As the newest generation to enter the consumer market, understanding the shopping habits and behaviors of Gen Z is crucial for businesses looking to engage with this demographic. Born between 1997 and 2010, Gen Z represents a $150 billion annual sales market, accounting for nearly 20% of the U.S. population. It’s a market that businesses can’t afford to ignore.
But numbers don’t reveal the whole picture. What’s Gen Z like as a consumer? What about buying habits? And how does it all impact your e-commerce business?
What’s Generation Z Like?
One of the biggest differences between Gen Z and previous generations is their purchasing habits. This “digital native” generation is 72 million strong in the U.S., with $360 billion in disposable income. Their likes and purchasing habits are shaped by the world they have grown up in, which is heavily influenced by technology and social media.
Highly Social & Influenced By Peers
Gen Z is highly social and influenced by their peers. Over 76% of Gen Z teenagers follow a creator on social media. They rely heavily on recommendations from friends and family, as well as social media when making purchasing decisions. They are also known to be highly skeptical of traditional advertising and prefer to see genuine, relatable content from brands.
Value Authenticity & Transparency
Gen Z values authenticity and transparency. They prefer to purchase from brands that are transparent about their products and practices and whose values align with theirs. They are also more likely to trust and purchase from brands that are open and honest about their business practices.
Gen Z is mobile-first. They are comfortable using technology and prefer to research products online before making a purchase. This means that having a strong online presence, with a user-friendly website and engaging social media accounts, is crucial to reaching this generation. Additionally, they prefer to make purchases on their smartphones.
Gen Z is price sensitive, but they also value quality. For more than 60% of Gen Z shoppers, the quality of products is the most important factor in making a purchase. They are more likely to compare prices and search for deals, but are willing to pay more for products that are of good quality. Gen Z consumers want to make sure that they are getting the best value for their money.
Gen Z shoppers deeply value environmental consciousness. They are keenly aware of environmental issues and want to ensure that their purchasing habits don’t negatively affect the planet and society. They prefer to buy from brands that incorporate sustainable practices and environmentally-friendly products. They also tend to be more conscious of the environmental impact of their purchases, such as packaging and shipping.
What Puts Generation Z Off?
Appealing to a generation’s likes is great, but avoiding things they dislike is just as important to ensuring your business’s success.
Lack of Authenticity
One of the most significant turn-offs for Gen Z is insincerity and lack of authenticity. They are highly skeptical of traditional advertising and prefer to see genuine, relatable content from brands. Retailers and brands that fail to be transparent about their products and practices, or those that make false or misleading claims, are likely to turn off Gen Z shoppers.
Another practice that may prevent Gen Z shoppers from purchasing from a particular brand is a lack of ethical or socially conscious practices. Gen Z is highly conscious of environmental and social issues and prefers to buy from brands that care about them. Brands with poor labor and sustainability practices will not appeal to the Gen Z consumer.
Retailers and brands that use manipulative tactics such as clickbait or those that prioritize profit over customer satisfaction also risk turning off Gen Z shoppers. They value honesty and transparency and want to know that they can trust the brands they purchase from. Retailers and brands that prioritize the customer experience, build trust with Gen Z shoppers, and align with their values will be more successful in appealing to this demographic.
As the most ethically diverse and largest generation in American history, Gen Z’s impact on retail is massive. They are a highly diverse, socially conscious, and tech-savvy generation that values transparency, authenticity, and quality. Alignment with these values will ensure that brands can tap into this cohort.
But what does all of this mean for your e-commerce business? And how do you utilize this information to your benefit?
How To Build A Gen Z Following For Your Business
Experience Is Key
One of the key characteristics of Gen Z shopping behavior is that they value experience over ownership. 60% of Gen Z shoppers find digital presentation more important than in-person presentation.
Live commerce technologies are great for making your business eye-catching for the Gen Z shopper. This shift in presentation from previous generations means that businesses need to focus on creating unique and memorable experiences that are online for Gen Z consumers.
Prioritize Social Selling
Another important aspect of Gen Z buying habits is that they are highly social and influenced by their peers. 80% of Gen Z and millennials have bought a product they’ve seen on social media, which means that businesses need to have a strong social media presence and use influencer marketing to reach this demographic.
Creating shoppable videos for your brand is a great way to build a social presence and attract the new-age buyers. Shoppable videos ensure that you can entertain your Gen Z audience while selling them things they care about.
Gen Z consumers value authenticity and transparency. They are more likely to trust and purchase from brands that have a straightforward approach to their products and practices and resonate with their values.
Businesses need to prioritize transparency about their products and practices and clearly communicate their values to appeal to Gen Z consumers. Being straightforward with your business practices and being clear about how you source materials or function as a business can be instrumental in securing a die-hard Gen Z following.
Gen Z is a digital-native generation, and they are highly comfortable with technology. They are more likely to make purchases on their smartphones and prefer to research products online before buying.
As a result, having a mobile-ready website is not enough. Businesses need to have a mobile app in addition to a website and social media presence to reach this demographic. More importantly, brands and retailers need to learn to use their mobile apps effectively.
Price sensitivity is also a trait of Gen Z consumers. They are known to be more price-sensitive than previous generations, and they tend to look for the best deals. Simply offering competitive prices and offering a wide range of options isn’t enough.
This is where you can leverage discounts that are exclusive to your branded mobile or webstore to drive Gen Z shoppers to your owned channels. Your very own app and webstore will give you more control over what kind of experience you deliver to your Gen Z customers regarding pricing for items, shipping, and more.
Additionally, Gen Z consumers are environmentally conscious and gravitate towards companies that practice sustainability. As a result, businesses should focus on sustainable practices as a way to appeal to this demographic.
Livestreaming can be a great way to give social proof to your Gen Z viewers about the sustainable practices your business uses. You can give your viewers a behind-the-scenes tour and build a stronger relationship built on trust and transparency.
Online Or Offline? Be Both
Even though they are digital natives, Gen Z shoppers like both online and in-store shopping. They enjoy seeing, touching, and trying on products before buying them. This means businesses need to focus on creating engaging in-store-like experiences to attract Gen Z consumers. Live commerce technologies can be instrumental for businesses looking to recreate physical store-like experiences for their online customers.
Entice An Entire Generation
Understanding Gen Z shopping habits is crucial for businesses looking to appeal to this generation. There are several steps retailers can take.
Phygital solutions, which combine physical and digital experiences, can help retailers attract Gen Z shoppers. By offering a seamless, multichannel experience, retailers can cater to Gen Z’s online and offline shopping preferences. By incorporating technology such as augmented reality and multichannel live selling, retailers can provide Gen Z shoppers with the interactive, authentic, and engaging experiences they crave.
Ultimately, brands should look to provide a more personal and unique shopping experience that increases brand loyalty and customer retention among Gen Z shoppers. By leveraging the power of technology and providing an integrated experience, retailers can better connect with Gen Z and drive sales.