Imagine the power of a Gen-Z shopper, when the Gen-Z consumer segment has a whopping spending power of over $140 billion fueled by the first set of Gen-Z who are ready to enter the workforce this year.
Retailers must cater to an entire generation of assertive shoppers—be it Ryan Kaji, an 8-year-old You-tuber who unboxes toys and has his own retail empire, or 17-year-old Greta Thunberg whose climate activism is inspiring leading fashion labels all over the world to become sustainable.
Considering Gen Z is going to account for 40% of all consumers by 2020, it’s time retailers form a personalized strategy to cater to the Gen Z shopper.
The Gen-Z Shopper Is Comfortable With Unattended Retail
A recent study revealed that Gen Z shoppers are driving the unattended retail trend—from vending machines, self-serve kiosks to cashier-less stores, they like to shop at their own pace and are comfortable when the entire buying journey remains online. The three primary reasons why they prefer unattended retail—it’s faster (49.4%), offers shorter lines (34.7%) and they can shop without interacting with employees (33%).
64.1% of consumers have expressed their interest in buying beauty products through non-traditional unattended channels and 55.1% of consumers expressed the same about clothing and accessories. Experts believe that unattended retail has realized only 1/10th of its potential and will transform into a huge retail trend in the coming years.
Why Does The Gen Z Shopper Love Experiential Retail?
Besides unattended retail, Gen-Z along with millennials are largely responsible for the growth of experiential retail, social shopping initiatives, and experience economy too. For the Gen-Z shopper, buying is not equal to shopping; they are two independent experiences driven by different sets of expectations.
The brick-and-mortar retail experience is now home to pop-ups hosted by niche and DTC brands, wellness spaces such as spas and self-care kiosks, and social events like a meet-and-greet and community run.
Lululemon’s Chicago store, for instance, is a 20,000 square feet space that houses a restaurant, workout studios, a meditation space, and local business space, besides merchandise. On the other hand, luxury department store Nordstrom regularly partners with DTC brands to create experiential retail experiences.
Striking A Balance Between Experiential & Unattended Retail
Gen-Z shoppers are driving unattended as well as experience retail—both of which are opposite ends of retail experiences. They demand two things—transitory, intimate and comfortable spaces where they can engage with brands in a unique manner and automated tools at the end of the buying cycle to speed up the checkout process.
So how can retailers strike a balance between both? By incorporating technology as the crux of their business model.
For a generation that considers technology a natural extension of their identity, investing in technology is the best way retailers can understand how Gen Z shops and increase their revenue by 180%. Technology is a huge enabler when it comes to automating and personalizing the shopping experience.
For instance, Lululemon relies on data insights to personalize their consumers’ journey and BingoBox entered unattended retail only due to artificial intelligence.
Fashion Retail Via Social Media
The Gen-Z shopper considerable chunk of their time on apps like Whatsapp, WeChat, Snapchat, Instagram, and TikTok.
#TikTok is sending three of its creators to fashion week, in a partnership that signals TikTok’s ambitions for becoming a destination for fashion—and #NYFW’s latest bid for relevancy. @BoF brilliantly explains how TikTok is coming for fashion week here—https://t.co/MinwlX87bG pic.twitter.com/zZ4aznM9CY
— vue.ai (@vue_ai) February 7, 2020
Luxury brands like Cartier and Bulgari use WeChat not only as a selling platform but also as a space to build loyalty programs. With 1 billion monthly users, WeChat has emerged as a viable platform to connect with the new generation. On the other hand, the dominance of Instagram as a sales platform is unparalleled with the advent of shoppable videos and images.
In a BoF podcast, a panel of Gen-Z shoppers shared that established brands and companies can connect with them is by ‘actually listening’ to them and collaborating with them. Point to note: the Gen-Z shopper is not just setting future trends, they also influence their parent’s purchasing decisions. Retailers can leverage this power shift by involving Gen-Z shoppers in the retail experience.