How Gen Z and Millennials Are Influencing the Future of Shopping
Despite layoffs and prolonged job searches, Gen Z showed a resilience and sustained interest in fashion and retail this past year — even with nowhere to go. At the same time, millennials demonstrated plans to spend less on fashion as the pandemic continues to place restrictions on our daily lives.
To better understand how COVID-19 shifted the buying behaviors of Gen Z (aged 18-25) and millennials (aged 26-40), Kibo recently partnered with Drapers to conduct a survey of over 2,000 participants, split between these two demographics, to gain insight into what retailers need to do to thrive in 2021 and beyond among these two age demographics. Key insights from this survey include:
Yes, Digital is Leading, But Don’t Count Out Brick-and-Mortar
Since the start of the pandemic, Gen Z and millennials have demonstrated a willingness to shop both in-store and online, opting to utilize each channel based on a different set of benefits. Across both generations, just over a quarter of the participants plan to favor online shopping more after the pandemic subsides, while 42 percent expect to return to their pre-COVID habits — a combination of digital and in-store. Both Gen Z and millennials cited convenience, safety and ease of price comparisons as their main reasons to shop online, but coupled these benefits with the inconveniences of long wait times for deliveries, unpredictability of fit, and the cost of deliveries and returns.
In order to get both generations to lean more towards online shopping, the survey found that consumers are primarily looking for better fit technology and higher quality images. For retailers, this means there's an opportunity to incorporate better photos and videos along with more personalization technologies that can take note of a shopper's personal sizing, style preferences and price points to help them find the right items during the shopper’s first online visit.
The survey also found that if the issues with online shopping were resolved, 43 percent of participants would be “quite likely” to decrease shopping in-store, and 27 percent definitely would stop in-store shopping altogether.
While this may be disheartening to the traditional brick-and-mortar retailer, Gen Z provides a silver lining. This generation cited that they're more likely to return to shopping in person after the pandemic than their millennial counterparts. With Gen Z soon making up 40 percent of global consumers, it's important to elevate the benefits they associate with shopping in-store: fitting rooms, socializing with friends, and browsing for items they didn’t seek out. Improving these aspects will appeal to Gen Z, creating a more promising scenario for the physical store.
For Younger Shoppers, Their Purchases Follow Their Beliefs
It’s no secret that younger consumers shop with their social views in mind. However, coming out of a tumultuous year, the importance of sustainability and inclusive social views has only grown.
The survey reported that a striking 81.7 percent of Gen Z and 75.5 percent of millennials favor environmental sustainability, and 78 percent of both generations believe brands should take a pro-diversity stance. Taking it a step further, members of both age groups reported abandoning a purchase because the brand didn't reflect their values, and 70 percent of young shoppers would pay more for fashion from sustainable or socially conscious brands.
With a growing number of new sustainable brands and socially vocal companies, all retailers should consider publicly aligning their business practices with social issues that matter to their customers. These actions can range from promoting marginalized voices on social media and publicly updating company policies on hiring and inclusion, to increasing transparency of product sourcing efforts and offering more sustainable delivery options.
Social media provides a great outlet for these efforts, especially as Gen Z heavily relied on these platforms to stay connected with one another during lockdowns. The study found that 58 percent of Gen Z respondents made purchases via social media, namely Instagram, whereas only 45 percent of millennials had shopped social. These numbers are increasing from years past, proving that social media can help brands proactively showcase their sustainability efforts and incorporate their values to better connect with Gen Z shoppers as they push forward into 2021.
New Habits and Priorities Lead to New Strategies for Retailers
It will become increasingly more important to reach Gen Z and millennials as their purchasing power continues to grow in the years to come. These digitally savvy generations are ready to adopt new purchasing options, but they also see value and yearn for the nostalgia of their pre-COVID shopping habits. Both Gen Z and millennials value social interactions both online and in-person, convenience from both price and delivery, and societal good across a variety of topics. Retailers that take the lessons from this past year and create the best overarching experiences for these omnichannel shoppers will come out ahead now and in the future.
Lisa Kalscheur is chief marketing officer at Kibo, a cloud commerce solutions provider.