Meet the new customer - How Generation Z are fuelling online demand in the UK
The COVID-19 pandemic has been a defining moment in the lives of Generation Z. Most were expecting to graduate, enter adulthood and the workforce but their planned futures have taken a different turn and the effects have been more pronounced with them than with other generations. Graduations, fresher weeks, work experience placements, social events with their fellow students - all been put on hold. But Gen Z is evolving through identity, community, resilience and above all for online retailers, their approaches to commerce. Gen Z shopping habits are shaping the online and retail future and brands need to meet their high expectations. As they return to university in the UK at the end of September there is renewed hope for this hard-hit but resilient group of young but driven people.
Generation Z - Shaping the future of online shopping
How are Gen Z bucking the trend when it comes to online purchases and building a resilient future?
Gen Z will be the next generation to make their mark on the consumer journey and represent a significant opportunity for all brands. Understanding how this audience thinks and acts can give brands a head start. Generation Z are tech savvy, knowledgeable, and have stronger purchasing power than in previous generations and expect an efficient and service driven consumer experience (CX). They have never known a world without smartphones or the internet and demonstrate heightened independence and technological mobility. So, who is Gen Z? They are the latest generation, and while it is often unclear where this generation begins and ends, many experts would agree that they consist of young adults up to the age of 24.
In March 2021 Mastercard research revealed that there was a 43% rise in social shopping since the pandemic began as Brits turned to Facebook, Instagram, and TikTok to shop. Most interesting of all is that online fashion purchases dominate with all generations, but it is social media targeted adverts and influencers that drive Gen Z fashion purchases who are right at the forefront of this social media revolution. The power of social media cannot be underestimated in attracting and keeping Gen Z customers while encouraging them to check out through online shopping carts for a retail therapy fix.
A staggering 92% of people surveyed who shop socially stated that they had bought items via Instagram, followed by Facebook at 39%, YouTube at 22% and TikTok at 20%. Retail outlets both online and on the high streets cannot afford to alienate Gen Z and must keep up with online trends and use social media platforms at the core of their branding and sales strategies. Influencers and tailored ads play a significant role in the lives of Gen Z with 24% purchasing from links on their favourite influencer sites citing that it saves on the headache of browsing. While a strong social media presence is essential in attracting this technologically advanced generation it is also essential to match their expectations with the new realities of the world they find themselves in.
The eco-friendly and “always-on” generation looking for hybrid shopping options
Gen Z care about whether the brand they are purchasing is one they can be proud of and in the UK, they are 1.4 times more likely to pay a premium price for online eco-friendly products (Kantar Micro-Shifts Monthly Tracker - May 2020). There is a real originality to this generation and Gen Z and sustainability go hand in hand. According to research by McKinsey and Company Gen Z wants to breathe new life into corporate responsibility. They are looking beyond tangible products and trying to figure out the modus operandi of the companies they are purchasing from. What makes them tick and what are these companies trying to build for us in society?
But while the “always on” generation show no signs of letting up when it comes to online shopping, the post-pandemic landscape is likely to look different for a generation that has been subjected to restrictions, lockdowns and where the pause button has been on repeat in their once active lives.
According to Vogue Business while the majority of Gen Z prefer to research online for products and services they view visiting the shops as a social excursion. 81% surveyed stated that they preferred to shop on high street stores with over 50% citing that it provided a stress valve from being constantly connected to social media and the digital world. (Kearney Survey). Tech innovation and socio-cultural movements are also shaping Gen Z’s shopping habits and brand expectations. The line between online and offline has always been blurred and Gen Z are the “always on” generation and looking at social media platforms every few minutes is second nature to them. How do brands and retailers cater to these needs and the new hybrid realities?
In the post-pandemic hybrid reality, retailers will need an omnichannel strategy to cater to new and existing customers whose shopping habits have radically changed since the onset of the pandemic which has ushered in a new omni-channel era. Consumers might discover a product while browsing through a high street shop but usually purchase from their mobile devices. Picking up the product from the curb side has become the new norm for many shoppers who buy online and collect from outside the store for convenience and to maintain social distance. But with the longing for social contacts after a difficult year the return to the high street might provide a tantalising alternative. How can retailers stitch these online and offline behaviours together? There will be a great need for them to fully integrate their front-end engagement platforms and apps with their back-end inventory and payment systems to cater for the needs of Gen Z. Focusing on one aspect of the shopping experience may not pay dividends as Gen Z looks for more hybrid and sustainable ways to shop.
Gen Z has very clear demands. Vogue Business research shows that they are looking for easy navigation, payment and personalisation especially when it comes to instore shopping. Of those surveyed 37% cited that the ability to quickly and conveniently navigate the store was their number one priority followed by facilities to make quick and easy payments (31%). But ignoring other generations in favour of the upwardly mobile can come at a cost.
Ignore the baby boomers to your peril
Both retailers and online outlets still need to be aware of all their target audiences as the sands shift when it comes to consumer behaviours across all generations. If we compare Gen Z shopping habits to Baby Boomers while Gen Z and Millennials dominate online shopping, Baby Boomers have demonstrated the largest shift to e-commerce since the start of the pandemic in the UK with their contribution to online shopping increasing from 25% to 37%. What the pandemic has revealed is that both generations share a preference for shopping online, but the pandemic has seriously limited the options for the consumer attracted to the high street. Will they return? Lisa Kalscheur, CMO at Kibo knows that the younger generations were already massive online shopping fans before the pandemic and shifted even more towards digital channels from March 2020, but Baby Boomers have embraced the online shopping world as well and retailers now need to unify the customer experience both offline and online like never before. Both genres of consumer are seeking reliability, convenience and modern ecommerce options. The role of shipping comparison websites such as Packlink is crucial for customers looking for reliable delivery options that ensure the speedy delivery of goods and services in the fast paced online shopping market. Shipping services must also be tailored to meet the needs of Gen Z, Millennials, and Baby Boomers Comparison shipping websites must be at the centre of integrated shipping solutions to meet customers expectations and of course to enhance the CX.
Gen Z are influencers: they can make or break a brand
Ignoring Gen Z’s behaviours and needs can seriously damage the reputation of a brand. Their social media reach with many Gen Z influencers can make or break a brand depending on the level of service, CX and the quality of the product. They are resilient and innovative as they return to the old norm but with renewed priorities as their lives have been stalled. We have seen how powerful their voices can be on many social issues such as the climate debate. Can retailers rise to the challenge of this tech-savvy, well informed, and active generation? Yes, if they realise that Gen Z are not just defining the future, they are the future.