Those poor Millennials. They don’t even like their own moniker, and now they’re in danger of being supplanted in the marketer popularity stakes by Gen Z. As it stands, though, right after (perhaps) becoming the largest generation in the US, Millennials may be ceding their position as the coveted generation for marketers. So what about Gen Z? A new study [download page] from Retail Perceptions offers some insights into teens’ shopping habits.
Based on a survey of more than 2,000 Gen Z consumers (aged 14-19), the study indicates that a majority (62%) prefer to spend their money on an experience rather than buying something material. This may not necessarily be a trait unique to Gen Z, though: other research suggests that Millennials value experiences over material purchases, too.
Nevertheless, almost half (47%) of Gen Z respondents say that they spend money on experiences with friends on a weekly basis. That makes experiences one of the leading spending categories for teens, below only food (80%) and clothing (67%). In fact, food and clothing combine to account for 42% of all spending by teens, according to Piper Jaffray’s Fall 2015 “Taking Stock With Teens” report provided to MarketingCharts, and that combined figure has held relatively steady for at least a few years.
Interestingly, Gen Z can most often be found shopping for these various items in-store rather than online, with 64% of the Retail Perceptions study respondents preferring bricks to clicks. That’s the case for various categories, including food (79% preferring in-store), health and beauty (68%), shoes (66%) and clothes (58%). Games are the only spending category identified where e-commerce is preferred to in-store.
That’s not to say that digital doesn’t have an impact on Gen Z’s retail purchases. For example, 3 in 4 profess to checking a store’s mobile application for special offers while shopping, and two-thirds check store apps for discounts on a regular basis outside of shopping.
Social media – which is having an ever-greater influence on Millennials’ purchases – also plays a strong role in teens’ shopping behaviors. Some 77% of respondents to the Retail Perceptions study say they browse social media to look for ideas on what to purchase, and 69% report having visited a retailer’s store as the result of that retailer’s social media post. Facebook is the clear social platform leader for Gen Z’s interactions with retailers and brands and for product and store reviews, although Pinterest comes a close second for shopping ideas and inspiration.
For retailers looking to make their social content as relevant as possible, the study details what Gen Z prefers they share:
- New products (78%);
- Discounts/promotions/coupons (62%);
- New trends (50%); and
- Upcoming in-store special events (46%).
Other content such as online events (24%), product information, such as sourcing details (19%) and employee recommendations (16%) are less welcome.
While employee recommendations aren’t very appealing, peer recommendations and customer reviews are (much as they are across age groups). More than 8 in 10 teens surveyed say that others’ opinions on social media have led them to shop at a retailer they’d never shopped at before, and 83% say they trust product information shared by other shoppers more than advertising.
That makes Gen Z’s own sharing particularly influential. On that topic, the study indicates that teens are most likely to share product quality reviews (65%) and positive customer service experiences (46%) on social media, with fewer motivated to share a retailer’s diversity of products (23%) or special events (18%).
Finally, the report takes a look at Gen Z’s loyalty to their favorite brands – an important topic given the assumption that marketers must secure this generation’s loyalty while they’re young. The results aren’t terribly encouraging, though:
- 81% will switch from their favorite brand to a similar product at a higher quality;
- 79% indicate their preference is for a quality product, not necessarily a name-brand item; and
- 72% will switch if they find a similar product for a lower price.
You’d be forgiven for thinking that quality is the top brand differentiator, then. But it’s actually not the top factor in Gen Z’s purchase decisions, falling second to price.
Rounding out the top 5 factors are: brand name; social responsibility of the brand/retailer (a growing concern for Gen Z worldwide); and environmentally friendly products.
In other words, CMOs might need to adjust their perceptions of customers’ priorities when it comes to this generation.
About the Data: Retail Perceptions describes its methodology in part as follows:
“In May 2016, Interactions Marketing collaborated with Peanut Labs, a global sampling platform that offers users direct access to tens of millions of consumers and business professionals to conduct a representative sampling of 2,011 members of Generation Z, specifically those between the ages of 14 and 19 years old.”
Some 51% of respondents are female, and the majority (53%) aged 18-19.