Best of Both Worlds is the Future For Retailers, According to Gen Z

To effectively engage Gen Z, retailers must embrace new technologies, experiment with new forms of communication, and internalise the nuances in how Gen Z seamlessly blends the analogue and digital worlds.

Before diving into how retailers can engage Gen Z effectively, it’s important to remember that they represent a fundamental gap with all other generations, and that is they’ve never lived in a world without the internet. Gen Z’s attitude towards buying products and services are polarising with older generations like Baby Boomers and Generation X, giving us a sneak peek into the future of the retail and shopping industries.

In light of this, you might be surprised to hear that an online-only retail strategy isn’t actually the best way to reach Gen Z, which is particularly interesting when looking at the Australian retail industry over the last 20 years and its incredible shift to online retailing.

It might not be time for brands to say goodbye to bricks-and-mortar stores just yet…with Gen Z looking for the best of both worlds. In a groundbreaking international study conducted by The Center for Generational Kinetics and commissioned by WP Engine, Gen Z prefers businesses with an online presence and a physical storefront, which is a clear reflection of the ‘clicks-to-bricks’ opportunities brands such as Sephora and ZARA are capitalising on today.

This is not to say that Gen Z wouldn’t engage with brands who decide to adopt an online-only retail strategy. When asked if online-only companies were less trustworthy than solely bricks-and-mortar businesses, 62 percent of Gen Z said no.

Another surprising finding is that Gen Z still prefers company websites over mobile apps when making purchases. This fact has held true across all generations, with Baby Boomers leading the pack (89 percent), followed by Gen X (87 percent), Millennials (80 percent) and Gen Z (75 percent).

As shoppers, Gen Z demands that brands be both socially accountable and imbued with a sense of authenticity in their consumer interactions. The study shows that 63 percent of Gen Z are more likely to buy from companies that contribute to social causes. This is no surprise and is something brands have been tackling when targeting millennials in today’s landscape.

An example of a retailer who’s succeeded at this is Cotton On. The brand has made ‘giving back’ a core part of the shopping journey, where customers are given the opportunity to purchase water bottles, material shopping bags and other goods that contribute directly to a variety of social causes. In turn, the initiative works really well in engaging Cotton On’s core target audience, Gen Z and Millennials. However, the study shows that this tactic wouldn’t be as effective when appealing to older generations such as Baby Boomers, with 54 percent claiming it didn’t matter if brands engage in social issues.

If brands aren’t already thinking about how they can target Gen Z, it’s something they should be seriously considering in their retail and marketing strategies. Gen Z is already dramatically shifting the ways we engage consumers and it’s only just the beginning.

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