The Next Generation of Shoppers Needs a Next-Generation Strategy

Your grandma shops online. Many baby boomers do.

But for retailers, having an online strategy isn’t enough — especially if it’s an outdated one, and only designed for one generation.

A new generation of shoppers, Gen Z, are bending online shopping to their will. Their preferences and values are making it more convenient and spontaneous…more interwoven with social media…and in some cases, more like a game.

Companies that don’t get their arms around this trend will find it harder and harder to capture these younger shoppers, who have more than $360 billion in disposable income, more than double the amount from three years ago. There are already 7.3 million Gen Z workers in the U.S. More will follow.


Consider, according to a recently Generational Insights poll sponsored by Synchrony:

  • 47% of Gen Z have made a purchase through Instagram
  • Gen Z believes the buying experience is as important as the product itself
  • Gen Z enjoys earning rewards/points that can be used for discounts and savings

At the same time, just to complicate things further for retailers, Gen Z actually likes to shop in physical retail stores, according to the study.

Make no mistake, this is a treacherous environment for retailers, which must make complex and difficult decisions about where to invest and divest, how to train employees, which technologies to employ and so on.

Three suggestions:

Adapt to where and how Gen Z wants to shop. Visiting a website, choosing a product, reviewing a “shopping cart,” typing in credit card details, etc. strikes Gen Z as cumbersome, slow and old-fashioned. They want shopping to be fast and fun — less of a process. That’s why Synchrony partnered with payments startup Skipify, which enables purchases instantly across email, text, social and other channels. This new way of shopping is a powerful retail trend toward simplifying, speeding and improving the online shopping experience.

  • Give young shoppers options to pay for goods. The Generational Insights study indicates that while Gen Z still favors debit over credit, their use of credit is on the rise — and they want to build a credit history. This is an excellent opportunity for retailers to give young shoppers financing options — including a store credit card, an installment loan or a buy now, pay later product. 

    Making paying more flexible can also include new contactless methods, such as paying by phone or with “cashierless” technology that lets in-store customers simply pick up an item, walk out with it and be charged automatically.
  • Customize physical stores to the omnichannel experience. The research shows that despite being digitally savvy, younger generations prefer to shop in a store for most purchases. But an online presence is necessary, as consumers typically research and review before purchasing. Building this kind of omnichannel experience revolves around a combination of data analytics and mobile devices. It is critical to provide consumers the right offer at the right time in the right location. With products like dApply, Synchrony allows consumers to quickly apply for a financing product with a QR code and get approved within minutes. 

Gen Z’s actions aren’t hard to understand — actually they make a lot of sense. The younger generation is bringing its digital savvy and expectations to all aspects of their lives — from work to recreation activities to shopping. And they represent a market segment that retailers can’t ignore. Merchants who break out of the old way of doing things will be perfectly positioned to profit for years to come.  

Maran Nalluswami is SVP and leads the Diversified & Value platform at Synchrony, one of the nation’s premier consumer financial services companies. Synchrony’s Diversified & Value platform provides comprehensive payments and financing solutions that seamlessly integrate the in-store and digital experience at national and regional retail brands. At the center of his work is his commitment to drive consumer and partner engagement through financing products, seamless experiences and consumer loyalty solutions. During his more than 20 years at Synchrony and GE Capital, Nalluswami has held multiple leadership roles, including overseeing the company’s partnership with Sam’s Club and the Lifestyle Markets segment. Prior to Synchrony’s separation from GE in 2015, he served as head of the Central Region for GE Capital overseeing the leveraged finance and equipment finance businesses. Nalluswami earned a bachelor’s degree in mechanical engineering from University of Maryland.

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