Boomers. Generation X. Millennials. For years, retailers have found ways to target, obtain, and retain these varying demographics, each with their own set of social values and behavioural norms. Enter Generation Z, the newest category of great retail influencers.
Generation Z, born after 1995, is unfamiliar with a life that existed before the internet and are very tech savvy. This generation comes with a whole new set of terms and conditions to purchase. According to a recent LoyaltyOne study, 50 per cent of Gen Zs prefer to browse online first and then buy instore, which is not surprising given that Gen Z was born into a world where they seamlessly move between the digital and physical worlds without making a conscious distinction between them. This realization drives home to retail marketers that the omni-channel experience needs to be fluid in order to succeed with this targeted group.
But why the great focus on Gen Z now? They live at home, go to school and have little to no independent income aside from those who receive a paid allowance from their parents. What kind of power do they actually have?
More than you think.
On average, Gen Zs are paid $16.90 per week, which translate to $44 billion per year. On top of that, 93 per cent of parents agree their Gen Z children maintain some influence on household spending and purchases. Boomers and Gen X may have the buying power, but those with Gen Zs under their roof are being swayed by the younger generation’s preferences.
Retail marketers are being compelled to move in sync with this generation as they currently make up nearly eight million Canadians and by 2020 will account for 40 per cent of purchasing consumers. Gen Z feels tech and web related attributes are important when choosing a retailer and can be invaluable in acting as a driver to grow a key customer base and customer loyalty. Retailers need to add a greater level of innovative technology to both their in-store and online experiences in order to secure this generational piece of market share.
One example of innovative in-store technology is how Pinterest reverse-engineered social media in Brazil and brought an online platform to the physical in-store experience allowing customers to pin items in store and save them immediately to virtual inspiration boards on their Pinterest account. This was done using Bluetooth low energy (BLE) technology to connect with a "PinList" app that the shopper downloads to his or her phone. This technology helped to not only personalize the retailers’ offerings to the customer and draw a larger crowd to Pinterest’s platform, but ultimately connect the physical and online world in an inventive way.
Retailers that learn how to market to this group now will be in a better position to build an ongoing relationship with them into the future. As the youngest generation, Generation Z will define the immediate future of consumer behaviour and travel across in-store and digital platforms. Marketers will need to travel with them or get left behind.