Gen Z consumers have expectations about value, choice, and quality in retail. And technology is only important if it enhances their shopping experience.Download the full reportDownload the infographic
Searching for the optimal shopping experience
Gen Z consumers are full of surprises. On the one hand, they want what their parents want— seamless delivery of retail essentials, such as value, choice, quality, convenience, and availability. On the other hand, as digital natives, they have their own expectations for how they want those essentials delivered.
Technology is important to them, but only if it adds value and enhances their shopping experience. And they expect to be able to make that experience uniquely their own. Brands would do well to act now: while only 36 percent of Gen Z consumers in our study said they had a strong connection to a brand, the number increased to 46 percent among those aged 19-21. The potential benefits are great, but the window of time for winning over this new and important generation is closing fast.
Gen Z consumers are demanding customers—but not in the way you think
Despite their youth, Gen Zers are an economic force to be reckoned with. Born in 1995 or later, they are projected to be 2.56 billion strong by 2020.¹ They have grown up in a fluid digital world in which the boundaries between their physical and online lives have converged. Having 24/7 access to information and digital resources has made them more educated, knowledgeable, and self-reliant in deciding which products and services to choose or brands to support.
Gen Zers expect seamless interaction with brands across the entire digitally integrated enterprise.² They want to actively share their opinions, collaborate, and co-create with brands.
In the process, they expect brands to be highly responsive to their needs. Pragmatic and alert to unfounded hype, Gen Zers also want brands to be transparent, trustworthy, authentic, and relevant.³ Retailers or consumer goods companies must establish an environment of trust when reaching out to this unique generation of consumers.
To understand more about what Gen Z consumers really want when shopping and what brands can do to deliver it, the IBM Institute for Business Value conducted a survey of 15,600 Gen Zers from 16 countries. In collaboration with the National Retail Federation (NRF), we created a three-part report series. In the first two reports, we examined distinctive traits of Gen Zers and what matters to them in their relationships with brands.⁴
In this report, we explore the shopping habits and values of Gen Z consumers and the need for brands to provide:
• Consistent delivery of retail essentials. Gen Z consumers expect accurate inventory information, good value for their money, and a wide assortment of choices when shopping.
• Technology that provides value and convenience. Gen Z consumers appreciate innovation, but only if it can remove friction and empower them to engage with the brand on their terms.
• Individualized shopping experiences. Gen Z consumers want direct value that is tailored to them individually and the ability to co-create an experience that is uniquely their own.
Gen Z consumers have high expectations for retail essentials
As with previous generations, Gen Zers place great importance on dependable and consistent delivery of retail essentials. Their considerations when choosing a shopping channel exemplify this prioritization: survey respondents identified product choice, availability, convenience and value as top priorities when deciding where to make purchases.
And although they are digital natives, they most often choose to shop in the physical store: 98 percent of survey respondents globally said they typically make purchases in a store some or most of the time. In fact, three times as many Gen Zers surveyed said they shop most of the time in a store compared to the number who said they shop most of the time online.
But Gen Zers differ from previous generations in how they expect those experiences to be delivered. They want reliability and consistence whether they shop in a store, through an app or on a website.
¹ Weinswig, Deborah. “Gen Z: Get Ready for the Most Self-Conscious, Demanding Consumer Segment.” Fung Global Retail & Technology. August 29, 2016. https://fungglobalretailtech.com/research/gen-z/ Accessed March 27, 2018.
² Cheung, Jane, Simon Glass, and Christopher Wong. “Uniquely Generation Z: What brands should know about today’s youngest consumers.” IBM Institute for Business Value. May 2017. https://www-01.ibm.com/common/ssi/cgi-bin/ssialias?htmlfid=GBE03799USEN
³ Cheung, Jane, Trevor Davis, and Eva Heukaufer. “Gen Z brand relationships: Authenticity matters.” IBM Institute for Business Value. August 2017. https://www-01.ibm.com/common/ssi/cgi-bin/ssialias?htmlfid=GB912426USEN
⁴ Cheung, Jane, Simon Glass, and Christopher Wong. “Uniquely Generation Z: What brands should know about today’s youngest consumers.” IBM Institute for Business Value. May 2017. https://www-01.ibm.com/common/ssi/cgi-bin/ssialias?htmlfid=GBE03799USEN; Cheung, Jane, Trevor Davis, and Eva Heukaufer. “Gen Z brand relationships: Authenticity matters.” IBM Institute for Business Value. August 2017. https://www-01.ibm.com/common/ssi/cgi-bin/ssialias?htmlfid=GB912426USEN
Meet the authorsKarl Haller, Global Leader, Consumer Center of Competence, IBM Global Business Services
Simon Glass, Global Retail Leader
Christopher K. Wong, Vice President of Strategy and Ecosystem, IBM Global Consumer Industry
Jane Cheung, Consumer Industry Research Lead, IBM Institute for Business Value
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