Retail therapy has been a refuge for stressed-out consumers since the 1980s, but today, retailers need their own therapy to win over a new breed of Gen Z shoppers. Born between 1995 and 2010, they will represent 40% of consumers by 2020 and wield unprecedented influence on purchases made by both family and a wider community. They are known as Pivotals, Gen Y-fi, Screenagers or Gen Z. But no matter what you call them, here’s how this socially-rooted, on-demand, "curated self " generation is transforming the retail industry.
Demanding Hybrid High- and Low-Touch Experiences
The boundaries between Gen Z’s online and offline worlds are indistinguishable. They are both low-touch, using the internet for research and inspiration, as well as high-touch, with 66% also preferring in-store shopping to be able to see, feel and try on products. This hybrid disposition has brands scrambling to find new ways to engage them with real world experiences that are worth featuring on their social feeds and apps that are fast, visual and ensure privacy. From pop-ups and nimble smaller-store formats to showrooms without merchandise and buy-online-pick up (or return)-in- store, brands like Adidas, Walmart and Amazon are redefining what it means to have a physical location and create experiential moments.
Augmenting Reality
Blurring the lines even further, augmented reality (AR) has become a reality for Gen Z, allowing them to personalize their shopping experiences. Furniture retailers like Wayfair and Ikea have launched new AR apps that allow customers see products in 3D within their space, and then purchase straight from the app. Beauty and apparel giants Sephora and Zara are going beyond virtual makeup trials and dress fittings to digitally trans- form their industries. Sephora’s Virtual Artist is an AR tool that not only allows customers to try on thousands of shades of lipstick, eyeshadow, false lashes and many other products, but it also lets users go through beauty tutorials on their own face digitally to learn how to achieve certain looks. Zara’s AR brings mannequins to life to model seasonal collections by posing, moving, and even talking, and then allows consumers to order directly at the touch of a button or in a local store.
Operating with Equality for All
Gen Z holds brands to a higher standard. Having grown up with a black president, legalized gay marriage, #MeToo and more than half of their peers belonging to a minority group, it’s easy to see why inclusion and individuality are deeply valued by this new generation. And because they view brands as an extension of their personal brand, they expect to see and feel that everyone is represented. Regardless of size, race or gender, retailers need to dismantle the traditional notions of style, happiness and success to reflect equality for all. To put a finer point on it, a recent survey found that nearly three-quarters of Gen Z have purchased or would consider purchasing a brand or product to show support for the issues the brand supports.
The time has come for retailers to become Z-tailers. Their sheer size, influence and $44 billion in purchasing power will continue to renovate retail in ways we can only imagine.
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