Shopping habits are often formed in early family years. The generation that experienced the global recession of 2008 will react differently to those impacted by the 1920’s depression (through their parents and grandparents) and a whole lot differently to those who had only limited exposure to economic uncertainty.
When it comes to retail those experiences shape consumers buying preferences and that is why the big retailers are spending so much time and money trying to understand consumers.
One generation is about to have a big impact on market traders and we need to understand them if we want a share of their spending.
We are talking about young consumers born between 1995 and 2012 – Generation Z. This generation will surpass the income of baby boomers in two years time. They will represent 40% of all consumers within 4 years. They are obviously worthy of our attention and they are different to the millennials. Here is a snapshot of their characteristics –
1. Global recession and terrorism have made them cautious and cost conscious.
2. They value experiences, usually with social content.
3. They care about social and political causes.
4. More than half of them shop online because it is affordable. They will be put off by high cost shipping, and if it is possible to offer free shipping, you will maximise your opportunities.
5. They want their goods NOW and will pay a premium for same day service.
6. Millenials also like quick delivery but Gen Z want it quicker.
7. Gen Z are not big fans of “Click’n’collect”. They want it delivered.
8. If “free delivery” is important so are “free returns”. Returning is just an integral component of the shopping service these days and therefore shouldn’t attract a penalty.
9. The counter balance to all the freebies is that Gen Z’s are likely to accept a spending threshold before free shipping cuts in. Free shipping on a $20 product may not be cost effective, but a minimum $60 spend before free shipping kicks in may make the economics look much better.
Armed with modern technology, particularly mobiles, Gen Zedders are increasingly demanding speed and convenience. They are about to become very influential, and every retailer’s strategy needs to factor in their preferences.
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