White Paper
August 2, 2018, 5:00 PM EDT
Author
Sheila Dreyer Van Buskirk
Vice President, Market Research and Insights
Contributors
Ronda Slaven
Vice President, Research and Thought Leadership
Sue Yasav
Vice President, Thought Leadership
Abstract:
"A new kind of shopper is on the rise in Generation Z, with unique habits, behaviors and expectations. Generation Z will soon become the largest generation in the workplace and marketplace. Brands who get to know them now are destined to be the disruptors of tomorrow."
Bart Schaller, CMO, Synchrony
Bart Schaller, CMO, Synchrony
Table of Contents
This “digital-native” generation still prefers shopping in-store
Gen Z’s preference to shop in brick-and-mortar stores rather than strictly online is a reflection of the importance of the shopping experience to this generation.
While they will spend time researching a product online, this generation of shoppers wants to see, touch and try the item before making a purchase. With online shopping, they say there is a risk of getting something they don’t like and having to return it. As 22-year-old Paige from NYC puts it, “How do you even mail something these days?”
This preference for purchasing in-store spans all retail categories. To satisfy Gen Zs, retailers must provide them with the seamless and enjoyable web-to-store shopping experience they expect. For instance, if they have shoes in their shopping cart while shopping online, they expect to have access to them when they are in the store.
While they will spend time researching a product online, this generation of shoppers wants to see, touch and try the item before making a purchase. With online shopping, they say there is a risk of getting something they don’t like and having to return it. As 22-year-old Paige from NYC puts it, “How do you even mail something these days?”
This preference for purchasing in-store spans all retail categories. To satisfy Gen Zs, retailers must provide them with the seamless and enjoyable web-to-store shopping experience they expect. For instance, if they have shoes in their shopping cart while shopping online, they expect to have access to them when they are in the store.
This “digital-native” generation still prefers shopping in-store.
- 75% Prefer shopping in stores with engaging in-store experiences.
- 64% Prefer shopping in-store vs. Online.
- 45% Nearly 1 in 2 gen zers say the experience of buying something is just as important as the product itself. Similar to millennials and gen x, but higher than boomers.
Top categories for in-store shopping:
- 90% Groceries
- 66% Furniture
- 63% Household items
- 59% Accessories/ shoes
Gen Zers Highly Value the In-store Shopping Experience
Have high expectations for customer service. They want retailers to stand by their products and offer a good return policy. It’s also important that they have an enjoyable shopping experience in a clean, safe, organized store.
Build Merchant Loyalty with Gen Z Now
Leverage Gen Z’s preference to shop in-store with engaging experiences that bring them to the store and build loyalty.
OFFER:
In-store specials Fun experiences Live events
In-store specials Fun experiences Live events
Like other generations, Gen Z loves a good bargain (although they rarely compare prices). Their definition of savings, however, is more narrow than preceding generations. Gen Z seeks savings and discounts at point of sale. They are motivated by sales and discounts instead of rewards or loyalty programs.
Gen Zs are less likely than Millennials to say they are interested in joining a frequent shopper program, partly because they don’t understand the advantages of doing so. This presents an opportunity for retailers to introduce loyalty benefits to Gen Z with rewards they find relevant and appealing.
Gen Zs are less likely than Millennials to say they are interested in joining a frequent shopper program, partly because they don’t understand the advantages of doing so. This presents an opportunity for retailers to introduce loyalty benefits to Gen Z with rewards they find relevant and appealing.
When Shopping, Gen Zers Equally Like:
Gen Zs will redefine the retail industry within the next decade. Ethnically diverse and ready to work hard, this generation is optimistic about the future. Although they are intrinsically digital in their everyday lives, they also have high expectations for their in-store shopping experiences.
To succeed, brands must meet or exceed these expectations. Those who become proactive in understanding and delighting this generation will be the ones with a competitive advantage in the coming years.
To succeed, brands must meet or exceed these expectations. Those who become proactive in understanding and delighting this generation will be the ones with a competitive advantage in the coming years.
Rewards:
Discounts/Cash Back 43%
Free Products 42%
“You don’t necessarily have to pay full price. You can find quality and a good price on the sale rack. Marshalls and T.J. Maxx are also some of my favorites, and I can find a lot of the brands that they carry like Von Maur and Nordstrom.”
Gen Z Female, 16, Indianapolis
Methodology
The insights for this white paper were gathered using a multiphased research approach.
All references to consumers and population refer to survey respondents, except where specifically cited.
PHASE 1: SECONDARY RESEARCH
Synchrony leveraged existing syndicated and secondary data to identify insights and knowledge gaps before kicking off Synchrony research.
Timing: May – July 2017
Synchrony leveraged existing syndicated and secondary data to identify insights and knowledge gaps before kicking off Synchrony research.
Timing: May – July 2017
PHASE 2: QUALITATIVE
Synchrony partnered with market research and strategy firm Chadwick Martin Bailey to conduct an online immersion with Gen Z participants in four U.S. markets. Subsequently, in-home interviews (ethnographies) and shopping excursions were concluded.
Timing: October – November 2017
Synchrony partnered with market research and strategy firm Chadwick Martin Bailey to conduct an online immersion with Gen Z participants in four U.S. markets. Subsequently, in-home interviews (ethnographies) and shopping excursions were concluded.
Timing: October – November 2017
PHASE 3: QUANTITATIVE
For comparison, Synchrony conducted a multigenerational survey with over 4,000 respondents.
Timing: December 2017 – January 2018
For comparison, Synchrony conducted a multigenerational survey with over 4,000 respondents.
Timing: December 2017 – January 2018