Gen Z, roughly defined as anyone born after 1997, has grown up with social media, smartphones and 24-hour entertainment since they were born. Millennials too had much of this technology around them as they entered their teens. As the disposable incomes of these tech-native, always-connected generations grows, the impact of their shopping habits is having a greater effect on the retail industry.
With many in-store shopping experiences frozen in time for the last 20 years, it’s not surprising that these younger consumers are shopping conveniently from their mobiles. The British Retail Consortium (BRC) has even called 2019 the worst year on record for high-street retailers.
Gen Z and millennials are hitting the “buy” button at work, on holiday or while on the move during their commute. While the younger generations are leading the charge, these early adopters are also influencing the mass market. 82% of parents in the US admit that their children influence their purchasing decisions.
Saving the high-street
But all is not lost for brick and mortar retailers. A survey by A.T. Kearney found that US consumers aged between 14 to 24 overwhelmingly prefer to shop in physical stores. The survey also highlighted that retailers need to be more mindful of customer service and shopping experiences.
This was echoed with our own research shows that that younger shoppers are now ready and waiting for retailers to implement innovative payment methods and in-store technologies to improve their shopping experience, but brands are yet to catch up.
So, what behaviors do retailers need to look out for and adapt towards?
Intelligence gathering shoppers
You’ve heard of researching in-store and buying online, but we’re now seeing shoppers researching online and then shopping in-store to get their desired product straight away. Half of all consumers, not just younger generations, say they are now using their phones while in-store to research their purchases, and that doing so enhances their shopping experience.
Retailers need to pre-empt this and assist customers, by joining the dots between the physical store and the digital world. Wirecard research has found that 75% of consumers globally have said they would be interested in using an app on their phone to research a product before a purchase is made in-store. Most consumers (74%) have also said that they would use the store website on their phone prior to purchase.
Cash is no longer king
Younger generations crave speed and convenience, and are subsequently shunning cash for digital payments. Most (35%) mobile wallet users fall into the 25-34 age bracket, and 61% of Gen Z consumers worldwide use their phone to purchase products online.
More than older consumers, young shoppers expect to be able to pay using their preferred payment methods no matter where they are. This means it not only pays for retailers to accommodate the latest payment methods that domestic consumers are using, but foreign ones too. In one Wirecard case study where Alipay was accepted at the checkouts in Munich Airport departures and arrivals, average spending by Chinese tourists increased by about 92%!
The ‘social shopping’ phenomenon
Generation Z spends longer on social media each day than Millennials (nearly three hours compared to two hours and 39 minutes). Marketplaces, ‘buy now’ buttons and payment tech are increasingly being integrated into the social media platforms creating an entirely new ecosystem.
But looking beyond the obvious e-commerce integration, social media is also enabling consumers to share their latest purchases with friends, create a buzz, and potentially score the brand a new customer through their endorsement. As there is a higher degree of trust between friends than retailers, this is a lot more powerful than showing them ads.
Ensuring that the physical store is ‘social-friendly’ is a great way of encouraging shoppers to interact with a brand. This can be anything from displays and backgrounds that make great backdrops, to interactive screens, mirrors and VR tech. These elements can all improve the experience, offering new ways to browse and pay which they’ll want to share with their friends.
Wirecard recently unveiled the 360° Retail Experience, which is a multi-touch screen equipped with capacitive object recognition. Shoppers can take an item from the store, for example a sneaker, place it on the screen, and be presented with various features including hyper-personalization, social media sharing, and instant checkout.
With consumer shopping habits changing, retailers must be prepared to put in the work to ensure they’re keeping up to date. Generation Z will be instrumental in shaping a world where shopping and paying comes with zero hassle or deliberation – whether that’s over a mobile app, via a digital assistant, on a social media site, or at brick-and-mortar locations. The power now lies in the hands of the consumer; they’re now fully in control of where, when and how they shop. It’s up to retailers to adapt.