Generation Z


Francesca Nicasio explains why Generation Z is the market to watch for Australian retailers.

While millennials are still a significant consumer segment, there is another group of shoppers gaining spending power and they’re here to take over our high streets—Generation Z. Born after 1995, the oldest Gen Z consumers are only in their early 20s, but their numbers and influence are growing rapidly. According to McCrindle, Australia is home to more than 4.5 million of them.

Who are Gen Z?

How are Generation Z shoppers different from (or similar to) other consumer groups? First, they want to be part of product development. Gen Z shoppers are much more willing to share feedback and product improvement suggestions with brands. This is one of the biggest differentiators of Gen Z from millennials, as the former want brands to cater to them, and expect purchases to reflect their personalities and values.

Of all the consumer segments, Gen Z members are the consumers who trust traditional advertising and marketing the least. This is particularly true when it comes to digital influencers versus traditional celebrities. And here’s something that might surprise you about Generation Z shoppers: to them, physical retail is far from dead. Despite growing up in the digital world, they prefer to shop in-store rather than online. That said, offline shopping should still be aided by technology.

Physical retail is far from dead for Generation Z.

Physical retail is far from dead for Generation Z.

Finally, Gen Z shoppers want to do good. They are concerned about environmental issues, social causes and income equality, and they want their jobs to impact the world.

Here’s how to sell to them.

1. Be real and inclusive

Of all the generations and shopper groups, Generation Z has the least amount of trust for traditional ads and marketing campaigns. These consumers can see right through those perfectly touched-up advertisements, and they’re not impressed. To move and engage Gen Z shoppers, you need to be authentic. Feature real people and stories in your campaigns and build a brand that’s down-to-earth and relatable.

2. Engage through technology

Gen Z-ers appreciate bricks-and-mortar stores, but they also love technology—remember, this generation are digital natives. They grew up with the internet and, unlike Generations X and Y, they know very little about analogue technologies. For this reason, you can’t afford not to adopt technology in your business.

For starters, make sure your young customers can access the internet from your store. Shopping is a social experience and for Gen Z, the ‘social’ component comes in when they can whip out their phone to share an Instagram story or post about their experience on Facebook. Speaking of which, make sure your store is social media-friendly. Create spaces that are snap- and share-worthy; your young customers will thank you for it. You don’t even have to splurge to get this right. Sometimes a witty or empowering sign outside your door can do the trick.

 3. Enable product customisation

Gen Z shoppers love being part of the product development process, so be sure to seek their input when you’re trying to decide what merchandise to sell. Or better yet, why not let them build the products? If it makes sense for your business, enable your customers to build and customise their merchandise. Consider the example of Shoes of Prey, which lets you design your own shoes.

Shoes of Prey lets customers design their own footwear.

4. Consider non-traditional payment methods

If you only accept cash and debit/credit cards, consider expanding to other payment options such as mobile payments. This is particularly important if you’re selling to younger customers. These consumers love their phones and there’s a good chance they already have their payment details stored on their devices. Why not make it easy for Gen Z shoppers to use them?

5. Don’t forget the non-customer-facing tech

They’re not exactly sexy, but the technologies that power your inventory management, point of sale, and reporting are still critical to the shopping experience. Case in point: stock control. Nearly 70 per cent of Gen Z-ers would shop at a store more often if they could check inventory beforehand. This means if you want to win over these customers, you need to make your inventory available online and ensure it syncs with your offline catalogue.

As the first wave of Gen Z consumers begin to graduate from university and begin looking for jobs, the purchasing power of this group will increase dramatically. Make sure you’re thinking about how to meet this new breed of shoppers’ preferences if you want to capture some of this growing market.

Francesca Nicasio is a retail expert at Vend.


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