Photo: RetailWire
What do we really know about Gen Z?
Much of what we know about Gen Z is based on statistics that we’ve heard tossed around for so long that we’ve accepted them as fact. One of these assumptions is that Gen Z expects to have an active voice in the creation of high quality, well-marketed products — and that they expect to get them on the cheap. We’re also told that Gen Z is made up of fickle consumers who are ever-ready to switch brands to get a better deal.
There are plenty of stats to lend credence to our fears. A recent study by the National Retail Federation (NRF) found that 65 percent of Gen Z consumers expect to combine coupons, discounts and a rewards program to get the most traction on their dollars. Of the 98 percent of Gen Z that make their purchases in stores, 56 percent want the in-store experience to be so darn engaging that they’ll never get bored.
With all of this discourse floating around, it’s no wonder that so many retailers are terrified of the next generation. It seems nearly impossible to give these demanding young customers everything they expect in a brand or a product for a price that they’re willing to pay or to provide them with the interactive, uber-personalized in-store experience they’ve come to expect.
According to a 2015 research report from the International Research Association of Computer Science and Technology (IRACST), a customer’s age can have a huge impact on their individual buying behavior. This study found that age can reflect a customer’s propensity to engage in activities such as impulsive buying, which this particular study found to peak after 18 and decline after age 30. Individuals between 18 and 39 were also found to be more tech-oriented and brand aware.
Keep in mind that, as of now, we’re drawing conclusions from stats pulled from children. The youngest members of Generation Z are just turning five, most still live with their parents and many have no independent source of income outside of their allowance.
This leads us to the question: How much of what we think we know about Gen Z’s buying behavior as a generation is more indicative of limitations imposed by their age, such as financial constraints, the inability to drive themselves and restricted credit card access?
Discussion Questions
DISCUSSION QUESTIONS: Which assumptions about the buying characteristics of Gen Z do you expect to change as more of its members reach adulthood? Do you think Gen Z will still be exceedingly frugal and prefer to do most of their shopping in-store once they come of age?
Poll
BrainTrust
Cynthia Holcomb
Founder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.
Sky Rota
CEO, GenZinsider.com
Gen Z, the indulged and privileged generation for whom all things analog are simply to augment their digital immersion. They will grow into their own creativity on the heels of generations before and for them, the possible will not be the exception. Will the slavery of consumption overwhelm them as it has the world before them? We can only pray, and train them for greater balance so debt load and unsatisfying jobs are less a part of their lives. Experiences will be the foundation of this training.
Gen Z is the first generation to have grown up with sophisticated electronics in the crib. They’ll expect personalization and levels of service that traditional retail cannot now deliver … there’s a lot of work to be done.
As a father to two of the younger members of the Generation Z segment, I can assure you that despite having touch screens and digital technology at their every disposal, they, along with their friends, still enjoy a multi-sensory in-store experience. It’s key to balancing their time with “offline” cultural, physical and educational activities.
Without making broad generalizations, they along with their friends are growing up in a world where they are socially and environmentally conscious. They are concerned where the products are sourced and enjoy local community-based stores.
The store shopping experience they are seeking is one where it’s a physical and digital playground in which they can try, experiment with and enjoy the product before making a purchase decision. With the emergence of showroom hybrid retail concepts, retailers will be more than equipped to provide that experience.
The challenge with the Gen Z customer segment is understanding what kind of value they are looking for, and how to best interact with them digitally given their strong propensity to using mobile devices. Gen Z creates and consumes so much digital information every day that brands need to find a unique yet non-intrusive way of establishing relevance. Those brands that can navigate their way through the ever-changing preferences of Gen Z will be positioned for longer-term success. We’ve curated additional thoughts here.
I hope the Gen Z desire for experiences beyond digital will keep them out and about in retail stores as they try to discern what brands will work for them as they start households. But as they get comfortable with brands they like (including Amazon Choice), I believe Gen Z will have the opportunity to drive the voice-activated shopping movement forward very quickly, based on their exposure to in-home devices such as Echo and Alexa. It’s just too easy!
As a mother of a Gen Z person, watching the hundreds of Gen Zers walking into high school each day at drop off I marvel at the lack of diversity (a Gen Z trend) in apparel and shoes compared to the Millennials and earlier generations. Gen Z appears to be counter in culture to Millennials, reflective of a shift from the parental overindulgence of the late ’80s to ’90s to today’s post-recession shift to a broader view of life with eyes aspiring to the future. Likely Gen Z will be not so much frugal as more aware of their resources relative to life goals. Spend less, invest more and likely enjoy the in-store shopping experience as a treat to break the boredom of shopping online.
Good insight Cynthia … from a frugality perspective, My Gen Z kids are all about the thrift store shopping experience. One finds cool “retro” clothes for herself and even buys clothes and regenerates them through patches or other decorative material and re-sells them to her friends.
We often talk about legacy infrastructure that keeps technology from being adopted. In the U.S., the most stored country in the world, the fact that there are so many stores kept retailers from understanding, investing and embracing online.
There is also legacy in behavior. Us elders where brought up on stores and it has taken us a while to adapt to online. The generation behind us adapted much sooner and spend more time and money online. The generation behind them has developed their own behavior legacy and it is not going to the store — it is ordering online. Online is the first place they go.
One comment abut Gen Z being frugal: They aren’t frugal. They spend their money reasonably. They are practical when it comes to so many things that we were spendthrifts on. But they spend their money carefully and openly, on what they want and they are willing to do it.
Of course their shopping and spending patterns will evolve as they age, but here is what I believe is the most important point to remember: if we earn their devotion and loyalty to the store experience now, we have a much greater chance of keeping the store relevant with them as they grow up. We have to engage, entertain and delight now if we want to increase our odds for store visits from them forever.
First of all, Generation Z is Not “frugal.” I think you are confusing us being educated knowledgeable informed shoppers to being frugal. Let me give it to you straight. Generation Z has zero money of our own! We are a large generation from college Seniors down to five-year-old kids. Every one of our purchases are made with our parents money! Everything! None of us are without a new phone, gaming system (Xbox/PlayStation) or nice pair of shoes. We are the professional persuasive texting generation. We can get our parents to purchase anything for us, at any time and any age. And we provide all the research needed to answer their questions. You want to know if we will be making these same purchases when we begin to earn our own money? I will honestly say, most of us are in for a rude awakening. I don’t believe we will want to use our hard-earned money as easily as we do our parents money.
Will we be shopping in stores? Shopping online is such a convenience and a huge selection. Generation Z doesn’t like to go to stores to be disappointed when we can stay home and get exactly what we want. No settling for something else for Generation Z.
I think this is an excellent question, because I think a LOT of the motives and desires ascribed to Gen Z are very much based on the behavior of allowance-constrained teens, rather than statements about the generation itself. I spend more time with younger teens — 13- to 16-year-olds — than I would like to admit, and I think a lot of these pronouncements about Gen Z are dead wrong. The Parkland survivors are not Millennials — they are Gen Z. They are deciders and doers and impatient with “that’s how it has always been done.” They are makers — they are learning programming, web design, CAD, CNC and 3-D printing in elementary school and middle school, forget about high school (and if this does not describe your kids’ elementary or middle schools, then I highly recommend you start pushing hard for change).
My experience with these teens is that they are highly informed shoppers and they expect retailers to be as well. They want deals because they are budget constrained, but they’re not patient enough to waste their free time scouring the net for coupons or the best deal. They’re more than willing to trust a retailer or a brand — until that trust is broken. I think the biggest difference between Gen Z and other generations is that once that trust is broken, they’ll just shut you out of their lives. You will almost never get another chance to get back in. That’s probably the biggest danger for retailers, especially those that are focused more on acquisition than retention. As Gen Z ages, that day of reckoning will hit — and hit hard.
Forget the generation stereotyping and recognize that what affects one generation has an effect on every other generation.
Show me a Baby Boomer or a Gen Yer or a Millennial that does not want all of the things we say Gen Z wants. Maybe they want it in a lesser amount — but they want the best experience and the most for their money.
Are Millennials finally going to catch a break with an attention shift to Gen Z? I have a real problem with boxing an entire generation into a few broad descriptions. They will be plagued by the same negative titles such as lazy and entitled of generations before them (when they were that age) but knowing nothing other than the digital age will likely make them the most informed and savvy shoppers we’ve seen.
Whenever surveys like this are done, we need to balance any findings with every other age demographic. Even Baby Boomers want “to combine coupons, discounts and a rewards program to get the most traction on their dollars,” etc. What we really need to do is dissect each age group by lifestyles. Not all Gen Z/Millennials/Baby Boomers are alike within their own age groups. Technology adoption is across all ages, and the retailers and CPG brands that gain actionable insights from true lifestyle differences within age groups will capture those audiences.
I have a few articles on Quora, a social Q&A site, relating to my mother’s experience before, during and after WWII as a refugee and another, an interview with a decorated WWII vet. I have close to 1.5 million views and 10,000 likes on a few articles and I regularly see Gen Zers liking stories that have to do with old school sacrifice and duty.
Theory: Gen Z, in the face of infinite options and choice, is becoming more conservative, to combat the time and effort being spent trying to win them over where conservative means traditional values. I don’t know.
I think it’s safe to assume that most characteristics will change when Gen Z grows up and has to juggle budgets, time and real life. Expecting high-quality products at deep discounts and interactive in-store shopping experiences are not always realistic. Especially in the more rural areas of the nation where there will always be fewer options. Although Gen Z will say it’s preferred, the reality is that it’s just not accessible and online purchases will be the norm.