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Guest Blog: How Will Generation Z Continue To Shape Retail?

September 6, 2018

 

 

The increasingly instantaneous nature of how the customer likes to shop, purchase and obtain their products has seen leading retailers adopt a similarly ‘instant’ ecommerce business model of delivering products within a one or two-day window - sometimes offering same-day-delivery. The world’s largest online retailer, Amazon, has un-arguably been at the forefront of this shift, catering to the technologically savvy millennials in providing instant gratification.

 

It would be safe to assume therefore that today’s young adults, christened ‘Generation Z’ (those typically born between the mid-1990s and the early 2010s) would have similar retail expectations. Recent research carried out by Fluent Commerce reveals that, contrary to popular belief, younger shoppers are willing to wait longer to receive products.

 

The survey - carried out with over 5,000 shoppers aged between 14 and 24 - reveals that nearly a quarter of respondents would be willing to wait 10 days or more for their products to ship, while a similar percentage (23%) viewed three to five days as an acceptable shipping period. Furthermore, just 5% listed a two-day delivery option as the longest they would wait.

 

The findings also point to a continued preference for in-store shopping experiences, instead of solely using online-only channels, with a quarter of all respondents favouring both choices. Does this, therefore, signal a transformational shift in how the born-in-mobile Generation Z is taking the lead in consuming the shopping experience, somewhat defying the popular belief that they would continue the Millennial preference for a purely online experience?

 

 

Succeeding the millennial generation

 

The answer is a mix of both. It’s likely that the most recent breed of shoppers, frequently defined in some cultures as the ‘mall generation’ and ‘iGen’, have more time to visit physical stores to look at products, perhaps subsequently turning to online channels if the price is more competitive, or if there are more varied versions of that product available.

 

Additionally, Generation Z have continued the Millennial preference of gathering as much information as possible, frequently doing this independently, thanks to the information available at their fingertips. Consequently, they are more likely to want to visit stores in person, to undertake this research on products.

 

This could reflect their enjoyment of the overall customer experience rather than solely shopping around for the best price. Being in-store allows for interaction with other shoppers, greater levels of product personalisation, trialling the products, and the discovery of other related products that may have not been previously considered. Looking at other products is of course still facilitated online; the visual impact of being amongst multiple goods can influence a shopper’s decision.

 

 

[1] https://www.forbes.com/sites/deeppatel/2017/09/21/8-ways-generation-z-will-differ-from-millennials-in-the-workplace/#866a4e76e5e6

[2] https://www.fool.com/investing/2018/06/05/shoppers-fast-shipping-isnt-as-important-as-amazon.aspx

 

 

However, that’s not to say that Generation Z doesn’t like instantaneous in-store customer fulfilment; this has become second nature in how buyers like to receive products, further demonstrating that while they may be seen to be more patient in receiving goods than their predecessors, Generation Z has adopted many of the Millennials’ ‘here-and-now’ preferences.

 

This is also reflected in recent research that reveals that two thirds (66%) expect brick and mortar stores to offer same-day pickup for purchases made online, demonstrating their desire to receive goods as quickly as possible after purchase, showing that their patience with retailers won’t be stretched too far.

 

 

Retailers should maximise Generation Z opportunities

 

It’s clear that the shopping habits of current 14-24-year-olds have driven the wider shift in commerce, across all age groups, from shopping in-store to starting and completing purchases online, or through a mobile device. Therefore, a ‘best of both’ scenario is the ideal option, with physical stores offering instant customer fulfilment, or directing the shopper to its nearest alternative store or third-party location, should the product not be available.

 

Retailers should not, however, rest on their laurels, perceiving Generation Z as a sympathetic, overly patient breed. 40% of respondents said that packages failing to arrive on time was the biggest frustration with shipping, while nearly a quarter (22%) listed tracking websites providing incorrect information as their biggest irritation.

"While Millennials still have the memory of waiting for dial-up internet, Generation Z doesn’t know any different; in fact 92% of them have some sort of digital footprint. As a result, they have high expectations around the digital technology that retailers should be using"

While a certain degree of responsibility for these problems may lie with the delivery partner, retailers must enhance their overall operations and delivery services, offering quicker alternatives to the delivery timeframes offered by online-only merchants, to ensure they do not fall out of favour with the newest breed of shoppers.

 

Learning from recent industry research, retailers should be re-doubling their efforts to appeal to the latest generation of shoppers, offering as many solutions as possible that will increase the speed of customer fulfilment, both through in-store and online channels. Notwithstanding their enjoyment of the brick and mortar experience, with 71% of shoppers preferring to leave a store with a product in-hand, it goes without saying that iGen expects nothing less of retailers than their full commitment to deploying the latest consumer-facing technologies, in order to help achieve this.

 

While Millennials still have the memory of waiting for dial-up internet, Generation Z doesn’t know any different; in fact 92% of them have some sort of digital footprint. As a result, they have high expectations around the digital technology that retailers should be using.

 

Furthermore, research has shown that customers who engage with retailers across multiple channels and touchpoints are driving increased conversion rates, both online and offline, as they have more than one channel to aid in their purchasing decisions. This is crucial in keeping Generation Z on side and fostering increased customer loyalty, through increasingly connected shopping experiences.

 

As Generation Z develops, it’s this instantaneous customer fulfilment that will continue to drive the retail landscape. With the current volatility of the UK retail landscape, retailers should be looking to re-engage with the latest generation to maximise the appeal of both online and physical shopping, ensuring the brick and mortar offering doesn’t fall behind the online giants in providing a personalised customer experience.

 

 

[3] http://www.digitalstrategyconsulting.com/intelligence/2018/08/what_online_shoppers_want_mobilefirst_connected_experiences_and_tailored_offers.php

[4] https://www.forbes.com/sites/deeppatel/2017/09/21/8-ways-generation-z-will-differ-from-millennials-in-the-workplace/#23e52a5e76e5

[5] http://uk.businessinsider.com/heres-why-omnichannel-consumers-are-more-valuable-2017-1

 

 

Graham Jackson is CEO of Fluent Commerce

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