The current generation Z has a buying power of $143 billion, and this number will only be increasing over the next few years.
Catering to this generation is one of the main priorities for retailers who want to expand their target market and remain relevant in the coming years. But many retailers are still trying to understand how the generation Z mind thinks and shops. What are their preferences? How do they like to shop? What do they value? In this post, we want to cover some ways to adapt your retail store to the new generation.
What is Generation Z?
The generation Z are those people that were born between 1996 and 2015 and are now just graduating high school and university. In 2020, generation Z already has huge purchasing power.
This generation is expected to make an even larger impact than their parents, and by 2021 will make up 40% of total consumer shopping. They still have enough influence on their parents and overall household spending, which explains why they make up such a huge percentage of consumer spending. In general, they are a generation that is said to have higher expectations and is more demanding. They are consumers that are more likely to self educate, shop online and be loyal to brands and retailers that identify with their values. So how can retailers cater to this new generation?
1. Offer more experiences
The Gen Zs are not as price-conscious as their parents or grandparents. They know that experiences are more valuable than material things and prefer a unique and interesting event over material consumption. Having said that, they prefer not to pay full price for something if they don’t have to (like all generations).
One good way to adapt this to your retail store is to offer your customers a unique and interesting experience that adds value in some way. Instead of plain consumerism, your retail store can offer a shopping event that is memorable and encourages shoppers to return. There’s even a name for this: retailtainment.
For example, Huda Beauty used a retail experience to promote a product launch. They set up a pop-up shop in Covent Garden, and created a sci-fi-like environment that integrated well with their new eyeshadow colour. The outside of the shop is a multi-faceted metallic mass with various geometric shapes, and the inside offered an immersive sci-fi looking make-up station. The entire experience was to show off various galactic and geometric shapes from their new product range, and it succeeded in making the experience quite unforgettable.
Source: https://www.thestorefront.com/mag/huda-beauty-pop-up-covent-garden/
2. Get started with personalisation
Thanks to Big Data and large tech companies, the Gen Zs are consumers who are used to personalised products. They are regular users of Facebook, Netflix and Amazon, companies that offer highly personalised products and services. This means they also expect similar levels of service with other brands.
Personalisation is very important because it helps build trust with the customer. This customer is then more willing to share their data, which helps make services even more personalised, which then further reinforces trust. Research shows that consumers are more willing to spend money on a brand they identify with. In fact, according to a review of millennials and Gen Z, 32% would like to receive personalised deals based on previous purchases.
Personalisation can seem pretty overwhelming to get started with, but a tool like Recash makes it incredibly easy. By integrating with Recash, you can offer your customers cashback and then offer personalised discounts to reward your best customers on specific items. This helps build customer trust and encourages them to purchase more.
3. Offer an omnichannel experience
Survey after survey has demonstrated that the Gen Z still value brick and mortar stores and in-person shopping. However, they also want technology to be part of their experience. This could mean something like learning about a product while browsing in-store. Or using QR codes to return an item instead of having to print the label. Or even having the option to purchase an item from their social media account.
This generation wants digital incentives, coupons and expect retailers to be up to date with technology. They prefer paying online to waiting in a queue, and are a big fan of mobile payments and completing transactions from their phone.
Delivering an omnichannel experience is a great way to stand out because it’s a feature that not many retailers offer yet. As a retailer, you can start offering an omnichannel experience by being present on social media and making your website mobile-friendly and easy to browse. You can also install a location tracker to offer specific discounts if your customers are detected in your store.
The generation Zs like convenience and speedy checkouts. According to research, 75% of consumers around the world said they would be interested in using an app to research a product before making the purchase - and 74% said they would use the store website. It seems that all generations that want an omnichannel experience.
4. Build values
Finally, the generation Z is a sector of the population that cares about corporate social responsibility. They like brands that have values, a mission and commit to solving environmental issues. Being a retailer with ethical values helps build loyalty with the new generations. According to a survey by Fashion United, over 80% of millennials and generation Zs consider the social and environmental practices of a company to be as important as their financial results. They value transparency, authenticity and results.
As a retailer, you can implement this by making sure every one of your suppliers engages in ethical practices and follows strict regulations. You can also go the extra mile by choosing to source items locally, making an active effort to reduce your carbon footprint or committing a percentage of your profit to charity. Publish your values and mission on your website, and make an active effort to meet them.
If you’re a retailer in the midst of creating a new marketing strategy targeted at younger generations, consider implementing a cashback programme to get started with. With cashback, consumers don’t pay full price for a product (which they like), but it doesn’t reduce the quality of the product itself. It’s also a great tool to personalise specific services; as a retailer, you can offer discounts to your best customers, and even target your competitors’ customers.
The generation Z will have the most amount of buying power in a few years, so it makes sense to start catering to them earlier rather than later. As a retailer, you can start by making technology more of a priority, having a social media presence and offering some sort of personalised products. And with a tool like Recash, it’s risk-free: we only take a percentage when you’re actually making sales!