TECHNOLOGY

Here’s what Gen Z wants from retailers

BY Deena M. Amato-McCoy

Gen Z consumers want to be awarded points for walking into a brand’s location.

This was according to “Loyalty Research: Gen Z, Millennials and Beyond,” a study from CrowdTwist, which revealed that 87% of digital natives want omnichannel loyalty programs from retailers, restaurants, and gyms. A majority (77%) of this demographic is also willing to pay a premium to participate if they will be rewarded with valuable perks like free shipping (for example, Amazon Prime). The Silent Generation (those born 1945 and earlier) was the only group where the majority (55%) answered no to paying a fee for a loyalty program.

Gen X participates most in loyalty programs with 82% of these consumers responding that they are active in at least one loyalty program. They also redeem more than other generations, as 77% of Gen X program members redeem rewards at least once a quarter. The least active group is the Silent Generation, with 35% responded that they don’t participate in any loyalty program.

Loyalty programs provide brands with younger target audiences a competitive advantage. For example, 72% of Gen Z and Gen X respondents said that they could be persuaded to choose one brand over another due to the presence of a loyalty program. This is followed by 68% of Millennials, 56% of Baby Boomers, and 42% of the Silent Generation.

However, there has been a decline in brand trust. Only 46% of Gen Z consumers and 55% of Millennials (the most trusting generation according to this year’s research) are willing to share their data in exchange for personalized experiences. The biggest skeptics are members of the Silent Generation, as only 21% said they were willing to share personal information in exchange for personalized experiences.

One issue that could be taking a toll on trust is a lack of brands’ personalization efforts. The majority of consumers want a personalized experience, with 70% of Gen Z respondents, 64% of Gen X respondents, and 63% of Millennials expecting to receive personalized recommendations via an app while browsing in-store.

However, many brands’ current personalization efforts are missing the mark. Only 42% of Millennials, 37% of Gen X consumers, 33% of Gen Z consumers, 29% of Baby Boomers, and 23% of the Silent Generation have purchased something that was recommended to them by a brand in the past six months. This is indicative that brand execution utilizing predictive analytics, while growing in popularity, is not meeting full potential, the study revealed.

“This insight is helpful for brands to understand where opportunities lie in engaging different consumer groups, and how to remove barriers and frustrations and demonstrate an understanding of who their customers are,” said Scott Matthews, CEO of CrowdTwist. “Participation in loyalty programs remains high and has the potential to influence brand selection, but it’s evident that there are opportunities for brands to create better value.”

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TECHNOLOGY

A new video streaming network is launching—but not for traditional shows

BY Deena M. Amato-McCoy

Digital customers now have a new way to shop.

A new shoppable video streaming service, called Alecia, enables customers to watch original videos, browse content and buy products they see on their device’s screen. The subscription-free app is available to stream online, and via the Alecia app for mobile devices, tablets and smart TVs.

Based on an interactive technology platform, Alecia makes on-screen products instantly available for purchase to viewers as they continue watching. “Thousands of brands and products” are available, and can be purchased with the click of their smart TV remote or tap of the screen.

Here’s how it works: After downloading the app, users sign up and create a profile. They can watch videos and stream original shows, and shop right through their device’s screen. Purchased items are delivered to their front door.

Content is comprised of licensed TV shows and movies, as well as original content developed and produced exclusively for the network. During the day, videos range from cooking to fitness, parenting, and pets, among other topics. At night, content includes dramas, comedies, and thrillers, among other video. Users can purchase any featured items, according to the company.

Founder and CEO Alecia Vimala founded the company and created her first videos in 2016. She received her first round of funding in August 2017, and acquired additional funding in February. The platform launched in September.

“I want Alecia to be a network of the people with content built and created by them,” said Vimala. “This will become the new standard of reality television.”

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TECHNOLOGY

The reasons retailers struggle to attract digitally-savvy consumers are…

BY Deena M. Amato-McCoy

Markdowns, returns and out-of-stock merchandise make it difficult for North America retailers to lure new digital consumers.

This was according to “Retail Index: 2018 Analysis & Holiday Outlook,” a study from DynamicAction. The study, which tracked online purchases of general merchandise, home goods and apparel (excluding Amazon and grocery transactions), revealed that new customer orders are down 5% year-to-date compared to 2017. First- and second-time buyers are down 8% compared to 2017, and there has been no weekly increase year-over-year in new customer orders since April.

Retailers are relying on marketing in hopes of attracting new shoppers, but these costs are on the rise. There was an average 5% increase in marketing spend this year, investments that soared 60% just during the summer months (June-September). Similarly, orders that used a promotion are up 2% for 2018 so far, compared to 1% for all of 2017. However, margin impact due to promotions is also on the rise, up 3% year-to-date.

North American retailers have also held more inventory this year, with extra inventory increasing 21% between this year and 2017. A surplus of merchandise is also causing more markdowns. In fact, orders placed using a markdown are up 5% for 2018 compared to last year. The margin impact of these markdowns is up 27% year-to-date — and 18% in August alone.

Customers are eager to get their hands on this discounted merchandise, but they aren’t keeping everything they buy. Free shipping is up 13% year-over-year so far in 2018, but so are returns. In fact, the value of returns has jumped 36% so far this year.

In addition, there is a downward trend in the availability of products that customers are seeking online in North America. For example, there has already been a 3% drop in online product availability when a shopper was ready to make a purchase. Merchandise was out-of-stock 13% more frequently in the month of August, alone, according to the study.

“Pulling inventory levels into alignment ahead of the holidays will be paramount to driving profitability through the lens of ‘views availability,’ or ensuring specific products customers are seeking do not fall into fragmented or out-of-stock levels prior to the holiday season,” the study revealed.

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