How Will Gen Z Reshape Retail?

Given that the oldest members of Gen Z are just now reaching college graduation age (and the youngest are still finger-painting in kindergarten), it’s difficult to draw accurate conclusions about what this group’s ultimate impact on retail will be. Still, researchers and industry analysts have made predictions about Gen Z that have many retailers concerned about the fallout when these consumers start spending their own money, rather than their parents’:

• Will anything draw these digital natives into brick-and-mortar stores, or will they rely almost exclusively on mobile and voice shopping?

• Will Gen Z consumers follow in Millennials’ footsteps, spending their disposable income on experiences rather than possessions?

• How will retailers meet the needs of this informed and savvy group of shoppers?


The RetailWire Brain Trust tackled these and other questions about what we already know — and what we can reasonably expect — from the rise of Gen Z. Excerpts of the discussion follow:

Anne Howe, Principal, Anne Howe Associates
I hope the Gen Z desire for experiences beyond digital will keep them out and about in retail stores as they try to discern what brands will work for them as they start households. But as they get comfortable with brands they like (including Amazon Choice), I believe Gen Z will have the opportunity to drive the voice-activated shopping movement forward very quickly, based on their exposure to in-home devices such as Echo and Alexa. It’s just too easy!

Brandon Rael, Founder, BR Advisory
As a father to two of the younger members of the Generation Z segment, I can assure you that despite having touch screens and digital technology at their every disposal, they, along with their friends, still enjoy a multi-sensory in-store experience. It’s key to balancing their time with “offline” cultural, physical and educational activities.

Without making broad generalizations, they along with their friends are growing up in a world where they are socially and environmentally conscious. They are concerned where the products are sourced and enjoy local community-based stores. The store shopping experience they are seeking is one where it’s a physical and digital playground in which they can try, experiment with and enjoy the product before making a purchase decision. With the emergence of showroom hybrid retail concepts, retailers will be more than equipped to provide that experience.

Jeff Hall, President, Second To None
The challenge with the Gen Z customer segment is understanding what kind of value they are looking for, and how to best interact with them digitally given their strong propensity to using mobile devices. Gen Z creates and consumes so much digital information every day that brands need to find a unique yet non-intrusive way of establishing relevance. Those brands that can navigate their way through the ever-changing preferences of Gen Z will be positioned for longer-term success. We’ve curated additional thoughts here.

Gene Detroyer, Professor, European School of Economics
We often talk about legacy infrastructure that keeps technology from being adopted. In the U.S., the most stored country in the world, the fact that there are so many stores kept retailers from understanding, investing and embracing online.

There is also legacy in behavior. Us elders were brought up on stores and it has taken us a while to adapt to online. The generation behind us adapted much sooner and spends more time and money online. The generation behind them has developed their own behavior legacy and it is not going to the store — it is ordering online. Online is the first place they go.

One comment about Gen Z being frugal: They aren’t frugal. They spend their money reasonably. They are practical when it comes to so many things that we were spendthrifts on. But they spend their money carefully and openly on what they want, and they are willing to do it.

Dave Bruno, Marketing Director, Aptos
Of course their shopping and spending patterns will evolve as they age, but here is what I believe is the most important point to remember: if we earn their devotion and loyalty to the store experience now, we have a much greater chance of keeping the store relevant with them as they grow up. We have to engage, entertain and delight now if we want to increase our odds for store visits from them forever.

Sky Rota, CEO,
First of all, Generation Z is not “frugal.” I think you are confusing us being educated, knowledgeable informed shoppers to being frugal. Let me give it to you straight. Generation Z has zero money of our own! We are a large generation from college seniors down to five-year-old kids. Every one of our purchases are made with our parents’ money! Everything! None of us are without a new phone, gaming system (Xbox/PlayStation) or nice pair of shoes. We are the professional persuasive texting generation. We can get our parents to purchase anything for us, at any time and any age. And we provide all the research needed to answer their questions. You want to know if we will be making these same purchases when we begin to earn our own money? I will honestly say, most of us are in for a rude awakening. I don’t believe we will want to use our hard-earned money as easily as we do our parents’ money.

Will we be shopping in stores? Shopping online is such a convenience and offers a huge selection. Generation Z doesn’t like to go to stores to be disappointed when we can stay home and get exactly what we want. No settling for something else for Generation Z.

Jennifer McDermott, Consumer Advocate,
Are Millennials finally going to catch a break with an attention shift to Gen Z? I have a real problem with boxing an entire generation into a few broad descriptions. They will be plagued by the same negative titles such as lazy and entitled of generations before them (when they were that age) but knowing nothing other than the digital age will likely make them the most informed and savvy shoppers we’ve seen.

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