How Gen Z Is Shopping and How to Reach Them

How Gen Z Is Shopping and How to Reach Them
Gen Z's spending power is growing, predicted to increase to 48% by 2030 as more Gen Zers enter the workforce. As this generation becomes a critical part of the consumer sector, here's what you need to know about their spending habits and how to reach them.
by Square Jan 25, 2024 — 5 min read
How Gen Z Is Shopping and How to Reach Them

Who are Gen Z, exactly? Born between 1997 and 2012, Gen Z is the largest generation yet. Its members comprise almost 30% of the world’s population, and globally, there are almost two billion of them. Having never known a time before high-speed internet, they’re true digital natives, and they’re also the most ethnically diverse generation the world has seen.

Gen Z’s spending power is growing, and is predicted to increase to 48% by 2030 as more Gen Zers enter the workforce, according to Afterpay’s Gen Z report. As this generation becomes a critical part of the consumer sector, here’s what you need to know about their spending habits and how to reach them.  

What matters most to Gen Z?

Love it or hate it, Gen Z is known for its values. Many of its members are engaged with social and political issues, and they’re known for their activism on topics such as climate change, racial justice, and LGBTQI+ rights.

In a retail setting, they care deeply about sustainability and understand the link between excessive consumption and global warming. After all, climate change will affect this generation far more than those before it.

Of the more than 4,000 consumers Afterpay surveyed in Australia, New Zealand, the U.S., the UK, and Canada, 57% said they buy sustainable products when possible. They’re also more likely to stay away from brands that do not meet their ethical standards: One in five Gen Zers abandoned a brand in the last year based on its reputation for sustainability and ethics.

Where are they shopping?

Being extremely online, Gen Z is incredibly savvy and does much of their research and purchasing over the internet. In Afterpay’s survey, 64% of Gen Zers and millennials alike said they preferred to shop online rather than in person. They like the convenience of being able to shop from anywhere 24/7, the ease of being able to compare multiple stores as they search for what they want, and the reassurance of reading reviews and ratings.

They also expect to be able to shop on their own terms. Almost one in five Gen Zers have abandoned a purchase in the last 12 months because their preferred payment method was not available. For many of them, this preferred payment method is buy now, pay later (BNPL), with 58% of Gen Zers using BNPL in the last 12 months.

But it doesn’t end there – despite the popularity of online shopping, they’re true omnichannel shoppers, crisscrossing back and forth between digital and brick and mortar as they move toward a purchase decision. The primary reason surveyed Gen Zers gave for shopping in-store was that they wanted to feel, see, and try products before they bought them.

How to reach Generation Z

Now that you know a bit more about Gen Z and its habits, here are five specific tips to help you reach them with your marketing.

Lead with your values.

Because of Gen Z’s passionate views on social and environmental issues, you’ll need to be completely transparent and lead with your values and mission if you want to make an authentic connection. For example, if your brand is focused on sustainability, share what you’re doing to reduce waste and use sustainable materials and how you’re working to reduce your carbon footprint.

For example, the owners of Melbourne restaurant Sable say they launched the business to showcase “ … the true potential of plant-based and vegan culture through passion and positivity. We believe in a world where making ethical and compassionate choices comes without sacrifice.” (That means offering food so tasty you wouldn’t know it’s vegan!) Being vegan themselves makes for a completely authentic fit between their values and messaging.

Find them on social media.

Almost 90% of Gen Zers use at least one social media platform multiple times each day, and 66% of them use three or more different social media channels repeatedly each day.

· 58% of Gen Zers browse social media for shopping inspiration.
· 60% say they trust algorithms to show them more of what they’re interested in.
· 51% say they like shopping directly on social media.

 

So, if you want the sale, find your Gen Z customers on social media. Afterpay’s survey of 4,000 young people shows that, daily in the past year, 71% of Gen Zers used Instagram, 65% used YouTube, 59% used Snapchat, 57% used TikTok and 54% used Facebook, giving businesses an idea of where to find their target audience.

Emphasize eye-catching short-form video.

Almost all successful social media emphasizes eye-catching visual content, especially sub-60-second videos. The form is easily digestible, super shareable, and, often at least, spontaneous and easy to make.

There’s no question that younger people are driving the preference for shorter content. According to this great article from The Leap, almost 50% of TikTokers say they find videos longer than a minute “stressful.” The article also has heaps of pointers on how to create short-form videos in some of the main trends, such as product teasers and influencer videos; it’s well worth a look.

Try out interactive and immersive marketing.

Gen Zers spend so much time online that often they’re just asking for a way to meaningfully interact with the content in front of them. Interactive social media content — polls, quizzes, surveys, user-generated content and online challenges — can be a great way to increase engagement and learn about your customers at the same time.

Successful social media campaigns have one thing in common: they provide value to their audience. For example, Sprout Social ran a Twitter poll asking social media managers what topic they would most like advice on: performance, burnout, sharing data, or strategy (strategy was the most pressing issue by a landslide). Sprout could then use that information to create content they know their users want.

Following that example, a fashion brand might ask its followers to vote on something they’d like to see included in a new season’s collection and then use that intel to inform production.

The other big trend that Gen Zers are more keen on is the immersive shopping experiences offered by augmented and virtual reality.

Afterpay’s research shows that over 73% of Gen Zers are interested in buying real-world items in the metaverse, and over 65% are interested in buying virtual items. Over 55% of them (and over 62% of millennials) think the metaverse (an all-encompassing VR space where users can interact with its world and other users) will be an everyday part of life in the next 10 years.

Virtual try-on apps for clothes, sunglasses, and makeup; augmented reality for seeing how a new couch or a new shade of paint could look in your living room — these trends are sure to grow over the next few years, and turnkey solutions are already becoming more affordable for retailers. Are they something you could try?

Work with influencers.

In Afterpay’s survey, almost half (48%) of Gen Zers said they would buy a product based on an influencer’s recommendation.

It might seem counterintuitive to older folks, but trusting influencers makes sense as part of Gen Z’s search for truth and authenticity. Just as Gen Zers seek out user reviews when doing their pre-purchase research, they’re more likely to trust an influencer than a traditional celebrity endorsement.

In this view, influencers are real people, and, according to research by Morning Consult, being authentic and generally caring about their interests rates way higher than the number of followers they have.

That’s good news for businesses looking to engage an influencer. Look for influencers with authority in your brand’s space. Then create a shortlist and begin to gather data about your preferred influencers, including the followers and engagement they have. For more details, here’s our guide to working with influencers to drive Gen Z in stores.

Square
The Bottom Line is brought to you by a global team of collaborators who believe that anyone should be able to participate and thrive in the economy.

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