The first truly digital-native generation, a population that never knew a world without smartphones, social media, and access to any information at their fingertips, is about to take center stage. Generation Z, born after the mid-1990s through the early 2000s, is coming into its own. Wielding spending power and influence greater than anyone expected, this generation is overtaking the oft-discussed Millennials and has their own unique set of behaviors and expectations. And retailers are starting to take notice.
Last week, IBM announced their new research on Generation Z, findings from a study of over 15,000 consumers aged 13–21 from 16 countries. The research gives retailers and brands insights into these young consumers – insights that will be pivotal to retailers hoping to successfully engage with this group and meet their expectations for technology and personalization.
Read the full press release: Despite Living a Digital Life, 98 Percent of Generation Z Still Shop In-Store
So why now, when most of this generation has yet to reach adulthood? This generation, a population that is on track to reach 2.6 billion globally by 2020, already has access to $44 billion in buying power. And “75 percent of the survey respondents say they spend more than half of the money that is available to them each month.”
Looking at the insights learned, what’s not surprising are some of the behaviors and attitudes of Generation Z. For instance, if you know any Gen Zers, you know that this generation is rarely without their smartphone nearby. This is supported by the finding that “74 percent of respondents spend their free time online, with 25 percent online five hours or more each day.”
And they are willing to spend some of that time engaging with brands online, especially with an interactive experience. However, their last great experience becomes their new benchmark. If the technology is poor quality, difficult to use, or not seamless between their devices, they will not stick around. “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.”
“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.
Those high expectations extend to the brand as well. They will not hesitate to change their loyalty if the brand’s quality is not up to par.
Meeting these expectations will be key for retailers who want to engage with Gen Z. But, currently, many brands are struggling to keep up with rising customer expectations, regardless of the generation, according to the IBM Customer Experience study of more than 500 brands in 24 countries. Specifically:
- Only 19 percent of retailers can provide a highly personalized digital shopping experience
- A mere 17 percent can provide more than in-stock/out-of-stock information
- 84 percent did not offer any in-store mobile services
Retailers must bridge this gap between customer demands and reality – quickly. The research finds that our next generation, Gen Z, demands highly personalized interactions, values quality over price, and wants to be engaged with the brand across all channels.
Be prepared for Gen Z’s shopping trends and get the latest stats by reading the IBM Institute for Business Value executive report, “Uniquely Generation Z: What brands should know about today’s youngest consumers”