Despite being the first “digitally native” generation, Generation Z – people born from the late 1990s through 2010 – still prefer to shop in bricks-and-mortar stores, according to a new study released IBM and the National Retail Federation.
Though this generation grew up not knowing the world before cellular phones, smartphones, and other digital devices, the study found that 67% of Generation Z shop in a bricks-and-mortar store most of the time, with another 31% shopping in-store sometimes, indicating that 98% of Gen Z shop in the store.
“Just as Millennials (born between 1980 and 2000) overtook Generation X (born from the mid-60s to early ‘80s), there’s another big buying group retailers need to plan for, and it’s even larger: Generation Z,” NRF President and CEO Matthew Shay said.
“They appreciate the hands-on experience of shopping in a store. Technology is constantly evolving but some shopping habits remaining the same, retailers need to be agile enough to serve both needs.”
The study, conducted by the IBM Institute for Business Value is based on findings from more than 15,000 consumers aged 13-21 from 16 countries. It estimates the global Gen Z population to reach 2.6 billion by 2020.
It said retailers should consider this post-Millennial generation important because it has access to $44 billion in buying power, with 75% saying they spend more than half of the money that is available to them each month.
This generation is also demanding: 52% of Gen Z consumers will transfer loyalty from one brand to another if the brand’s quality is not up to par. They care the most about retailers getting the basics right, with 66% saying product quality and availability are the most important factors when choosing one brand over another; 65% focus on value.
“Retailers need to create more interactive engagement around their brands to serve the “always on,” mobile-focused, high-spending demographic,” the study noted.
The study also found 74% of respondents spend their free time online, with 25% online five hours or more each day. Around 73% of Gen Z use their phones primarily to text and chat socially with family and friends, but members are willing to extend their conversations to brand relationships.
For example, 36% would create digital content for a brand, 42% would participate in an online game for a campaign and 43% would participate in a product review.
They also have no patience for hard-to-use technology and demand a seamless mobile/digital experience. Sixty-two percent will not use apps or websites that are difficult to navigate and 60% will not use apps or websites that are slow to load.
