Move over, Millennials. Generation Z, the youngest cohort of consumers comprised of those born after 1995, makes up 25 percent of the U.S. population and wields $44 billion in spending power, which is estimated to reach $200 billion by 2018.
Also known as “Millennials on steroids,” Generation Z is poised to disrupt retail as we know it. Here’s how you can engage this influential group.
Physical Versus Online
Despite all of the reports and rumblings to the contrary, Generation Z still prefers to shop in traditional brick-and-mortar stores most (67 percent) or some (98 percent) of the time. That could be because some Generation Z shoppers are too young to have a bank account or credit/card, must-haves for e-commerce. Regardless, they’re visiting stores, and that’s a great thing.
To ensure that their in-store experience is a good one, be sure that you’re effectively leveraging your people-counting system to understand traffic patterns, periods of peak demand and whether your stores are staffed appropriately. Capitalize on Gen Z store visits by giving them something that’s elusive online: great high-touch customer service.
It Takes Two
It’s probably no surprise that Generation Z, the first truly digital generation, loves a personalized, interactive experience. They’re looking for collaborative engagement; they want to participate in the brand experience instead of simply making a transaction.
This could mean anything from writing a product or service review in order to help other consumers or participating in an online game for a brand campaign. Generation Z wants to be immersed in the brand, not merely a bystander.
For brick-and-mortar retailers, serving up Gen Z-ready experiences means building meaningful digital experiences into the store environment. How about a digital display that shows products trending on e-commerce — or, for example, dresses similar to trendy off-the-shoulder number Rihanna wore in her latest Instagram snap?
Even better, look for ways to take advantage of Generation Z’s addiction to their smartphones. Leverage beacons and geofencing to send out push notifications to these young shoppers as they enter your stores, giving them motivation to focus on your brand instead of price matching with competitors. Also consider artificial intelligence platforms and similar technologies that can guide shopper experiences and product discovery in store and online. However, if you plan on taking advantage of beacon and Wi-fi based solutions, make sure you’re pairing them with people counting solutions. Wi-fi and beacon solutions are not granular enough to provide essential retail KPIs such as sale conversion rate and shopper-to-staff ratio. Pairing this technology with people counters will ensure your Gen Z customers have a top notch in-store experience.
Empowered by the information engine that is the modern smartphone, Generation Z easily can find out what your brand is all about and if your products are as good as you say they are. Gen Zers like to spend wisely and get the most for their money — which means that product quality is one of their top priorities. In fact, more than half (54 percent) of Generation Z would drop a brand due to poor product quality. They also don’t have patience for out of stocks so consider optimizing your inventory management to maximize product availability.
Despite their obsession with all things digital, members of Generation Z do consider the implications of handing over their personal data to corporations. However, they’re happy to do so — as long as they have some assurance that their information is stored securely. Don’t risk alienating these shoppers with another headline-grabbing Target-style data breach.
Generation Z may be young but the way these shoppers behave today will influence how you run your retail business tomorrow. By embracing new ideas and digital technologies in store, you can transform your enterprise for long-term success.