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/ 1.13.2022 / Operation Educate,Retail Tips and Tricks

The next generation – Gen Z – is coming of age and gaining purchasing power. And like the generations before them, they have a unique perspective shaped by their generational experiences. Already influential in driving their parent’s purchasing decisions, Gen Z shoppers are set to impact the shopping landscape over the next several years. The question is, are retailers ready?

Who is Gen Z?

Members of Gen Z were born between 1997 and 2012 and account for 20 percent of the US population. They are true digital natives because they grew up with the Internet and social media. Plus, the first smartphones launched in 2007, just in time for early Gen Z-ers’ pre-teen years. Today, 98 percent of Gen Z members own a smartphone. 

The most diverse generation in US history, Gen Z is also on pace to be the most highly educated. Their perspective is largely formed by growing up during an economic recession, with many watching their parents struggle as a result of the 2008 financial crisis. When the economic impacts of the global pandemic are factored in, Gen Z-ers are shaping up to be a financially pragmatic group, seeking financial education, opening savings accounts at a younger age, and avoiding debt. Seventy-two percent say they are stressed about their finances, and one in three is already pursuing a side hustle to earn extra income. 

Motivated by security and financial goals, Gen Z-ers expect value, choice, and availability in their shopping experiences, but some of their preferences may surprise retailers. 

3 keys to attract and retain Gen Z shoppers

1. Omnichannel & Experiential

While retailers should expect Gen Z-ers to leverage e-commerce options, that’s not necessarily their only channel of choice. As digital natives, Gen Z shoppers will make full use of the convenience and speed offered by online shopping options. For retailers, that means now’s the time to step up e-commerce and mobile commerce capabilities – most of Gen Z’s online purchases will happen via a smartphone. 

However, Gen Z doesn’t want digital-only relationships with retailers. They’re also seeking an experiential element when they shop. Eight in ten prefer to shop in brick-and-mortar stores, with the majority saying it’s how they prefer to discover new products. Gen Z views shopping as a social event, and immersive, interactive experiences that allow them to touch and test products prior to purchasing are especially appealing. 

Retailers who successfully fuse digital and physical shopping experiences will win with Gen Z. These young shoppers value the ability to seamlessly move from channel to channel, doing online research about potential purchases, comparing prices, and checking availability online; then visiting a store to try the product before making the final purchase. 

Related: Customer Experience Counts: How to Make Your Store A Destination

posim ecommerce guide

2. Choice & Value

Price will always be a primary driver behind financially pragmatic Gen Z purchase decisions, but it’s not just about the lowest price. Gen Z-ers do their research to evaluate the value they’re getting for the price and are willing to pay more for higher perceived value. 

Gen Z shoppers expect retailers to offer a wide range of choices, and 68 percent say that it determines where they shop. They also expect stores to have the inventory available, especially when they’ve checked online in advance. That makes having an integrated point-of-sale (POS) system that tracks real-time inventory across online and offline channels essential for retailers. 

Another way to deliver the choices Gen Z expects is by providing alternative payment options. So far, Gen Z is showing a much lower rate of credit card use. Because of the practical approach to managing their finances, they are more likely to use cash or debit cards tied to a digital wallet in order to avoid debt. Buy now pay later (BNPL) options appeal to Gen Z shoppers because they can split payments up without paying interest. 

Related: Retail Payment Preferences: What Today’s Customers Expect

3. Personalization & Purpose

Gen Z-ers seek the ability to customize everything from the shopping experience through the products and services they purchase. Having grown up with the Internet, they’ve come to expect tailored marketing, promotional offers, and personalized service based on the data available to retailers. Strategic use of the customer data captured through a retailer’s POS system needs to be top of mind for retailers as Gen Z-ers have little interest in generic experiences and will move on to competitors. 

Customer loyalty programs are a good way to personalize offers and rewards for Gen Z shoppers. Sixty-four percent say tailored rewards are important to them, and 65 percent say these types of programs help determine where they shop.

Related: How to Create a Customer Loyalty Program that Works

Along with personalization, Gen Z-ers want to engage with brands that share their sense of purpose and values. Retailers who connect their businesses to a purpose that resonates with Gen Z are more likely to earn their trust and loyalty. Most Gen Z-ers see themselves as socially conscious, and more than half say knowing a brand is socially conscious influences their purchase decisions.

As Gen Z’s purchasing power increases, retailers can prepare by adapting and engaging them today. POSIM is an integrated point-of-sale and inventory management system with the end-to-end capabilities retailers need to successfully attract and retain Gen Z shoppers in the years ahead. Find out which POSIM plan is right for your business and ask us for a demo today.

Caleb Shook

Inbound Marketing Manager

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