Reinventing Retail: A Look at Gen Z’s Evolving Consumer Preferences
With members of Gen Z now firmly entrenched as consumers in their own right with autonomous purchasing power, brands across various retail verticals must adapt to this generation’s unique customer preferences.
On the surface, this may seem complicated. With the effects of climate change now better understood than ever before, Gen Z demonstrates a commitment to environmental and social causes, and prioritises purchasing from brands with strong sustainability principles. As the first generation to have grown up with unlimited access to the internet and mobile devices, seamless digital interactions are a necessity, but the in-store experience remains highly regarded. Coming of age at a time of economic downturn, Gen Z is pragmatic when it comes to purchases, however still aspires towards luxury.
Although expectations are high and constantly evolving, equipped with creativity, a change-first mindset, and by leveraging the various technology tools on the market today, retail brands are in a good place to cater to this generation and create positive retail experiences. Ahead of the CX Retail UK Exchange on 07-08 July in London, here are some key industry takeaways:
Sustainability Sells
Sustainability is particularly pertinent for Gen Z, with research suggesting that 34% believe brands should be boycotted for failing to act on social and environmental issues. In order to appeal to this environmentally-conscious generation, retailers must both adopt creative solutions to help their customers make greener choices, and communicate these clearly with customers.
Some innovative ways that retailers are integrating sustainability into their brand identity and marketing strategies are:
- Lush is reducing packaging where possible by designing ‘naked’ products. Their messaging encourages customers to reuse containers and they have also introduced a ‘Bring it Back’ scheme allowing customers to return used containers to Lush stores, receiving exclusive rewards in return.
- H&M display their sustainability policy front and centre on their website homepage, ensuring visibility and demonstrating their dedication to sustainability. Their sustainability page is also interactive and user-friendly rather than a simple document or bullet pointed list of actions.
- Patagonia has made sustainability a key part of its value proposition for customers. Its Worn Wear initiative allows customers to bring their clothes back into Patagonia stores for repair, highlighting the brand’s commitment to sustainability and the circular economy while also saving customers money on buying new clothes.
Invest in Yourself: Self-care and Everyday Luxury
Gen Z cares deeply about physical and mental well-being, and this translates into their purchasing habits. Young consumers are likely to spend on things that make them feel good – whether that means foregoing streaming services in favour of frequent, small luxuries like a takeaway coffee or indulgent snacks (so-called ‘Little Treat Culture’), or splurging on once-in-a-lifetime travel experiences.
However, as Tim Chong – CEO of credit card startup Yonder – pointed out in a recent interview with the CX Exchange, brands can use their loyalty programmes to cater to Gen Z’s preferences even if they operate outside of the luxury or wellness markets: “There’s a real appetite for aspirational luxury among younger consumers […] The rewards and experiences we offer our members reflect this – from independent dining hotspots to high-quality wellness brands and experiences. We serve a market that likes to treat themselves with the best in life.”
What’s more, with product and lifestyle trends often popularised through social media platforms like TikTok and Instagram, retail brands could reach Gen Z consumers by partnering with micro-influencers to promote their products or provide followers with exclusive discounts and rewards.
Convenience First: Omnichannel Strategies for Success
While you may expect the first ‘digital native’ generation to make the majority of their purchases online, research from NielsenIQ has suggested that although Gen Z customers frequently begin their shopping journeys online (including on social media), their share of in-store spend surpasses that of previous generations. What’s more, Gen Z look at physical stores in a different way, seeing it as a place of entertainment as much as one of pure purchasing.
Additionally, this generation hugely values friction-free retail experiences and relishes the choice of how they interact with a brand depending on convenience. To remain competitive, retailers must adopt omnichannel strategies, linking up various channels including websites, apps and social media accounts with their in-store experience to ensure they capture as many Gen Z consumers as possible.
You can find all of the latest CX Retail industry updates on the CX Retail UK Exchange website, including the new event guide for the upcoming London event – download your copy here.
