Gen Z is set to shake up the retail market just like millennials did when they first acquired their purchasing power. Gen Zers ages 16 to 21 in the US spend an estimated $143 billion a year, according to a 2018 report from Barkley, which defined the overall cohort as 7- to 21-year-olds. (This does not include the money spent on Gen Z by parents or the indirect spending influence they have on overall household spending.)
Gen Zers have never known a life without the internet, so figuring out where to reach them and how to sway their purchasing decisions can be difficult for retailers that have just gotten into the swing of targeting millennials.
We took a deep dive into the research about this generation and came up with the top four things retailers need to know about them.
They l-o-v-e love Amazon
Gen Zers have the (digital) world at their fingertips, and they expect retailers to operate with the same speed and convenience as smartphones do. Amazon fits that bill, so it is no wonder that 64.3% of 18-to-24-year-old females polled said they bought clothing on Amazon in the past six months, according to a November 2018 survey by CPC Strategy. A little under half of those females said free and fast shipping was the No. 1 reason for clothes shopping on the platform—a key detail that retail operations teams should be aware of.
The need for speedy delivery has maintained high importance among customers; 58% of those ages 18 to 20 said they would pay more than $5 for 1-hour deliveries, per multinational data from Accenture in 2017.
But they prefer shopping at brick-and-mortar stores
Despite all the Amazon love, over two-thirds of consumers ages 13 to 21 surveyed by the National Retail Federation (NRF) said stores were their preferred purchasing channel. Much like teens before them, the habit is born out of a desire to spend time with friends. Of the 1,000 18- to 24-year-olds surveyed by Comscore in November 2018, 44% said that shopping with friends was their reason for going to stores.
Instagram and Snapchat are in, and Facebook is most definitely out
Another reason Gen Zers like to spend time in stores is so they can post their experience on Instagram or Snapchat—retailers can be sure they won't be posting about it on Facebook. While a little over half of 13- to 17-year-olds said they were on the platform, just 10% reported it was the site they used most often, according to Pew Research polling in May 2018. Snapchat takes that honor: 51% said it’s the platform they use most, a Common Sense Media report found. Instagram was second in line to Snapchat; we forecast that 46.1% of 12- to 17-year-olds in the US will use Instagram by the end of 2019.