It’s no surprise that the shopping habits of Gen Z during the pandemic will predict the near future for retail. Gen Zers are currently the largest and most influential generation of shoppers in the U.S., and COVID-19 has had a serious impact. We are already seeing that 46% say they plan on saving more of their earnings over the next five years, and 63% are currently concerned about the impact of COVID-19 on their ability to make money. This adds up to a new outlook on finances for Gen Zers who are already taking a more careful approach in how, when and where they spend.
Like the Millennials who came before them, Gen Zers opt to spend on memory-making experiences over physical things. Yet they face an immediate future devoid of festivals, concerts, sporting events and, to a lesser extent, time out at bars and restaurants. 49% of Gen Zers say they will change their purchasing behaviors as a result of our “new normal,” and the majority say they will avoid events entirely until lockdowns are lifted or a vaccine is available.
In this shifting environment, where will Gen Zers direct their dollars, and how can retailers respond? Here’s what research has shown:
Give Gen Zers A Voice
As a generation that’s extremely connected, Gen Zers want to be heard and provide their feedback. For retailers that are reformulating their customer experience during these times, they should tap into Gen Zers to share feedback, ensure new offerings are meeting actual needs and de-risk initiatives along the way. If you’re thinking about opening your brick-and-mortar location, ask and encourage your customers to express their expectations and concerns for shopping in person. Understanding what customers are comfortable with during this time — social distancing rules, safety procedures and more — will ease the transition and provide insight for the future.
Double Down On Building An Integrated Mobile Experience
At a time when mobility is part of everyday life, the digital customer experience has never been so important. 50% of Gen Zers say they’re shopping online more now than before the pandemic, and 34% say they will continue to shop online post-pandemic. But we know they want to get back to shopping in-store. More than half of Gen Zers prefer in-store shopping to online. As we begin to reopen our physical stores, Gen Zers will expect to move seamlessly between physical and digital worlds.
In-store and online shopping experiences will need to mirror and complement each other, and they will need to incorporate social media. More consumers today are discovering brands and products on social platforms, which makes omnichannel marketing so critical. While integrating through all channels can be an initial challenge, it’s now a part of doing business that creates memorable experiences and fosters loyalty.
Provide Options And Flexibility
Almost half (48%) of Gen Zers say they want tools that allow them to customize products and experiences. This type of flexibility extends to how they purchase those products and experiences. Gen Zers are still shopping during the pandemic, but they are showing a clear aversion to credit and debt. Unlike other generations, Gen Zers expect flexibility in payments. They are used to being able to customize almost anything and they expect that in how they pay as well.
The COVID-19 lockdown already has led to a range of consumer behavior shifts. Online shopping always has been preferred by younger generations, but now is the time when retailers will see a significant impact on their business models. As we begin to transition to the “new normal,” the most progressive merchants are tapping into what influences and guides Gen Z’s purchasing decisions — listening to the needs of their customers, homing in on digital and giving customers flexibility.
Nick Molnar is Co-Founder and CEO of Afterpay, an innovative digital platform that offers interest-free installment plans for online purchases. Named one of Australia’s fastest-growing fintech companies by IDC, Afterpay offers a “buy-now, pay-later” service that does not require shoppers to enter into a traditional loan or pay any upfront fees or interest. Earlier in his career, Molnar worked as an investment analyst at venture capital fund M.H. Carnegie & Co., where he was primarily responsible for growth-stage investments. He holds a bachelor’s of commerce degree from the University of Sydney.