Gen Z: What Retailers Can Learn From TikTok
Gen Z is fast becoming a key audience for retailers. Contrary to older generations, Gen Z, who are aged 16 to 24, are digital natives and have grown up with the internet as a large part of their world. They're incredibly tech-savvy, and have a spending power of over $140 billion.
This would make them ideal consumers. However, recent reports show that Gen Z spending has hit an all-time low, with the share of teens that plan to visit a store within the next six months expected to continue declining. This calls for retailers to urgently rethink their strategies if they want to stand a strong chance of reaching this type of consumer in the long term.
It's no secret that Gen Z love social media. 2019 data from GlobalWebIndex revealed that young people aged 16 to 24 spent an average of seven hours per day online — three of which were spent solely on social media. Considering that 60 percent of TikTok’s audience is Gen Z, it’s a perfect platform to reach this vital demographic.
With growing trends like livestreaming and social commerce continuing to gain momentum, TikTok has been investing more in making its app shoppable. Recently, TikTok hosted its first shoppable livestream in collaboration with Ntwrk. The livestream was organized to showcase a limited-edition fashion collection designed by artist Joshua Vides. Consumers attending the event on TikTok Live had early access to the collection, which for the first time could be purchased directly through the TikTok app.
This worked well — not just because Gen Z are already on TikTok, but because it blended entertainment with the shopping experience seamlessly, proving its worth as an effective means to engage a Gen Z audience and inspire them to make a purchase.
Learning From TikTok
TikTok’s prowess in blending entertainment with the shopping experience can also be adapted to traditional e-commerce as well as store-based initiatives. This can be done by focusing on more experiential offerings to entice shoppers to explore the store, engage with products, and stay for longer. This can range from having high-quality videos, imagery, and livestreaming of events online, to gamified experiences in-store.
Another way of attracting younger consumers is building a differentiated proposition to competitors. This could involve curated offerings like collaborating on exclusive product ranges with brands, particularly those that are trending among the younger demographics, such as those that are related to pop culture.
We’ve already established that Gen Z love to be on social media. Retailers should recognize the growing opportunity that social commerce presents to influence product awareness. In fact, 97 percent of Gen Z consumers use social media as their top source of shopping inspiration. In order to harness these platforms effectively, retailers should evaluate the features and consumer base of different social shopping platforms, identify relevant partners, and create appropriate content to drive engagement and traffic.
Finally, retailers should focus on ensuring the shopping experience is as frictionless as possible. Much like scrolling through your TikTok "For You" feed, shopping today is fast paced. Ensure you're offering consumers flexible options across all aspects of the shopper journey, from browsing to payment and delivery. This can have a long-term impact and increase the chances of a customer shopping with you again and again.
Jack O’Leary is senior retail insight analyst at Edge by Ascential, a leading e-commerce provider, helping over 600 brands and retailers to win in the e-commerce-driven world.
