The Future of Retail
Right now, millenials, also referred to as Generation Y, are the generational group who follow Generation X and are typically categorized as people born between 1980 to the mid-1990s. Millennials are also sometimes referred to as Echo Boomers due to a major surge in birth rates in the 1980s and 90s. Generation Z or Gen Z is the generational group that came after the millenials born between the mid 1990s up to the mid 2000s. Generation Z is also referred to as the igeneration, ijen, or post Millennials. how do these generations compare?
Millennials versus Generation Z: Though these two groups sit side-by-side on the generation ladder, the expansion of the internet and the leaps that have been made with the digital revolution has seen them exposed to a host of different experiences. Add to that the influence of parents from different generations and we have plenty of scope for differences in attitude and behavior.These differences in behavior has led to distinct differences in shopping habits between these generations. These shopping habits will undoubtedly shape retail trends over the next 50 years. We reviewed what researchers have said so we can bring you a list of 10 ways these generations compare and differ, and how it effects retail.
Number 1: Attention span.
Generation z processes information faster than any other generation including Millennials. They live in a high-tech world of constant updates and having grown up with access to apps such as vine and snapchat, their attention span is likely to be lower than that of Millennials. A study showed that while only 4% of Millennials and older generations believe 13 is an OK age for owning a smartphone, as high as 18% of generation Z members think it is an okay age. Time Magazine recently did a study claiming that the attention span of the youth has decreased to 8 seconds, which is shorter than that of a goldfish. Dealing with a shorter attention span can be a challenge in retail. It means customers are likely to spend less times in stores. However, a short attention span can also be used as an advantage. Flashy displays and interactive models can help engage customers and make a sale more likely. Impulse buys at the checkout counter are a great way to tap into a generation with a shrinking attention span.
Number 2: Multitasking.
A short attention span is not always a drawback, and what generation Z lack in focus, they make up for in their multitasking capabilities. Generation Z can work on a school assignment on their computer and do research on their tablet all while taking notes, and in the evening they will often sit in front of the TV watching a movie at the same time chatting with a friends on Facebook from their phone or laptop. According to Business Insider, Get Z uses 5 different screens a day.It’s head-spinning stuff. This multitasking allows sales to be made 24 hours a day, as opposed to just during store hours. Advertisements are viable at any hour of the day since they are being exposed to multiple forms of entertainment throughout the day. Multi-tasking can also be taken advantage of while customers are in your store. Offering coupons online that can be access through a smart phone is a way to engage young customers and makes them more likely to become a recurring customer.
Number 3: Independent versus collaborative.
71% of Generation Z say they live by the phrase “if you want it done right, then do-it-yourself.” Generation Z tends to be more competitive and will adopt a do-it-yourself mindset in personal or professional activities, and when it comes to workspaces, 69 percent of Generation Z would rather have their own workspace than share it with others. Whereas millenials would opt for a collaborative working environment where they can team up with their colleagues. This independence applies to more than just work environment. Gen Z is more interested to being an individual, instead of looking to fit in with a crowd like other generations. This is most relevant when it comes to brands. Millenials are far more likely to be loyal to big brands, especially when it comes to clothing. However Generation Z is more likely to wear, and use lesser known brands in order to stand out and be unique. This is a positive for boutiques and independent stores that offer more unique items as opposed to large retail chains.
Number 4: The digital pioneers.
40% of Generation Z say that reliable Wi-Fi is more important than reliable bathrooms, and according to Pew Research only 14 percent of US adults had access to the Internet in 1995, but by 2014, 87 percent had access. Millenials saw firsthand how social media revolutionized the way in which we communicate. They were pioneers in the digital age, witnessing the birth of smartphones, instant messaging and internet searching capability. Generation Z was born into this tech immersed society and have a very different perspective. Again, this shows how important it is to have an online presence for any retail store. Websites, online stores, Youtube videos, are all things that stores should have in order to engage the younger customer base, and attract them into stores. Gen Z frequently looks up stores online to compare prices, read reviews and ask their friends about products. A study from “Retail Dive” showed that 80 percent of Gen Z purchases are influenced by social media. Having an abundance of information online about your products will make them more likely make a purchase, since they are more likely to purchase something that they can research and know more about.
Number 5: Face to face or digital chat.
All this technology has also had an effect on how these generations differ with communication habits. 74% of Generation Z say they prefer to communicate face-to-face with colleagues in the workplace. As we just mentioned, Millennials pioneered many of the digital communication tools which revolutionized how we do business, but with generation Z preferring a more personal approach, maybe they are the ideal generation to strike the right balance between online and offline workplace communications. This reinforces the claim that Generation Z prefers in store shopping more than millenials. Generation Z is drawn to the overall experience of shopping, instead of just the product itself. Touching the item, and asking a store clerk about the product are benefits that can’t be achieved online. However, once a product is purchased, Gen Z is more likely to share their purchase online. The best way to encourage this type of organic advertising is to create unique, creative products and packaging that are picture worthy.
Number 6: Optimistic vision.
A 2016 survey conducted by Lincoln Financial Group tells us that generation Z is far more optimistic than the Millennials. 50 percent of Generation Z says America is heading in the right direction vs. 42 percent of Millennials. 64 percent of Gen Z have started researching or talking to others about their financial futures by age 13, and after they’ve started having those conversations 95 percent of those making financial plans
feel optimistic about their future in general. This optimism is a major plus for the economy, and especially retail. This confidence in the future means they are more likely to spend money on luxuries and things that they want, instead of just needs. Gen Z is more likely to care about their finances at an early age, since they grew up in a recession. Gen Z has likely seen financial struggle, which has made them more aware, and intelligent with their finances. This is awareness will lead to a healthier economy, and added spending power as this generation enters the workforce.
Number 7: Convenience over brands.
Accenture research tells us that generation Z loves tech driven fast shopping experiences, like one-hour delivery, activated shopping, and in-store kiosks. Brands are less important and they’ll happily switch retailers who are better at providing these services. They see shopping as a social experience, they like to consult friends and get opinions on products. It can be unforgiving when leaving reviews for retailers. They are also twice as likely to consult YouTube than millenials before making a purchase. This is a major point for the retail space. To compete with the pioneers of modern retail convenience such as Amazon, retail stores need to make their store as convenient as possible, and also offer an experience that online stores can’t. Most independent retailers wont be able to offer the low shipping times and other services offered by Amazon. But having a store with a unique, engaging environment can give consumers an experience that is unattainable on a website. If you can draw people into your store for the experience, and not just the product, then you are satisfying a need that even Amazon can’t. Even with great store environment, convenience is still important. Make your store as convenient and accessible as possible by having a clear return policy, self checkout, or anything else to make shopping a smoother experience.
Number 8: Different ways of learning.
75 percent of Generation Z say there are other ways of getting a good education other than the traditional route of going to college, according to sparks and honey research. Generation Z has the beauty of hindsight on their side to see how things panned out for their counterparts. Many Millennials now have large student debts, and have been left questioning whether it was worth it with 44% of recent college grads employed in jobs that do not require a degree. This new outlook on education has been part of the reason the younger generations care so much about company policies when it comes to the environment, and political issues. 55 percent of Get Z give their time brands they consider to be eco-friendly. This can either be a positive, or a negative for your business. If your company is environmentally responsible, it should be advertised. people, especially Gen Z and millenials, want to know that they are getting their products from a company that does the right thing.
Number 9: Tolerance.
Millennials tend to be more tolerant than Generation Z, as they have generally encountered more situations in life where things have the potential to go wrong. For Generation Z it’s all about getting the job done, and problems for them usually mean it’s time to look elsewhere. As an example of generation Z experience a technical hitch when making an online purchase it’s unlikely they’ll visit that store again, whereas Millennials will be more lenient and likely give the store a second chance. Gen Z has been exposed to endless choices and information, which has made them more demanding than other generations. Obviously, it is very important to give every customers a great experience when in your store, or on your website. However, that isn’t always the case. Tech problems and human error make it impossible for every customer to have an outstanding experience. But, what can be done to get past these problems without losing a customer is to offer store credit, free shipping, or any complimentary service to make up for the mistake. It’s important that customers don’t have a permanent negative view of your store.
Number 10: Social influencers are today’s celebrities.
Generation Z is more likely to be browsing YouTube than sitting in a movie theater. 63 percent of them say they prefer to see real people than celebs in their ads. When advertising it is much more cost effective to run social media ad campaigns instead of pricey commercials that people either ignore, or don’t see at all. Social media ads are more effective because they are shown to people who are likely to be interested, and have the capability of being interactive. if a consumer is able to comment or interact with your post, that means more conversations about your store, which means more attention. Instagram is currently the main source of influencers, and advertising through these influencers. Non-Celebrities can build massive followings, usually with a specific demographic, and can advertise products that their demographic will be interested in.