Gen Z’s and Millennials already account for more than one-third (36%) of total retail spend in Australia and they are fast becoming the dominant consumer group in the country. 

BigCommerce’s latest Global Consumer Report highlights the key demographic differences between Gen Z, Millennials and older generations so brands can understand where to focus their marketing and growth plans.

BigCommerce senior director of product management, Jordan Sim discusses the report’s key findings and how retailers can adjust their strategies to capture the attention of these growing consumer demographics. 

“Over the past few years, retail ecommerce sales worldwide have experienced massive growth accelerated by the shift to online shopping during peak pandemic times. Consumers want multiple touchpoints across both digital and physical environments, hence, retail brands will need to make strategic decisions to respond to such behaviours while maintaining a profitable business,” Sim told Retailbiz in a recent interview.

“Our Global Consumer Report has found Millennials and Gen Z’s already account for 36% of total retail spend in Australia, which is set to grow to 48% by 2030. Unlike their predecessors, Millennials and Gen Z’s have a hyper-focused interest in areas such as sustainability, and brands looking to capitalise on this growing segment must familiarise themselves with their shifting consumer priorities.

“For instance, our report shows three in 10 (30%) Australian consumers have used buy now, pay later (BNPL) despite ongoing regulatory processes. We’ve also found these demographics prefer BNPL as it allows them to make purchases fit into their budget following increased costs of living.”

Consumers also want personalised shopping experiences and advertisements. Of those willing to share their data, Gen Z (41%) and Millennials (43%) were by far the most willing, with Gen X (36%) and Baby Boomers (23%) the least willing.

Focusing on brand values, such as honesty and transparency, is another indicator of a recent change in shopping preferences, according to Sim.

“This is a great opportunity for brands to utilise sharing the good things they not only do for non-profit organisations or the community, but also for their employees. Honesty and transparency about business operations can give brands an edge when competing against brands with less favourable reputations, or those who do not publicise their corporate social responsibility efforts,” he said.

The BigCommerce report also shows interest in sustainability has skyrocketed over the past five years, with searches for ‘sustainable brands’ and ‘sustainable packaging’ seeing the largest increase.

Most younger respondents rated sustainability as either ‘very important’ (32%) or ‘somewhat important’ (52%) when making a purchasing decision, brands are encouraged to target a younger demographic to highlight their sustainability efforts throughout their websites and marketing, as Gen Zs and Millennials are more inclined to buy sustainable products than older generations.

“Being transparent about enterprises’ sustainable products — such as where they came from, what was the production process behind it, whether there were any innovative technologies to combat the carbon footprint, and similar, are another recommendation given the green consumer shift,” Sim said.

“Businesses should also consider implementing specific practices, such as only having items delivered on specific days or adding in a ‘sustainability tax’ fee, so consumers can be assured the brand is doing as much as possible to be sustainable.”

Sim suggests doing marketplace research to help determine if your business appeals to two or three generations more than others – instead of trying to appeal to all generations.

“This will narrow down specific marketing resources and generate larger sales from the groups most interested in your product or a service. To do this, you will need to evaluate your unique selling point and match it to interests of each generation,” he said.

“From a know-your-audience (KYU) standpoint, run analytics to understand what percentage of brand engagement and order volume is driven by multiple age groups. Understand where they are discovering and interacting with the brand and where or how they are transacting.

“Using multiple distribution channels is another great strategy for this scenario, as all aged groups will have access to the right channel for them. For instance, older customers might prefer to shop at a brick-and-mortars outlets, while younger customers might prefer online shopping. Additionally, make sure your website is optimised to look good on a computer browser and smartphone, as well as offer alternative payment methods such as digital wallets or BNPL in addition to traditional credit cards.

“To avoid attempting to be everything to everyone and lose customers as a result, create multiple brands to attract different generations. By amending product features, setting a different price, changing your name and packaging, and selling the product in different locations could boost your sales as the business will find the right balance between all age demographics.”