From trend to recommend: The retail recalibrations that will attract next-gen shoppers
Discover your Gen Z playbook and reach more next-gen customers.
Gen Z will soon be the driving force of retail. When coupled with Millennials, the two generations will account for 39% of all retail spending in the UK by 2030. And yet, studies show that many retailers aren’t ready to meet Gen Z’s needs and are struggling to provide the user experiences that digitally savvy Gen Zers demand.
Retailers need to offer Gen Z a seamless experience in order to turn them into loyal customers, says Rich Bayer, UK Country Manager at Clearpay.
The next generation of consumers learns about products via social media and engages with brand-specific apps and websites while shopping.
Bayer says that to connect with this demographic, which includes people ages 16 to 24, retailers should consider making a few simple changes, beginning with accessibility. “Gen Z wants to feel like it’s effortless to interact with the brand, browse and pay for goods,” says Bayer. “The easier and more convenient retailers can make each interaction, the more likely they are to satisfy Gen Z's needs.”
"Gen Z wants to feel like it’s effortless to interact with the brand, browse and pay for goods."
In addition, Bayer shared three high-performing solutions that retailers can use to acquire, engage and nurture Gen Z customers.
1 Leverage social commerce.
Social commerce — which refers to shopping experiences via social apps — is imperative for next-gen consumers, whose banking and financial apps have always been just a click away from their social apps.
Bayer anticipates that social media will continue to grow as a retail channel and he encourages brands to make the most of social commerce opportunities.
“For younger consumers, social platforms are about so much more than socialising. It’s where they discover trends, do their research and find the brands that they want to buy from,” Bayer says.
“The retailers that are thriving in this Gen Z world are the ones who have mastered the art of social selling by creating multiple opportunities for potential customers to engage with them.”
2 Offer flexibility.
Younger shoppers are embracing flexible payment methods, such as buy now, pay later (BNPL). That’s because next-gen shoppers are increasingly credit averse, says Bayer.
A study by Clearpay and Oxford Economics found that over half (53%) of BNPL customers prefer BNPL services to credit cards. This rises to 64% for Gen Z and 57% for Millennials, which is consistent with findings from a Financial Conduct Authority (FCA) survey that a larger proportion of Gen Z UK adults has stopped using credit cards.
“For Gen Z, it’s all about convenience and flexibility,” says Bayer. “Retailers need to be thinking about omnichannel experiences and they need to have a mobile-first mindset.”
3 Extend offers and promotions to unlock loyalty.
Loyalty is tough to earn – especially among next-gen customers. According to research from McKinsey, 30% of Gen Z respondents in the US and the UK said that they’d revert to their ‘go to’ brand for a new product or service when making a purchase.
However, 62% said they would consider other options, even if they had a favourite brand. That said, the No. 1 reason Gen Z will purchase from a brand again is if it offers good discounts and sales, according to Clearpay research. Some retailers provide these discounts through rewards-based loyalty programs and engaging gamification elements. And, according to Clearpay’s Festive Forecast, ‘Spend & Save’ discounts work best amongst Gen Z consumers with 32% finding this marketing offer enticing.
Next-gen consumers are engaging with retail technology differently than the generations before them. By understanding their shopping behaviors and purchasing decisions, brands can put that information to use and drive measurable impact and incrementality.
To learn more about these strategies, and to read examples of retailers who have put these plans into action, download the latest Clearpay Playbook, From Trend to Recommend: The Retail Recalibrations that Will Attract Next-Gen Shoppers.
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