Generation Z Seeks Enhanced Digital Shopping Experience from Retailers

Generation Z Seeks Enhanced Digital Shopping Experience from Retailers

 

Young consumers seek voice-activated ordering, curated subscriptions and automatic-replenishment shopping models

NEW YORK, 2017-Mar-06 — /EPR Retail News/ — Retailers looking to capture share of wallet and brand loyalty from the next generation of consumers – Gen Z – will need to step up their focus on new ways of engagement.  This group is looking for enhanced digital tools such as the ability to purchase directly via visual social platforms including YouTube, Facebook, Instagram and Snapchat, according to new global consumer research from Accenture.

The research, based on a survey of nearly 10,000 consumers across 13 countries, examines the attitudes and expectations of millennial and Gen Z consumers along the path to purchase. The survey revealed some distinct shopping habits and preferences among Gen Z consumers, which make it imperative for retailers to further rethink and redesign their digital shopping capabilities and methods.

Social media is set to become a major direct shopping channel for Gen Z with more than two-thirds (69 percent) of them interested in purchasing via social media directly.  In addition, more than four in 10 Gen Z’s (44 percent) cite social media as a popular source for product inspiration, and more than one-third (37 percent) have increased their use of social media for purchase decision-making in the last year.

“Social media has emerged as a real disruptor in targeting Gen Z shoppers, who are true digital natives,” said Jill Standish, senior managing director of Accenture’s Retail industry practice. “To succeed in this increasingly digital world, retailers must understand Gen Z’s’ expectations, influencer circles and behaviors – especially their social-media habits and how they differ from those of millennials.  If they are spending their time on social platforms, this is where they want to be buying their products.”

At the same time, however, the findings show that retailers cannot afford to neglect the physical store, since 60 percent of Gen Z shoppers still prefer to purchase in-store, and nearly half (46 percent) will still check in store to get more information before making an online purchase. In the U.S., over three-quarters (77 percent) of Gen Z respondents said that brick-and-mortar stores is their preferred shopping channel.

The research also revealed that Gen Z shoppers are interested in new shopping methods. Nearly three-quarters (73 percent) of Gen Z shoppers are interested in curated subscription-type offering for fashion, and 71 percent are interested in automatic-replenishment programs, with an overwhelming majority willing to shift more than half their purchases to a retailer offering this service. Additionally, 38 percent of Gen Z’s are willing to try voice-activated ordering, while 25 percent of them said they can’t wait to use it and 10 percent of them said they are already using it.

“The ability to provide reliable and accurate product delivery and a great consumer experience requires retailers to enhance their capabilities in digitization, innovation and harnessing consumer data. Gleaning insights successfully can increase the lifetime value of each customer,” Standish said. “The fact that Gen Z shoppers are open to new shopping methods is a real opportunity for retailers to secure new consumer data and get closer to this generation.”

Other key findings regarding Gen Z shoppers:

They are all about visuals – videos and pictures. YouTube is the most-regularly used social media platform, cited by 84 percent of Gen Z respondents, while Facebook is still the most-popular social platform for both younger (21-27 years old) and older (28-37 years old) millennials. Two-thirds (66 percent) of Gen Z shoppers regularly use Instagram, compared with only 40 percent of millennials, and Gen Z shoppers are more than twice as likely as millennials to use Snapchat (54 percent versus 38 percent for younger and 22 percent for older millennials).

They regularly turn to their ‘influencer’ circles. Gen Z consumers are more likely than both younger and older millennials to purchase an item due to: what their family thinks; recommendations from watching YouTube videos; what their friends think; and comments on social media. In addition, when shopping online Gen Z’s are usually more likely than both younger and older millennials to: chat with an online sales assistant; check in store for more information; ask friends’ opinions via social media, text or phone; and ask family members’ opinions via social media, text or phone.

They haven’t formed strong brand loyalty. Only 16 percent of Gen Z’s shop at a single store for clothing/fashion (compared with 26 percent of older millennials); only 19 percent shop at a single store for health and beauty items (compared with 34 percent of older millennials); and fewer than 38 percent shop at a single place for groceries (compared with 55 percent of older millennials). In the United States, brand loyalty among Gen Z is even weaker, with only five percent of U.S. Gen Z’s shopping at a single place for clothing.

They are impulsive buyers and willing to pay for speedy delivery. Gen Z shoppers are more likely than millennials to make a purchase because: they just wanted to buy something; they randomly saw something they liked; or it was recommended by a friend or family member. In addition, Gen Z’s crave speedy delivery more than millennials do and are willing to pay for it. In fact, more than half (58 percent) of Gen Z respondents said they would pay more than $5 for one-hour deliveries.

“Gen Z is the next big consumer market and purchasing powerhouse,” said Standish. “Retailers need to invest in the digital tools that will enable them to speak to Gen Z through visuals, collaborate with them across multiple channels and devices, and make them feel part of their brand. Offering services such as crowd-sourcing, customization and hyper-personalization are a must-have capability for reaching a generation that is shaping and commanding today’s digital retail landscape.”

View research infographic here.

Methodology
Accenture surveyed 9,750 respondents from 13 countries across six continents who have shopped both online and in stores within the three months prior to the survey, which was conducted in October and November 2016. Survey respondents were selected and vetted by ESOMAR, which adhered to strict international guidelines for market research. To be included in the survey, respondents must have shopped both online and in stores in [at least] one of the following retail categories: apparel, consumer electronics, groceries, home goods, and health and beauty. All shoppers also confirmed that they access the internet and use their smartphones regularly.

Respondents came from Australia, Brazil, Canada, China, France, Germany, Italy, Japan, South Africa, Spain, Sweden, the United States and the United Kingdom. Respondents belonged to one of three age groups; Gen Z (18 to 20 years), young millennials (21 to 27 years) and older millennials (28 to 37 years) and each of these three age groups accounted for approximately one-third of all respondents.

Note: The Gen Z sample included only consumers between the ages of 18 and 20 because we are not allowed to survey minors.

About Accenture
Accenture (NYSE: ACN) is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions – underpinned by the world’s largest delivery network – Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 394,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.

Contact:

Aleks Vujanic
Accenture
+ 44 7500 974 814
aleks.vujanic@accenture.com

Source: Accenture

###

IBM and NRF study: Generation Z still prefer to shop in bricks-and-mortar stores

Washington, 2017-Jan-13 — /EPR Retail News/ — Despite expectations that the first “digitally native” generation would want to shop online, a new study released today (January 12, 2017) by IBM (NYSE: IBM) and the National Retail Federation found that almost all members of Generation Z prefer to shop in bricks-and-mortar stores. With the global Gen Z population set to reach 2.6 billion by 2020, retailers need to create more interactive engagement around their brands to serve the “always on,” mobile-focused, high-spending demographic, according to the study.

“Generation Z expects technology to be intuitive, relevant and engaging — their last great experience is their new expectation,” IBM General Manager of Global Consumer Industries Steve Laughlin said. “This presents a significant challenge for retailers and brands to create a personalized, interactive experience with the latest digital advances or risk falling behind. This kind of innovation is not linear or a one-time project — it is a new way of thinking, operating and behaving.”

“Just as Millennials overtook Gen X, there’s another big buying group retailers need to plan for, and it’s even larger: Generation Z,” NRF President and CEO Matthew Shay said. “They appreciate the hands-on experience of shopping in a store. With technology constantly evolving but some shopping habits remaining the same, retailers need to be agile enough to serve both needs. Retailers are constantly focused on experimenting with new innovations both online and in-store to remain relevant to evolving consumer demand.”

Released just ahead of NRF’s 106th annual Retail’s BIG Show next week in New York, the “Uniquely Gen Z” study conducted by the IBM Institute for Business Value is based on findings from more than 15,000 consumers aged 13-21 from 16 countries.

Born after the mid-1990’s till early 2000s, Generation Z is the first “digitally native” group to grow up not knowing a world before cellular phones, smartphones and other digital devices. But the study found that 67 percent of Generation Z shop in a bricks-and-mortar store most of the time, with another 31 percent shopping in-store sometimes, indicating that 98 percent of Gen Z shop in store.

The new generation is important to retailers because it has access to $44 billion in buying power, with 75 percent saying they spend more than half of the money that is available to them each month, according to the study. And the generation is demanding: the study found 52 percent of Gen Z consumers will transfer loyalty from one brand to another if the brand’s quality is not up to par. They care the most about retailers getting the basics right, with 66 percent saying product quality and availability are the most important factors when choosing one brand over another; 65 percent focus on value.

The study found 74 percent of respondents spend their free time online, with 25 percent online five hours or more each day. The degree to which in-store sales are influenced by digital is inevitable in today’s shopping journey — and continues to grow. The study discovered a number of insights into Gen Z’s digital habits and preferences brands can leverage to reach them:

  • 73 percent of Gen Z use their phones primarily to text and chat socially with family and friends, but members are willing to extend their conversations to brand relationships.
    • 36 percent would create digital content for a brand, 42 percent would participate in an online game for a campaign and 43 percent would participate in a product review.
  • They have no patience for hard-to-use technology and demand a seamless mobile/digital experience.
    • 62 percent will not use apps or websites that are difficult to navigate and 60 percent will not use apps or websites that are slow to load.
  • Gen Z knows personal information is valuable to retailers, so members want to know how brands are using it and how the information will be protected.
    • Less than 30 percent are willing to share health and wellness, location, personal life or payment information; 61 percent would feel better sharing personal information if they knew it would be securely stored and protected.

The study found that Generation Z consumers like to engage with brands online, especially with those that create an interactive environment where customers can shape their own experience. As retailers develop and engage in such practices, they will be able to capture Gen Z ideas for new products, services, engagement and shopping experiences, the study said. The generation is known to be brand champions both online and offline, especially when brands acknowledge and value their opinions.

IBM IBV Lead Researcher Jane Cheung and STORES Magazine Editor Susan Reda, along with two Generation Z students from the Fashion Institute of Technology’s Fashion Business Management (FBM) program, will participate in a live online discussion of the study’s findings at 11 a.m. Eastern time on Friday. Reporters can watch the discussion at https://zoom.us/j/719741456.

About IBM Institute for Business Value
For more information, http://www.ibm.com/iibv
Download the IBM IBV app from iTunes and Android Market

About IBM Retail
For more information about IBM Retail: https://www-935.ibm.com/industries/retail/

For more information about IBM Consumer Products:  https://www-935.ibm.com/industries/consumerproducts/

About NRF
NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs — 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy. nrf.com

About the Fashion Institute of Technology (FIT)
The Fashion Institute of Technology, a part of the State University of New York, has been a leader in career education in art, design, business, and technology for more than 70 years. With a curriculum that provides a singular blend of hands-on, practical experience, classroom study, and a firm grounding in the liberal arts, FIT offers a wide range of outstanding programs that are affordable and relevant to today’s rapidly changing industries. Internationally renowned, FIT draws on its New York City location to provide a vibrant, creative community in which to learn. The college offers more than 50 majors and grants AAS, BFA, BS, MA, MFA, and MPS degrees, preparing students for professional success and leadership in the global marketplace. Among notable alumni in fashion are Calvin Klein, Michael Kors, Amsale Aberra, Reem Acra, Brian Atwood, Dennis Basso, Francisco Costa, Norma Kamali, Nanette Lepore, Bibhu Mohapatra, Ralph Rucci, John Bartlett, and Michelle Smith. Other prominent graduates include Leslie Blodgett, creator of bareMinerals; international restaurant designer Tony Chi; Nina Garcia, creative director, Marie Claire; and Joe Zee, executive creative officer, Yahoo Style. Embodying the mantra “where fashion meets business,” the Fashion Business Management (FBM) program at FIT is the largest and oldest degree program of its kind in the country. Blending a curriculum of design knowledge and business practices, students study fashion marketing, product development, planning, and fashion management, and can earn a one- or two-year AAS degree, and a two-year BFA degree. Visit fitnyc.edu.

Contact:

Ana Serafin Smith
(202) 626-8189
press@nrf.com
(855) NRF-Press

Source: NRF