Take a look at this demographic profile. This group of consumers:
- Prefers a physical retail experience over online shopping.
- Loves physical goods over experiences.
- Likes paying with cash.
- Is by far the least loyal to brands.
- Are less physically active than other generations.
What would you guess? Baby Boomers?
No, it’s Gen Z, and this demographic insight is coming from an interesting new report from GWI, an excellent source of market research.
Gen Z, our next generation consumer, will soon rule the world … and perhaps they already do. At 32 percent of the world population, they will represent the majority of the workforce by 2030. They are the first digitally-immersed generation and already have an outsized voice in taste, culture, and civil activism. They know they can change the world and they’re on the march.
Let’s take a deeper look at this report and some of these non-obvious trends.
Loving the mall
Let’s start with the seemingly obvious: Gen Zs spend almost all of their time online, so surely they’d be most eager to shop online as well? Not true.
The next generation consumer may be digitally immersed – in fact, they spend more time on social media than any other generation, and they’re the first truly digitally native age group. But when it comes to their shopping experiences, they’re more likely to prefer physical settings.
One of the reasons is that they love to gather in places with friends to document their shopping experiences to take selfies.
Preference for products
The fact millennials prefer purchasing experiences over products has become a well-known cliche, and for good reason, as the data show. The generation has given life to the experience economy, which is expected to reach $12 billion by 2023. But while millennials strive for memories over memorabilia, Gen Zs haven’t followed suit.
Gen Z, especially those younger than 20 years old (many of whom are still in school), are more likely than any other age group to say they would opt for products over experiences. They need physical products to display in their selfies, as an example.
Cash, please
Gen Z is an impulse-buying generation and they don’t like credit.
Baby boomers are the least likely to want to pay with cash of all generations, a behavior that applies to all global regions. In fact, as age increases, a preference to pay with cash actually decreases.
Given Gen Z are well-acquainted with online shopping and mobile payment services, their interpretation of “cash” might not be physical per se, but funds that they can immediately access. In other words, these youngest consumers simply aren’t spending on traditional lines of credit.
Less loyal to brands
Gen Zs may be more inclined than older consumers to shop in-store, but they’re also being introduced to a larger list of brands online. They’re the most likely generation to discover new brands on digital channels, from social media to ads on websites and apps, and they’ve become much less loyal to brands as a result. A CMO at a large retail brand told me he has research that shows essentially Gen Z has zero brand loyalty. They seem to be immune to discounts and reward programs.
Put simply, brands will have to turn their playbook upside down to hold onto Gen Zs as customers. A new type of marketing will have to emerge. I think the focus will be on real connection and “belonging” instead of “loyalty.”
Fasten your seatbelts
I think these unexpected trends for the next generation consumer are just the beginning.
As I have written, we are entering an era of unintended consequences. It will take a decade or more to discern new behavior patterns forged from the pandemic.
One example is a decline in physical sports. Since live sports leagues were canceled during lockdowns, all this youthful energy was poured into online gaming. There has been a huge decline in active outdoor sports for Gen Z. Watch for a surge in eSports, professional streamers, and massive online tournaments driven by a generation of locked-down kids.
The most important lesson here is to not assume Gen Z will follow the same path as millennials. This is a complex generation forged from ubiquitous free technology, a dangerous and polarized world, and the consequences of a once-in-a-lifetime pandemic. They will seek refuge in safe online communities and organizations that embrace them on their own terms.
A friend of mine who is the CMO of a major retail company said, “Gen Z does not want to be categorized or labeled. I think we have to stop trying to understand Gen Z and simply accept them.”
Interesting times ahead, my friends.
Follow Mark on Twitter, LinkedIn, YouTube, and Instagram. Discover his $RISE create community.
Image courtesy Unsplash.com