Gen Z’s spending power is estimated at $143 billion, and is only going to grow. As a result, understanding the Gen Z (those born in the mid-90’s to mid-2000’s) mindset is becoming a critically important component of ecommerce success. So, after much discussion about the shopping habits of Millennials, it’s now Generation Z’s turn in the spotlight!
One would expect all the generalizations about Gen Z to be reflected in their shopping habits, particularly their online shopping behaviors. Characteristics like impatience, short attention spans, and instant gratification spring to mind. It is because of these preconceived notions, that marketers have been preparing for an all-digital, instant-delivery generation who want it all, right now.
However, perhaps marketers have been jumping the gun, as this doesn’t seem to be the case. We’ll look at Gen Z’s complicated relationship with ecommerce, and provide some key insights for those in the industry to better engage with this generation.
Reports show that Gen Z-ers – as opposed to Millenials – prefer physical goods to experiences, and they are more than happy to spend: 40% of them would choose to spend a $1,000 gift certificate on apparel and accessories, compared to just 23% of Millennials.
These statistics should mean that ecommerce businesses are in for a bonanza. But it seems that Gen Z actually prefer shopping in physical stores, rather than online. According to Profitect, 42% of Gen Z-ers prefer to shop in actual physical stores, rather than online. A further 34% prefer to shop in-store and online equally, while only 23% prefer to shop online exclusively. This is a seismic shift for the ecommerce industry. After all, these are today’s customers and tomorrow’s big spenders. We’re talking about nothing less than the future of ecommerce.
There are multiple reasons for this. As Professor Robert Conrad of the Manhattan-based LIM College puts it, “The younger members of Gen Z may not have credit cards to purchase online. They also want instant gratification. Yet the main reason is that they enjoy visiting the malls, seeing people, socialising and being with their friends.”
What about the giants? How are ecommerce powerhouses like Amazon faring?
In an article for Forbes, Walter Loeb outlines some key challenges for Amazon, the learnings of which are applicable to all ecommerce businesses.
Key Amazon (and ecommerce industry) value propositions are convenience and cost. Gen Z shoppers have both time and disposable income. They are looking for an immersive, omnichannel experience, rather than a buy-and-go one.
Furthermore, Loeb notes that Amazon is failing to meet Gen Z-ers where they’re hanging out: on social media. “The product experience is exposed through social media. People are asking for opinions and recommending products to one another on that platform…They don’t see it offered by Amazon.”
Is this the end of ecommerce as we know it? Not quite. It’s clear that ecommerce needs to add value beyond price and convenience in order to draw in Generation Z shoppers. A big part of this is offering an omnichannel experience, one where the shopping experience is holistic and becomes a very real part of these young shoppers’ lives.
Ecommerce businesses are going to have to work harder to engage and retain this generation. The payoff will most certainly be worth it. These are tomorrow’s loyal customers and brand ambassadors.
Winning back Gen Z, and winning in the omnichannel environment, means leveraging multiple data points to provide a full shopping experience. Assets like AI, and a partner that provides actionable insights, are becoming mission-critical.
To find out more about winning Gen Z over to your brand, get in touch with Market Beyond. Join the biggest names in the world of ecommerce to get the intelligence and insights you need to win back Generation Z.
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