Generation Z is no longer comprised of children with no buying power, and they are entering the consumer market with new behaviors and demands for retailers. Keep reading to learn more about who Gen Z is, what Gen Zers’ consumer behaviors and preferences are, and how your retail business can appeal to their needs and convert them into customers.
Who Is Gen Z?
Generation Z is particularly impacted by the proliferation of smartphones and social media throughout their entire lives.
Gen Z is the world’s second-youngest generation, born between the years 1997 and 2012, and comprises nearly 60 million people in the US alone. While some are still children, the older portion of the generation is upward of 25 years old—just starting to earn money and enter the consumer market as a real force.
Aside from their consumer behaviors, Gen Z is defined by their skeptical mindset toward ideologies and the mainstream, preference toward independent thinking, prolific use of social media, high anxiety, deep sense of empathy and acceptance of differences, focus on money and entrepreneurship, and an entire life span marked by smartphones and internet cultures.
Gen Z Consumer Behaviors
Now that you have a general understanding of who Gen Z is and its defining characteristics, it’s time to focus on how they behave as consumers. From there, we will look at how you can appeal to Gen Z based on their consumer behaviors and preferences, so you can turn them into customers.
They’re Informed
As a generation that has been largely defined by the internet due to its massive presence throughout their entire lives, a large part of Gen Z’s consumer behavior is defined by their proclivity to do research and make informed purchases only. They have the entire web at their disposal and they are versed in how to utilize it for their benefit—including in their purchasing decisions.
Before making purchases, Gen Zers will compare their options, research user reviews, examine product features, and evaluate alternatives.
They Lack Brand Loyalty
Another marked part of Gen Z’s consumer behavior is their lack of brand loyalty. As a result of constantly having tons of buying options, it is difficult to turn Gen Z into repeat customers and to make them loyal to any brand. Gen Z’s aversion to brand loyalty is also related to their skeptical nature and their inclination toward independent thinking.
They’re Deal-driven & Pragmatic
Gen Z shopping habits are also marked by their constant desire to find a deal and their pragmatic consumer sensibilities. While still young, Gen Zers prioritize financial stability over impulse purchasing and won’t be as easy to sway with flashy merchandising strategies.
Brand Ethics are Key
Gen Z are conscious buyers in lots of ways including in terms of brand ethics. Due to their high empathy and economy of choice, Gen Zers will prioritize brands that embrace environmental consciousness, diversity, and other qualities that align with their ethical values. In fact, 80% say they are likely to base their purchases on a brand’s mission and 74% admit they are likely to boycott brands for crossing ethical lines that go against their personal values.
They Want to See Realistic & Diverse Representation
Not only do Gen Zers want their brands to have ethical environmental and social practices, but they also expect them to show diverse and realistic representation in their advertising. In fact, they will actively seek out brands that are inclusive and diverse in their marketing and will avoid those that are not.
Social Commerce Is Huge
As a result of social media being ingrained in their lives since the day they were born, social platforms (especially TikTok and Instagram) are a primary source for brand discovery and product research.
Mcommerce Is Homebase
Mobile commerce (mcommerce) is all ecommerce activities that occur on mobile devices, including smartphones and tablets. Driven primarily by Gen Z’s emergence into the workforce and, subsequently, the consumer market, mcommerce is anticipated to account for more than 43% of US ecommerce sales in 2023 and to just fall short of 50% in 2027. With smartphones and tablets in their hands from the time they were infants (cue the iPad kids), Gen Z has a strong preference for shopping on their mobile devices over desktops and laptops.
Share of shoppers who engaged in mcommerce in the United States as of July 2022, by age and device
The younger generation is driving the rise in mcommerce. (Source: Statista)
CX Expectations Are High
As a result of all the brand choices that Gen Z has at their disposal through the internet, they have little tolerance for a bad customer experience (CX) and have higher expectations than other generations. In fact, studies from retail and customer experience experts found that Gen Zers are less satisfied with their current customer experiences, with just 50% satisfaction compared to 71%–72% for previous generations. They expect expediency, customer-focused policies, and transparency more than ever before.
They Expect Retail Personalization
Retail personalization is the process of collecting user data and behaviors in order to provide them with a personalized shopping experience, typically through the use of artificial intelligence. including custom product recommendations, segmented marketing initiatives, and other personal touches, like birthday rewards and personalized sale alerts.
While retail personalization technology is still developing, Gen Zers expect it to be a part of their shopping journey. In fact, 57% of Gen Z believe in the power of personalization and 45% say they expect it from brands.
They Embrace Digital Wallets
With nearly the entire generation having a smartphone in hand, digital wallets, like Apple Pay and Google Pay, have grown increasingly popular among Gen Zers. In fact, Gen Z is the most likely generation to adopt digital wallets as their primary payment method for shopping (91%) and traveling (86%). Not only that, 78% said they’d stop shopping at a merchant that didn’t accept digital wallets.
They Utilize BNPL Consistently
Across the board, BNPL is growing to be competitive with credit cards for credit spending, and Gen Z is no different. (Source: PYMNTS)
Gen Z is no stranger to buy now, pay later (BNPL) customer financing with 23% of Gen Z already using some BNPL service. In fact, a study from PYMNTS found that they are spending more with BNPL services than they are with their credit cards by nearly 10%.
How to Appeal to the Gen Z Consumer
Gen Z purchasing behaviors are ones that retailers will have to adapt and appeal to as they become a greater share of the consumer market. Here are the strategies that your business should adopt to be prepared for the Gen Z consumer and to continue to stay competitive.
Be Transparent & Informative
As a product of growing up with the internet and having all the information they could ever want at the tips of their fingers, Gen Z is more skeptical and information-driven than any group we have ever seen in the retail market. Before they make almost any purchase, they are researching both the product and the brand. Be sure you have product and brand information ready for them and leave no questions unanswered so they don’t feel suspicious of your product or intentions.
Incorporate BNPL Services
Gen Z expects retailers to offer financing options, even for small, everyday purchases. Be sure your site and POS system are ready to meet these demands by integrating buy now, pay later services for both in-store and online purchases to help boost conversions among Gen Z.
Learn more about BNPL and how you can offer it at your business with our guides:
- 6 Best Buy Now, Pay Later Apps for Small Businesses
- What is BNPL? Small Business Guide
- 24 Buy Now, Pay Later Statistics
- How to Offer Customer Financing in Four Steps
Offer Modern Payment Options
As we saw, Gen Z loves their digital wallets and has grown up in a world where tap-to-pay is nearly ubiquitous. They have grown to expect these forms of payment and many will leave their homes without a physical card or cash and will still expect to be able to purchase things from the stores they visit. Be sure you are ready to offer modern payment options including Apple Pay, digital wallets, contactless, and tap-to-pay so you don’t leave Gen Zers optionless and forgo sales.
Create a Sense of Value
Gen Z is prone to doing tons of research before they purchase to ensure they are getting the best price and that your offering is the best value on the market. Be sure that you create a sense of value by choosing a compelling pricing strategy and that your product offers something extra—whether that be an ethical bent, an added feature, or something else that will set it apart from the market.
Adopt a Loyalty Program
With all the options on the market and their inclination to do tons of purchase research, Gen Z is elusive, and turning them into repeat customers is a challenge. Create incentive to continue choosing your brand by adopting a loyalty program that rewards them for spending with you.
Read about loyalty program technology, how to start your program, and ways that you can structure it for success with our guides to:
- How To Create a Customer Loyalty Program
- Best Customer Loyalty Program Software
- Customer Loyalty Program Ideas & Examples
Add Social Shopping Options
A huge portion of Gen Z purchases happen on social platforms, especially TikTok and Instagram. They grew up with social media constantly being part of their lives, so this makes sense—it’s a shopping channel they trust and feel comfortable using. Be sure you are ready to capitalize on social commerce’s potential by bolstering your social media presence and adding shop pages to your profiles.
Adopt a Brand Ethic
Another way that you can appeal to Gen Z’s consumer habits is by adopting a brand ethic, especially one that has an environmental or sustainability mission. With all the brand options on the market, a company that stands for something philanthropic is often the defining factor that makes Gen Z choose you over the others.
Ground Your Marketing in Realism & Representation
Gen Z is not allured by airbrushed models and unrealistic images of perfection. Instead, marketing that appeals to them is grounded in real-life portrayals that normalize flaws and celebrate imperfections. They also seek wide representation, from race, to gender, to ethnicity, to ability. As you are devising your marketing initiatives, be sure you appeal to these sensibilities and keep things realistic and full of diversity.
Kickstart your retail marketing efforts with our marketing guides.
- 18 Retail Marketing Strategy Ideas to Drive Sales in 2023
- Retail Marketing Calendar: Guide and Template
- Social Media Marketing for Small Business: Guide + Template
- Retail Mobile Marketing: Creating a Strategy to Drive In-store Sales
- Ultimate Guide to Email Marketing for Retailers in 2023
Bolster Your Customer Service
Again, as a result of all the options at their disposal, Gen Z does not tolerate poor customer service and will abandon your brand for another if they have a bad experience. Work on bolstering your customer service by meeting new retail CX trends, incorporating ecommerce chatbots onto your site, and providing transparent and accessible policies to your customers.
Prioritize User-generated Content
User-generated content or UGC includes everything from user reviews on your site, user product demos, and word-of-mouth promotion from real-life users. This form of product reviews is extremely important to Gen Zers, with 61% saying they prefer UGC over other content formats. It is huge for garnering Gen Z’s trust and for making them choose you over the other options. Add review sections to your site, send products to influencers in exchange for honest reviews, and reward referrals to start building your UGC.
Frequently Asked Questions (FAQs)
Click through the questions below to get answers to some of your most frequently asked Gen Z consumer behavior questions.
Gen Z wants brands that are ethical and transparent, create a sense of value, and offer strong customer service, modern payment options, and retail personalization.
Gen Zers are more conservative with their spending habits than millennials and puts a strong emphasis on brand ethics. Gen Z is also more inclined to do a lot of research and price comparison whereas millennials are more impulsive.
The biggest thing that influences Gen Z’s purchasing decisions is the sense of value and that they are getting the best deal among all the buying options. They also put a strong emphasis on brand ethics, product quality, and good user reviews.
Gen Z wants brands to be environmentally ethical, to use realistic marketing tactics that prioritize diverse representation, and to be transparent in their business practices.
Bottom Line
Generation Z is hitting the consumer market with new sensibilities and desires that retailers will need to meet in order to stay competitive. They are more ethically driven, informed, and technologically savvy than any group we have seen before and expect retailers to meet them where they are or face extinction. With the guide above, you can gain a stronger understanding of who the Gen Z consumer is, their behaviors and preferences, and how you can adapt to turn them into customers.
