Anatomy of a Shopper: How to Win Long-Term Loyalty with Gen Z

They don’t know a world without high-speed internet and handheld devices. Texting comes as naturally as talking. And they’re increasingly using their super-connectedness for social good.

Say hello to Generation Z (AKA Gen Z), the (approximately) 7- to 22-year-olds who can boast that they are the first digital generation. They come to the market with a spending power of $143 billion, so if retailers want to succeed in 2021 and beyond, this is one cohort of Canadians to invest in.

“… retailers really cannot start soon enough … because the Gen Z cohort will be the primary spenders in five or 10 years. So you won’t be ready if you’re not investing now,” Anita McOuat, Partner and National Leader at PwC, told Retail Insider.

So how can you build a loyal following among the most up and coming generation? Start with these tips.

Improve e-commerce.

Digital shopping is queen. This is true for other generations, too, but researching, price-checking, and purchasing online is more natural for Gen Zers. “This is a group that is 25% more likely to shop online compared to the Boomers,” said McOuat.

Meet these buyers where they live by ensuring your e-commerce experience is smooth, streamlined, and intuitive. A generation of youth who are accustomed to constantly flipping between websites and platforms has no patience for error messages or slow loading times. Make your site as perfect as possible, especially on mobile.

Dive into social media/influencer marketing.

Generation Z is over traditional advertising. Seventy percent of Gen Z-ers follow at least one influencer on YouTube or Instagram, according to a Kantar consumer study published in early 2020. (TikTok has since become the breeding ground for influencers.) The study also found that 44% of Generation Z has made a purchase decision based on a recommendation from a social influencer, compared with 26% of the general population. If you haven’t already, start courting influencers as part of your marketing efforts.

While you’re at it, consider allocating marketing resources towards social media advertising. And have a strong, on-brand presence on social media, offering discount codes and other special deals for followers. The more you can operate in the online space, the better chance you’ll have to capture the attention and loyalty of digital natives.

Remember: they learn from videos.

From makeup tutorials to cooking classes to life hacks on all subjects, Generation Z heads to YouTube or TikTok to learn something new. Thanks to the ubiquity of video content online, it’s easy to watch, learn, and then do—all in the privacy of their own bedroom or studio apartment.

Retailers take note: some of the most popular DIY videos are low-budget and unscripted. While brands could stand to put more thought and effort into a video, don’t be afraid to post a simple “talking to the camera” vid on your favourite store products, cool features, or a quick how-to on a unique way to use one of your offerings. Don’t be afraid of not being cool enough—some of the most admired viral videos are those of people just doing what comes naturally to them. If there’s anything Gen Z hates, it’s inauthenticity.

Add more to the shopping experience.

According to PwC’s Canadian Consumer Insights 2020, the retail experience matters to Gen Z. If they’re going to leave the comfort of the couch to venture into a store, it better be worth it. “You can give them [a] reason [to visit] by investing in your in-store customer experiences. We see great examples of this already: some leading retailers are creating engaging social spaces in their stores, while others, notably digitally native brands, are setting up a brick-and-mortar presence as a place to touch, try and potentially customize their products or offer additional services,” reads the report.

Tactile experiences, exclusive products, and services like a spa or coffee bar are great ways to boost revenue and bring in foot traffic. Some retailers even offer workshops with giveaways to provide more than just products for their shoppers. Be creative and exclusive—like Millennials, Gen Zers like to feel like they’re discovering something new.

Think about self-guided checkouts and other digital measures.

PwC reports that, “Gen Z consumers (42 percent) are more receptive than baby boomers (27percent) to automated checkout options, as well as other digital, self-guided experiences in stores.” Don’t be afraid to invest in the latest technology to make things easier and more interesting for a generation that’s accustomed to swiping and tapping their way through transactions.

Technology includes:

• Augmented reality apps that allow consumers to visit a virtual fitting room. IKEA and Amazon use this technology to help customers visualize what their furniture will look like in their homes.
• Fashion AI, a technology built by Alibaba Group, creates personalized mix-and-match apparel recommendations for shoppers as they move around stores. This helps them easily find items that will fit their tastes.
• Amazon is a pioneer in developing the cashier-less shopping experience. Their Just Walk Out technology allows shoppers to enter a store, grab what they need, and just go. Items are tracked and a credit card is automatically charged.

Provide diverse payment options.

A young population just starting their careers amid an economy-crushing global pandemic means many young adults are feeling a financial squeeze. In June 2020, Statistics Canada reported an unemployment rate of 30 percent for 20- to 24-year-olds. Empathize with this reality by making it as easy as possible for this cash-strapped generation to buy the things they need.

Providing flexible payment options is a good start. Canadian retailers like the Hudson’s Bay Company, Wayfair, Endy, and Steve Madden provide installment payment options through PayBright, which offers two payment plans:

• Pay in 4: Customers get an instant approval and make 4 biweekly payments for their purchase. Interest free. No hidden fees. No impact to customer credit scores.
• Pay monthly: Customers enter a few fields of information for approval and make monthly payments for their purchase.

Giving Gen Z a little financial breathing room during the lean years can go a long way to building a long and loyal relationship.

Make sustainability a priority.

Today’s youth are acutely aware of the perils of climate change—and all the ways consumer culture has contributed to our current predicament. More than preceding generations, Gen Z pays attention to the environmental impact of the things they buy. They’re less likely to pick up “fast fashion” than their older counterparts and are more willing to spend an incremental of 10 percent or more on sustainable products, according to a First Insight Report.

Investing in products that have a social conscience and less of an impact on the earth, reducing packaging in your own store, and partnering with green initiatives are just some of the ways you can demonstrate to this cohort that you share their values.

Winning the trust and loyalty of Generation Z isn’t rocket science. Sure, they may prefer to be marketed to on social media instead of more traditional advertising. But, like their predecessors, they want their shopping experience to be easy and enjoyable—online and in-store. They want to do business with retailers that show they care about them and the world we all live in.

Refreshing and reinventing retail for Gen Z may end up being what’s best for all of us.

This article is provided for informational purposes only. It is not an exhaustive review of this topic. The content is not financial or investment advice. No professional relationship of any kind is formed between you and PayBright. While we have obtained or compiled this information from sources we believe to be reliable, we cannot and do not guarantee its accuracy. We recommend that you consult your personal finance professional before taking any action related to this information. PayBright is a provider of Buy Now, Pay Later (BNPL) solutions. BNPL providers offer plans with a variety of terms and conditions, including interest rates, fees, and penalties, and have different standards for qualifying for loans. Laws and regulations governing BNPL providers vary by jurisdiction. We recommend that you compare and contrast plans, read the fine print, and conduct detailed research into any BNPL provider before using their services.