How merchants should prepare for the
next generation of shoppers
How merchants should prepare for the
next generation of shoppers
With the Northern hemisphere well and truly in the throes of summer, school holidays are on the horizon. And with those holidays, come merchants' newest generation of shoppers to impress; Gen Z.
These young shoppers have $360 billion in disposable income, more than double what was estimated three years ago. Even though many might still be too young to be employed, they still have a huge impact on the buying decisions of their households.
What does this mean? Merchants need to ensure they are appealing to this generation who have a huge spending power. And in order to appeal to Gen Z, it’s important to understand what they are really looking for. Below we discuss 4 ways merchants can prepare for the next generation of shoppers.
Meeting consumers where they shop:
Merchants need to appear on the platforms and in the places that Gen Z consumers want to visit, and this is the first decision companies need to make.
Some merchants may feel having an online strategy is enough, but it isn’t - especially if it’s an outdated one. This latest generation of shoppers have different expectations and want a convenient and frictionless shopping experience.
With research showing that despite Gen Z growing up digitally native, they actually prefer to shop in store for most purchases, to engage these consumers, merchants need to develop a truly omnichannel experience.
Creating a shopping experience which combines the digital and physical (AKA phygital) can be difficult but by using a combination of data analytics and mobile devices it is possible. Offering a shopping experience where Gen Z consumers can research and review products before purchasing either in-store or online is the best way to appeal to younger shoppers, as it gives consumers the ability to shop the way they want and the way that suit their needs.
The rise of social commerce:
A large majority of Gen Z grew up online and therefore, social media plays a huge role in their lives. With 74.5% of Gen Zers spending their free time online, what they see on social media platforms is going to influence their lives including their purchasing decisions.
Social commerce – the purchases of goods and services directly within social media platforms like Instagram and TikTok – is on the rise, and king among Gen Z shoppers. With an estimated 5 billion social media users worldwide in 2023, the social commerce market is growing faster than traditional e-commerce and shows no signs of slowing down. Forecasts predict that social commerce sales will reach $2.9 trillion by 2026.
“According to research 97% of Gen Zers turn to social media as their main source of shopping inspiration, with 61% of users having bought from brands they’ve seen advertised on TikTok.”
Merchants need to think about being active on social media. Social media can be used to establish their brand, their values and their mission. Gen Z enjoy engaging with brands online, and so merchants who have an online presence can interact with consumers and encourage shoppers to visit their website. Merchants can also sell directly via social media. According to research 97% of Gen Zers turn to social media as their main source of shopping inspiration, with 61% of users having bought from brands they’ve seen advertised on TikTok.
Convenient and frictionless payments:
Gen Z have grown up digitally native, with everything they want just a few clicks away, therefore this generation values convenience, speed and security in their payment methods.
For this young generation of shoppers, e-commerce sites need to be easy to navigate give them plenty of options and tailor to their personal needs. 60% of Gen Z consumers say they will not use apps or websites that load slowly or are difficult to navigate.
Generally, Gen Z are the most open to trying new and alternative payment options, with a strong preference for digital and mobile payments. According to PYMNTS survey, 79% of Gen Z consumers have tried a new payment method in the last year, the highest share across any age demographic. With 48% of Gen Zers abandoning a purchase if their favourite payments method isn’t available, it pays to know what this generation wants.
Merchants need to think about ways to create a smooth checkout process that fits the needs and expectations of Gen Z shoppers and offer the most relevant forms of payments that fit with what these consumers use.
Sustainable shopping:
Sustainability and equity are values that are incredibly important to Gen Z and heavily influence their purchases. Many young shoppers expecting merchants to run their businesses with these values in mind.
According to a study conducted by Depop and Bain and Company, a consultancy firm, 90% of Gen Z shoppers said they have made changes to be more sustainable in their day-to-day lives. While research conducted by Alchemmy finds that 75% of Gen Z consumers make purchases based on their values, compared to only 67% of the general population.
Furthermore, despite the ongoing cost-of-living crisis three-quarters of shoppers prioritise ethics over price.
Clearly, in order to appeal to the new generation of shoppers, it’s vital that merchants think about making their business more sustainable and ethical. Luckily, there are many ways to be sustainable. Companies could plan sustainable sourcing and ensure that your supply chain is socially, ethically and environmentally conscious. Or perhaps businesses could make use of energy-saving technology such as installing solar panels. Introducing eco-friendly packaging is another area of business that companies can aim to be more sustainable and appeal to Gen Z consumers.
The bottom line: These children (and young adults) are the future
As Gen Z continue to enter the workforce and become more financially independent, their spending power and influence with only continue to grow. For merchants its key to stay ahead of the curve and think about how to meet the needs of this growing consumer base. After all, they are the future of shopping!