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Blending Retail Series Part 4: Generation Z and the future of retail

· retail,retaining customers,2018,growth,blended retail

By Tony Giudici

In Part 1 and 2 we discussed and introduced the Blended Retail concept and how retail is transforming. In Part 3 we looked at the in-store experience, and discussed how retailers have had to adapt and transform. Now, in Part 4 we will look at what Generation Z means to the future of retail.

From Baby Boomers to Generation Z, each group has its own defining political and cultural traits that have characterized their coming-of-age and shopping habits. By 2020, Gen Z will be the largest group of consumers worldwide, making up 40% of the U.S., Europe and BRIC countries, and 10% in the rest of the world. The needs and behaviors of this group will inform not only the next generation of shoppers, but the future of mainstream retail.

people shopping on a busy street

There are currently four major generational demographics that economists have recognized as distinct markets: Baby Boomers, Gen X, Gen Y (more popularly known as Millennials), and Gen Z. Each is unique in their perspectives on marketing tactics and purchasing preferences. Let’s quickly review these groups.

Baby Boomers - Born 1946-1964

The root of Boomers’ brick-and-mortar retail preference is tied to their high expectations of customer service. According to a LoyaltyOne survey on generational consumer habits, Boomers were the most likely demographic to take their business away from retail chains following a subpar exchange with one of their sales associates. When it comes to the joy of shopping, Baby Boomers want convenience above all else.

Generation X - Born 1965-1980

To avoid buyer’s remorse, Gen Xers won’t purchase a product until they’ve researched it thoroughly, which is why they make extensive use of search engines, online reviews, and social media networks before making a purchase. Having any doubts about product performance will easily dissuade them from their buying process. One of the greatest obstacles in the marketing approach to Gen Xers is that they tend to shop more conservatively than other generations. They’re more skeptical about marketing tactics, which means they won’t be won with flashy advertising but with practicality and proof of performance

Generation Y/Millennials - Born 1981-1997

Millennials primarily view shopping as a social activity, a trait that strongly sets it apart from older generations. They see the experience as a fun and relaxing activity to be shared with friends, family and social media. According to the book Gen Buy: How Tweens, Teens and Twenty-Somethings are Revolutionizing Retail, the grand majority of Millennials report that they shop with other people at least half the time, and 60 percent consider advice from their friends when deciding what to buy. Furthermore, 90 percent of Millennials research product reviews online and also tend to rely on other consumers’ reviews on retailers’ sites over those of people they know.

Another interesting fact? Younger Millennials (aged 20-23) on the cusp of Gen Z are more likely to shop in a brick and mortar store when compared to older Millennials (aged 32-35,) who are the most likely within the group to buy via mobile.

Generation Z - Born 1998-2010

By 2020, Gen Z will make up 40% of the consumer retail market in the United States alone. This is a generation of digital natives that can’t remember a time before internet, and as such, the internet has become the foundation of their buying process. Gen Z uses their devices to Google resources to compare prices, styles, availability, and ratings of products to make the most educated purchase possible. Being savvy with price-checking tools also makes Gen Z more selective, often buying products only when they’re on sale or even delaying gratification by waiting for newer products to become available.*

While much of their research is digital, Gen Z still enjoys visiting stores as a social excursion in the same way Millennials do. In fact, 84 percent of Gen Zers intentionally shop as a social activity and will wait to accumulate a solid list of wants and needs before visiting stores with friends (mobile devices in hand, of course).**

Like Gen Y, Gen Z is also likely to contribute to consumer-generated content for brands by voicing their comments and concerns online and by seeking out interactions with brand representatives via social media.

group of teenagers on their phones

Revamping Retail for Gen Z

Now the question remains: How should retailers adapt to capture the growing Gen Z audience in an authentic way? Well, first they should focus on catering to Gen Z’s online expectations by providing consumer-generated content. This is crucial, because not only do these teens respond extremely well to word-of-mouth, but they actively participate in it as well. Sara Spivey, CMO of Bazaarvoice, a network that connects brands and retailers to the authentic voices of people where they shop, claims that 40 percent of Gen Zers give online reviews “very often,” which in turn encourage others within their generation to purchase products. In this sense, Gen Z consumers sharing brand content on social media can easily be considered unofficial brand ambassadors.

Companies also need to understand that technology drives Gen Z’s shopping experience. One way to keep tech-savvy Gen Zers eager and interacting is to establish a strong social media presence and complement that with touch screens in brick and mortar stores.

Additional research shows that other wallet-friendly incentives, such as coupon offers (coupn-love extends throughout all demographic age groups!) are also a great way to bring Gen Zers in store. Considering how Gen Z and Gen Y both still shop both online and offline, and reportedly more so than older generations, retailers need to prioritize enhancing both group's shopping experiences by appealing to their affinity for technology and perspective on shopping as a social and interactive experience. Offline, stores should promote a chic, tech-savvy, communal atmosphere. Online, retail sites should interact with and promote user-generated content to provide a seamless shopping experience across the average Gen Zer’s many juggled web devices.

Another growing opportunity for retailers is to utilize the buy online/pick up in-store process, a newer offering that is trending up in popularity very quickly across all shoppers.

I would be remiss to not quickly comment on store design and relevant insights as covered in Part 3 here too. Gen Zers are attracted to contrast and color before exploring product features, and this extends to the retail environment. Plus, Gen Z shoppers don't look up when browsing— they navigate at eye level. As such, signage is invisible while their focus stays on the product and immediate environment. Also, music signifies 'open for business' while silence suggests closing time. Gen Z also loves to be able to touch and access the product and consider clinical displays off-putting. Once they've made their purchase, Gen Z immediately want to connect with their peers by creating, watching and responding to “Show & Tell” videos. Beats by Dre understands how Gen Z loves to share, making it easy to upload pictures of themselves in their new headphones.

In conclusion, retailers will be able to build lasting relationships with the growing Gen Z market by using the right omnichannel tools, experiential store design and social media engagement techniques. This is a group who continue to seek social and authentic customer service experiences during their buying journey and the companies who best take care of these needs will prove triumphant in the coming years.

Tony Giudici is a Director of Market Development for Excelerate America, a second-stage business accelerator that helps small businesses go next-level in the digital economy. He's love to hear your thoughts on shopping preferences between generations. Just shoot him an email at



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