By Christian Davies, Christian.davies@FITCH.com
Meet the most complex shopper of all time – Generation Z. By 2020, today’s 14-19 year olds (Gen Z) will be the largest group of consumers worldwide, making up 40% of the U.S., Europe and the BRIC countries, and 10% in the rest of the world. The needs and behaviors of this group will influence the future of mainstream retail.
How do retailers and brand owners engage with a new kind of shopper, who pays less attention, but with a sharper and hyper-informed eye? There have been many observations on the lifestyle and digital dexterity of Gen Z, but their shopping habits have remained unobserved. In this article, we clarify Gen Z’s distinct retail behaviors and offers strategies for retailers to attract them with seamless and highly commercial experiences.
Gen Z is not a new species. In many ways, they’re just like the teens of previous generations, with new tools to express their identities, discover new information and influence their peers. Understanding their behaviors – and the ways in which they differ from previous generations – is key to understanding how to meet their needs, today and in the future.
- They live in a constant state of partial attention, logged into multiple platforms across a mosaic world of their own making, but will know about a problem with a product or brand, or a promotion way before you do. They are happy to have a beta product today, with the promise of a better one tomorrow; it will be better because they’ve co-created it.
- These shoppers hop between retailers – physical stores or online destinations – snapping pics and screen grabs as they go, and leaving a trail of hashtags and pins. Gen Z uses multiple platforms instead of multiple devices, and expects constant innovation. In fact, they dislike products that aren’t constantly changing!
- They’re expert messaging filterers. As savvy cynics, they trust their peers, not marketers. Opinionated, connected and influential in the digital realm, they’re also resourceful, looking for a retail experience with opt-in service, two-way dialogue, and mutual rewards.
- They’re as socially conscious as they are brand-conscious; they’ve Googled what your brand’s all about before leaving home, and browse a scrapbook of wants and ideas as they peruse your shelves, all the while getting real-time feedback from friends.
Retail principles for attracting the Gen Z shopper
So how can you create retail experiences that will appeal to “born digital” Gen Z? FITCH distills the essential building blocks of the shopping experience into physical, human, and digital (PHD) elements. A unique mix of PHD elements can help to define a retail brand, and is important to creating seamless retail interactions that make it easy to engage, target different shopper mind states and create distinctive new experiences. The key for Gen Z is to put them at the center of your thinking.
Shift from offering new things to buy, to inspiring new things to do.
Physical: REI incorporates climbing walls in its stores. Very physical, super tactile, it’s a great way to get Gen Z involved, building excitement and footfall.
Human: Kochhaus (Germany) offers a solution to the question “What’s for dinner tonight?” by providing meal suggestions and collecting all the ingredients and information you need for each dish. ‘Foodie’ staff are on hand with tips and advice.
Digital: The Reiss Guide offers up-to-date advice on the best places to eat, drink, sleep, visit and, crucially, shop in cities all over the world, including links to the nearest Reiss fashion store.
Shift from telling your story, to starting a conversation about theirs.
Physical: Lego in-store interactive areas, created by FITCH, get the product out of the box and into play. By encouraging exploration, discovery and fun, conversations are started and stories are told.
Human: Best Buy was the first to use Twitter to actually help consumers. @BestBuySupport is a 3000-strong collective of ‘shop floor’ technology pros constantly tweeting insights in answer to consumer questions.
Digital: Under the headline of ‘Heritage Woven In,’ Fred Perry reveals the brand’s street heritage and invites people to share their own stories and pictures, bringing the famous shirt to life.
Shift from making it perfect before sharing, to making it better with their input.
Physical: The Puma Creative Factory invites buyers to get hands-on in the creative process: “We supply the materials and you supply the imagination ...” and then walk away in the sneakers of your dreams.
Human: Sample Central (Tokyo) offers a bespoke sampling service, allowing consumers to try out brands and products. Visitors may be offered freebies, ‘paid for’ with the valuable feedback they provide to Sample Central.
Digital: ‘My Starbucks idea’ invites coffee drinkers to offer suggestions on how to make Starbucks better. Out of the thousands of suggestions they receive each year, up to 20 are implemented, a great example of the way Gen Z can inform and change large organizations.
Capturing the critical Gen Z market represents a significant opportunity, but you’ll have to sign up for unprecedented change to achieve the seamless retail that will engage these savvy and cynical consumers. One thing is certain, though: doing nothing is not an option. Gen Z is the future. Their shopper needs and behaviors will revolutionize retail.
Christian Davies is executive creative director, Americas, for design and branding consultancy FITCH, Columbus, Ohio. He has worked with a wide variety of brands, including Buffalo Wild Wings, Coca-Cola, Hard Rock Hotel & Casino, Harley Davidson, Lego, McDonalds, Nickelodeon, Target, Tiffany & Co, Timberland, and Volkswagen. He can be reached at Christian.davies@FITCH.com.