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What brands should know about Generation Z shoppers

Today’s youngest shoppers exercise economic power over their families and communities—and retail and consumer products brands must engage them now.

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Hot on the heels of the ubiquitous Millennial generation, Gen Zers are the next new “crop” of consumers. Disruptive and distinctive, Generation Z (Gen Zers) shoppers are growing up. Relentless technological innovations, challenging economic conditions, and complicated global politics influence their habits, behaviors, and expectations. Despite their young ages, they already hold unprecedented influence over family purchasing decisions and wield enormous economic power of their own.

To better understand how they prefer to engage with brands and prioritize purchase decisions today, the IBM Institute for Business Value (IBV) conducted a global survey of 15,600 Gen Zers between the ages of 13 and 21, as well as interviews with 20 senior executives.

This research shows that Gen Zers already display characteristics and preferences different than those who’ve come before. To prosper tomorrow, retail and consumer products (CP) brands must engage Gen Zers today.

So who are these Gen Zers? Born in the mid-1990s and beyond, they are estimated to be between 2 and 2.52 billion strong.¹ Self-reliant “digital natives,” they socialize, learn, and have fun living in a fluid digital world. Gen Zers are pragmatic and realistic. And perhaps surprisingly, more than 98 percent still prefer to make purchases in bricks-and-mortar stores.²

As Gen Zers begin to come of age, CP and retail brands are already feeling the impact. Not only does this young generation have its own money to spend, but its economic influence extends over both family members and wider communities. Gen Zers’ impact is only going to increase as they mature and become mainstream consumers.

In this report, developed in collaboration with the National Retail Federation (NRF) and the first of a series, we explore Gen Zers’ technology preferences, “cyber-savviness,” and economic influence.

¹“Gen Z and Gen Alpha Infographic Update.” The McCrindle blog. February 4, 2015. http://mccrindle.com.au/the-mccrindle-blog/gen-z-and-gen-alpha-infographic-update. Accessed January 6, 2017; “Generation X vs. Y vs. Z Workplace Edition.” NextGeneration website. September 10, 2015. http://www.nextgeneration.ie/generation-x-vs-y-vs-z-workplace-edition/. Accessed January 6, 2017; Rehman, Asad Ur. “Generation Gap at Workplace & its effect on Organizational Performance.” February 23, 2015. https://www.linkedin.com/pulse/generation-gap-workplace-its-effect-organizational-asad-ur-rehman. Accessed January 6, 2017

² Bernstein, Ruth. “Move Over Millennials – Here Comes Gen Z.” AdvertisingAge website. January 21, 2015. http://adage.com/article/cmo-strategy/move-millennials-gen-z/29657/

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Meet the authors

Simon Glass, Global Retail Leader

Christopher K. Wong

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, Vice President of Strategy and Ecosystem, IBM Global Consumer Industry

David McCarty

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, IBM Consumer Products Industry Leader

Jane Cheung

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, Consumer Industry Research Lead, IBM Institute for Business Value

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