A Closer Look at the Shopping Preferences Some of Today’s Youngest Consumers [Gen Z]
The influence and buying power’s today’s teens and young adults — aka Gen Z — are rapidly growing. Gen Z (born after the year 2000), is expected to become the biggest consumer generation by the year 2020 and members of this generation already account for $29 to $143 billion in direct spending. That’s far from chump change, which is why it’s important that you find ways to engage these young consumers.
For this post, we’ve put together a handful of research-backed insights and examples to help you craft a solid strategy for reaching Generation Z shoppers.
Let’s dive in.
Meet the smartphone generation
Gen Z is often dubbed as the “smartphone generation” and for good reason: they are true digital natives, and most of them have never known a world without smartphones. For this reason, Gen Z shoppers use their devices frequently and for a variety of purposes — including entertainment, communication and yes, shopping.
Research shows that 44% of Gen Z consumers use their smartphones to make purchases at department stores, while 41% use it to buy coffee, tea or snacks. Meanwhile, 33% and 28% use their phones to make purchases at convenience stores and supermarkets, respectively.
Smartphones also play a significant role in keeping Gen Zers on top of their finances, with Nnearly 70% of Generation Z using mobile banking apps daily.
What does this mean for businesses? For starters, if you’re not looking into mobile payments yet, you should consider doing so, particularly if you cater to a lot of young shoppers. Experts are predicting that the use of cash will decrease significantly in the next few years. And as Gen Z gains more spending power, many are expecting mobile adoption to grow even more.
“Four years from now, or maybe three, half of payments will be on [big players like] PayPal, Apple Pay, mobile Visa Checkout and now this new one, W3,” said BlueSnap CEO Ralph Dangelmaier in an interview with RetailDive.
So, talk to your payment provider and inquire about their mobile payment solutions. Payment Depot, for example, supports various payment equipment that allows businesses to support mobile payment such as Apple Pay.
They value “real world” business interactions
One paradox about Gen Z is that while they love their digital devices, they still value face-to-face business interactions. Research from the National Retail Federation and IBM found that 67% of Gen Zers prefer to shop in-store.
As such, it’s more important than ever to create a compelling in-store experience. Whether you’re running a cafe, a hair salon, or a retail store, strive to include unique and share-worthy elements in your location.
One thing that’s quite popular among younger consumers? Instagram-worthy experiences. As digital natives, Gen Z consumers are quick to share their real-world experiences on various social networks.
Because of this, many small businesses are finding success in using Instagram walls or in-store selfie corners. It’s not uncommon to walk into a hip restaurant or store and find an area dedicated photo opportunities.
Instagram-worthy products are also gaining traction, particularly among restaurants and cafes. Gen Zers are much more likely to find culinary inspiration on social networks, so if you’re in the business of food and drink, you need tap into the power social media to get your products in front of these shoppers.
Morning Lavender, a cafe-slash-retailer in Tustin, CA, does an exceptional job at this. In addition to their attractive merchandising and food presentation, Morning Lavender has a dedicated Instagram wall that customers can pose in front of.
They’re big on corporate social responsibility (CSR)
Gen Z consumers are big fans of sustainability. Research has shown that this generation is willing to spend as much as 10 to 15% more on sustainably-produced apparel, and almost three-quarters of 15-to-20-year-olds would spend more on sustainable products, compared to just 51% of Baby Boomers.
This shouldn’t come as any surprise. In addition to being the most ethnically and racially diverse generation in US history, Gen Zers grew up in an age when social and environmental issues have become part of the national conversation. As a result, they are much more likely to support socially and environmentally-conscious brands.
That’s why if you currently don’t’ have any CSR efforts in place, you may want to consider establishing certain initiatives. There are several ways to go about CSR. Some companies have committed to producing their merchandise through sustainable means.
Apparel retailer Reformation, for example, practices sustainability by implementing efficient, eco-friendly and pro-social technologies and practices in their factories. They also recycle 75% of their waste and are working to reach over 85%.
Other companies are taking on charitable initiatives. Take Starbucks, which donates a percentage of their Ethos® water sales to the Ethos© Water Fund in order “to help finance water programs around the world.”
Now, this isn’t to say that you should suddenly start a foundation or revamp your manufacturing practices in the name of sustainability. Small to medium businesses have plenty of opportunities to get involved in CSR efforts. Some examples include:
- Choosing to do business with socially-conscious vendors
- Playing a bigger part in enriching your local community
- Hiring from underrepresented populations
- Adopting environment-friendly practices like using energy-efficient equipment and recycling waste
Once you have your CSR initiatives in place, communicate them with your customers. The Small Business Administration recommends promoting “your CSR wins on social media, in your email newsletter, or with clients face to face.”
Take a cue from Rescue Me Candle Co, a shop that sells natural soy wax candles, which donates 20% of their proceeds to animal rescues. Rescue Me constantly finds ways to share their CSR wins on social media. Aside from posting regular photos of their progress, the company dedicates special Instagram Stories to their giving efforts.
Generation Z is poised to take the business world by storm, so it’s high time to start preparing. If you’re planning to win over these young shoppers, you need to take steps to ensure that your business is ready for them. ,