Tailoring retail for ‘Generation Z’

By Rob Cottingham, Credit Director at Duologi.

‘Generation Z’ may well be the most complex shopping demographic yet – with short attention spans and high expectations making it increasingly difficult for retailers to grab their attention.

Given that this demographic already accounts for £32 billion worth of annual spending and is set to be the world’s largest consumer group (40%) by 2020, brands need to start paying attention to these shoppers of the future.

Amidst this backdrop, what can brands do to ensure they regain the trust of this influential demographic and appeal to them both now and in the future?

Unlike Millennials, Gen Z shoppers have been defined as a group that prioritises cutting-edge technology, sustainability and low prices. Hence, it is these areas businesses need to focus on in order to help engage this demographic and boost sales.

With this in mind, let’s explore how the UK’s retail sector can tailor its offerings to appeal to Generation Z.

Reimagine the high street

Despite the rise of e-retail, 73% of Gen Z still prefer shopping in-store. This presents the perfect opportunity for retailers to tailor their bricks-and-mortar shops to appeal accordingly.

One way to do this is by creating fun, memorable in-store experiences. For example, providing shoppers with innovative new technologies like augmented reality (AR) and virtual reality (VR). These features allow retailers to satisfy this group’s ‘tech-savvy’ needs, giving them the competitive edge over less technologically advanced brands.

However, brands need to ensure these technologies do not become a replacement for human interaction. A study revealed that more than half (55%) of Gen Z shoppers think this would have a negative effect on their shopping experience, so retailers must ensure they find the delicate balance between utilising new tech and upholding high-quality customer service standards.

Maximising mobile payment options

Aside from in-store offerings, retailers need to capitalise on the fact Gen Z is the largest group of mobile payment users.

Due to their tech-savvy nature, one way to utilise this opportunity is by presenting shoppers with efficient, trustworthy payment platforms when purchasing instore and online.

However, Generation Z is notably a very budget-conscious group, which could restrict its spending power. Research supports this by stating these consumers shop around for the best deal rather than prioritising convenience.

One solution to this issue is to offer instant, online flexible finance options. These enable businesses to offer services such as 0% interest and buy now, pay later plans. This could be particularly helpful for shoppers wanting to spread out the cost of large ticket items, without mounting interest rates. As a result, consumers may be more open to purchasing products they otherwise would not.

Delivering sufficient shipping services

Another way to attract shoppers of this generation is to offer delivery services that appeal to their thrifty nature.

Contrary to reports that suggest Millennials prefer quick and efficient postage methods, Gen Z shoppers are less worried about the time it takes for a delivery to arrive. Instead, they prioritise cheap shipping options. Research found that 89% of Gen Z stated free postage was a key influence in their decision when making a purchase.

In light of this, retailers should aim to provide at least one free shipping option to help attract these consumers. Such services can sit alongside premium delivery options, for example next-day delivery, which would come at an additional cost. This way, brands have a greater chance of catering to a wider clientele.

Shaping the future

Retailers need to be increasingly mindful of the next generation as their spending power is only set to grow. By tailoring services to these shoppers now, brands have the potential to build relationships with them and secure their custom as they acquire more disposable income.

Given that these shoppers have grown up surrounded by advanced technology, retailers need to provide high-spec shopping experiences that meet their high expectations. By doing this and providing effective delivery and finance options, the retail sector can expect to stay relevant to this new age of shoppers.

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