Retailing in the Gen-Z Era

Dive In

In the near future, Gen Z is going to represent the largest cluster of customers in retail and eCommerce, after millennials. A large majority of Gen Z individuals are now already adults and active shoppers. It only makes sense for retailers to understand the needs and aspirations of this generation. In this pursuit, retail brands and businesses must also understand that Gen Z is a different generation from their predecessors on multiple grounds and nuances. This is a generation that saw smartphones and the internet from a young age. As adults, these technologies went on to become a way of life for them. They expect brands to make use of technology for delivering services. They see brands and products as an extension of their identity and values. They want brands to be agile on social media, which they vehemently use for staying connected with the world. In light of these emerging trends and developments concerning the next big customer base, retail brands and businesses cannot afford to stay lagging. This blog highlights 10 such areas where retailers must focus on to begin aligning their businesses with the needs and aspirations of Gen Z.

Mobile-First

While millennials got exposed to smartphones, the internet, social media, and online shopping at a later stage in their lives, the generation that came after them landed straight upon these developments or from a very early age.  We are talking about the Gen Z – people born between 1997 and 2012. They epitomise the true ‘digital natives’. The internet or smartphones are not just any tools for them, but it is the way of life for a large majority of them.

Retailers must understand that for this generation, shopping via mobile is their default choice. ECommerce shopping websites and apps have to be optimised for smartphones – it is not their expectation but a staple requirement that they should not even be demanding. This covers intuitive navigation, faster loading and downloading speeds, multiple payment options, relevant content, omnichannel integration, ability to share and connect, transparency, etc. For startups with owners from this generation, it should not be difficult to understand these contemporary requirements. However, traditional businesses seeking to modernise and adapt to these developments might find it challenging without having people from the current generation on board.

Omnichannel Integration – Phygital Shopping Experience

Gen Z people started predominantly with online shopping, but they are also conversant with offline shopping; it is the other way around for millennials. Thus, we are living in times where customers are acquainted with both online and offline shopping journeys. They are aware of the benefits of each channel, which was correctly gauged by many retail brands and businesses and started moving towards embracing omnichannel. In the face of the omnichannel benefits to customers, the generation factor begins to fade out. For example, BOPIS is a feature that is as convenient to a middle-aged millennial as it is for a Gen Z individual in their mid-20s.

However, Gen Z plays a stronger role in pushing brands for omnichannel because of the former’s closer association to smartphones and screens and the fact that the entirety of a shopping journey cannot always be confined to digital, or that there are benefits of keeping certain aspects of shopping in physical forms. For example, tech-savvy customers from today’s generation would love to see AR/VR solutions in a retail store.

Store Layout Planning

Gen Z customers are slightly different from customers from the previous era (not undermining the aspect of generational overlapping). Their requirements go beyond the traditional buying-selling relationships. They seek experience, connections, content, and personalisation. They want to see modern technologies at work in retail stores. Many of them might be looking for moments they can capture for social sharing. They expect a store layout and design where they get more than standard products. You cannot force them to navigate with rigid layouts. QR codes are already a thing of the past; it is time to make room for interactive technologies. They do not want to wait in long queues, so think of easy checkout solutions. If you are a gaming store, look like a gaming store. Even if you are a grocery store, you can still keep some Labubus. The bottom line is that, as a retailer, you will have to keep the aspirations of your Gen Z audience in mind without compromising on the fundamentals of store layout design and planning.

Social Search

Social search is on the rise; the growing integration of technologies to support and improve search functionalities on popular social media and communication platforms is a glaring indication of the same. The amount of time spent by younger people on social media is a major driving force behind this development. Instead of using search engines, a strong inclination is seen among the younger generations to use their favourite social media apps for searching and discovering products and brands, tips and solutions, product reviews and recommendations, how-to tutorials, etc. This has compelled almost all major social apps to work on their search features. Also, carousels and shorter videos are quick and easy to cover instead of opening and going through websites that appear on regular search engine results. The incorporation of AI in displaying search results has made getting answers even more effective. All these trends and developments have made it imperative for retailers to revisit their digital marketing strategies and optimise their content for a stronger presence and visibility for social search.

Social Commerce, Social Influence, and Social Influencers

As true digital natives and a massive share in social media usage, Gen Z is significantly contributing to the growth of social commerce. They are not just using social media for discovering products, services, and brands, but also for making purchases by taking the social route.

Among younger generations, it is also commonly observed that sometimes social media content can make users feel the need to buy products being promoted or generate inspiration to look for specific products, which is somehow attributable to such content. For example, bikers who post videos of bike rides may generate an interest among some of their viewers to own such a bike or buy any accessories shown in the content. This is one of the reasons why brands collaborate with social media influencers to promote their products.

For millennials, buying directly from social platforms or relying primarily on influencers might not be a habitual thing, but that is not the case with the younger generations.

Social Proof and UGC (User Generated Content)

What others are saying and sharing on social media has emerged as a powerful shaper of opinions and decisions. People seldom go against the common norms and opinions. For example, if you see some news or content on social media about a brand before you saw or heard anything good about it, it tarnishes the image of that brand in your eyes. If it is believable, you may not dig deeper into it. That content itself serves as proof or evidence for you not to indulge in that brand. The same principle holds when you hear something good. It has become common to see retail and eCommerce brands showcase on their websites what people are talking about their brands on social media. In the same way, highlighting the reviews and feedback of existing customers on eCommerce websites has become equally important. Such content may also show up in search engine results. With Gen Z, social proof and UGC have become even more significant.

Demand for Uniqueness and Exclusivity

Whether it is products, brands, or the shopping experience, Gen Z shoppers seek exclusivity and uniqueness. They see brands they are loyal to and products they use as an extension of their identity. They do not prefer to be clubbed in clusters or meted out with similar mass treatment. This often makes them align more with brands with unique offerings or limited and exclusive collections. They do not want to be seen as passive buyers but as active decision-makers in what becomes a part of their lives. Even when it comes to personalisation and customisation, today’s customers can see through the role of automated technologies in making product recommendations. For the Gen Z and well-aware customers, authentic personalisation and customisation emerge in changes in the final product and services. Otherwise, these two terms are just playing a generic game with individual data sets. AI might bring some improvements, but it is not there yet.

Franchise Management

Today, many brands and businesses operate via the franchise business model. When you are in charge of someone else’s brand name or when you hand over someone else to run a business under your brand’s banner, it is important to manage the mutual affairs with planning and discretion. This has assumed even greater significance in the context of retailing for Gen Z. This generation is more sensitive to the consistency in products and services and the quality of their shopping experiences, as they are attuned to. Suppose that a restaurant chain appoints a franchisee outlet in another city. It is very important for the business owners on both sides to have a solid understanding of the brand persona, target audience, and standards of performance. They must be on the same page both in terms of understanding and execution. Understanding of goals without a roadmap for execution is of little use.

Sustainability, Thrifting, and Circular Ecosystem

Sustainability is emerging as a crucial factor in the world of retail and eCommerce. It can shape or reshape ideas, business models, and operational strategies. Gen Z represents a highly well-informed generation when it comes to broader issues like the environment, gender equality, labour practices, and animal cruelty. Gen Z tends to show ready sensitivity to issues concerning these areas. This can turn into instant acceptance or rejection of brands, often followed by uproar on social media in negative cases. There is also a growing demand for transparency and authenticity, leaving little room for tactics like greenwashing. The growing popularity of marketplace platforms for pre-used products stands as another pillar of testimony of this generation for its inclination towards circular ecosystems. This is a generation that is unlikely to accept ‘luxury’ at the cost of environmental degradation, animal cruelty, gender bias, poor workplace ethics, unethical labour practices, and such factors.

The Final Necessity – Operational Alignment and Precision

Strategies must eventually find the highway for execution. That highway is ‘operations’. In the context of retailing in the Gen Z era, the quality of operations has heightened significance. For example, because there is more emphasis on a mobile-first approach, the IT operations demand strict monitoring and maintenance. If we speak of digital marketing, social monitoring and social listening activities must be on a constant run followed by necessary response actions. For instance, it is critical to have a response plan mechanism to handle various negative situations on social media. When something goes wrong on social, then that is not the time to be developing a response plan from scratch.

The best solution to get a grip over operations is developing and implementing Standard Operating Procedures (SOPs), followed up with SOP-IT integration. SOPs allow defining workflows to a high degree of detail, also covering accountability and responsibility. SOPs can play a crucial role in maintaining enterprise-wide branding objectives in today’s fast-paced retail environment, where the proportion of Gen Z customers is increasing by the day.

Wrapping Up

The internet or smartphones are not just any tools for Gen Z, but it is the way of life for a large majority of them. Shopping via mobile is their default choice.

In the face of the universal benefits of omnichannel to customers, the generation factor begins to fade out. However, the high proportion of tech-savvy customers among Gen Z plays a stronger role in pushing brands toward omnichannel.

The store design and layout must resonate with their requirements and expectations. They seek experience, connections, content, and personalisation. They want to see modern technologies at work in retail stores.

Instead of using search engines, a strong inclination is seen among the younger generations to use their favourite social media apps for searching and discovering products and brands, tips and solutions, product reviews and recommendations, how-to tutorials, etc. Going further, they also make purchases taking the social route. With Gen Z, content shared by others on social platforms and eCommerce sites has become even more significant.

Gen Z shoppers seek exclusivity and uniqueness. They see brands they are loyal to and products they use as an extension of their identity. They do not prefer to be clubbed in clusters or meted out with similar mass treatment.

The quality of franchise management has assumed even greater significance in retailing for Gen Z. This generation is more sensitive to consistency in products and services and the quality of their shopping experiences, as they are attuned to.

Gen Z represents a highly well-informed generation when it comes to broader issues like the environment, gender equality, labour practices, and animal cruelty. Gen Z tends to show ready sensitivity to issues concerning these areas. This can turn into instant acceptance or rejection of brands.

In the context of retailing in the Gen Z era, the quality of operations has heightened significance. With less room than ever for deviations from the promised and expected standards, the best solution to get a grip over operations is developing and implementing Standard Operating Procedures (SOPs), followed up with SOP-IT integration.

About Your Retail Coach

We are a retail & eCommerce consulting marque with 10+ years of service excellence having catered to over 500 clients from more than 25 sectors with a success ratio of over 95%. Today, we have service turnout in more than fifteen countries.

To speak to a retail strategy consulting professional, let us know over a message and we will shortly reach out to you.

For more on retail business strategy solutions, please explore our service pages.