influence to shop. Furthermore, 67% of respondents also indicated that their feelings at the time is what most prompts them to add more items to their shopping basket.
Survey results indicate Gen Z shoppers are openly emotional, and can be impulsive when shopping, like other generations beforehand, so retailers should understand this trait and play to it with in-store messaging, displays, and promotions, making sure it is all aligned with online message, since Gen Zers like to check product attributes online prior to shopping in the store. Nearly half of Gen Z respondents said that in-store displays influence them to add items to their basket. Retailers should pay close attention to store merchandising or promotion data to improve future performance, especially when targeting Gen Z shoppers.
•Inventory Accuracy is Critical
By 2020, there will be 2.1 billion digital buyers worldwide. Gen Z makes up a large portion of this cohort and making sure you’re creating the optimal omnichannel experience is important. Our survey found that 60% of Gen Zers will check a product’s in-store availability prior to going to the store.
Additionally, 21% indicated that if they found that the website said the item was available and then once they went to the store discovered it was not, they would NEVER want to shop at that retailer again. An additional 59% indicated it would severely annoy them. Retailers simply can’t afford to have more than 80% of their Gen Z audience frustrated with their brand, especially when they want to be in stores and adding to their baskets.
Inventory accuracy is critical with this audience. Retailers should look at prescriptive analytics solutions that can drive actionable insights out of their inventory data to drive inventory integrity and identify opportunities for action that can result from operational execution lapses, procedural non-compliance, fraud, vendor quality, transportation, DC/DSD performance, quality, planning and allocation gaps, and more. The right solution should deliver results quickly.
•Reports Are Not the Answer
Another interesting insight showcased that retail is a stronghold for entry-level jobs with young Americans, with 44% respondents touting employment in retail/grocery. What’s more, 65% of these Gen Zers proved that antiquated processes in task management and reporting across today’s workforce landscape are a detriment to attracting this generation.
Gen Z is used to seeing reports as part of their everyday job however, two-thirds of those respondents claimed the reports are too long and time-consuming. And an additional 30% felt that reports weren’t relevant to the job or too complicated to understand. Retailers and CPG brands need to adopt smarter task management solutions that bridge the gap for Gen Zers and enable employees to work more efficiently to improve business operations. Our study reiterates the need for a smart analytical solution, such as prescriptive analytics, that disseminate simple, easy-to-understand instructions or assignments in the workplace.
So, what does this mean for retailers? They should be sure to capture a Gen Zers interest while in store, for those who prefer it, and supplement with online promotions driving others into the store, for those who might be indifferent to in-store or online. While this survey was focused on Gen Z preferences for retail, its findings ring true across a variety of industries. I encourage all brand leaders to take a deeper look into this growing and influential group of individuals and adjust sales strategies accordingly as they truly are the future.
Guy Yehaiv is CEO of Profitect.