Retailers have to start understanding Gen Z. They’re in their late teens to mid-20s and have far more purchasing power than we give them credit for. They’ll reach $12 trillion by 2030.
They’ve grown up with devices in hand, and social media is their base of operations. But reaching them requires more than flashy social campaigns or discounts — they’re more resilient to being marketed to as well as ham-fisted attempts to study them. They’re a tough nut to crack for many retailers; particularly those using more traditional approaches to research.
Bringing Gen Z fully on board starts with understanding their diversity, their discovery platforms and their overwhelming preference for convenience.
1. Recognize the Diversity Within Gen Z
From a business’ standpoint, Gen Z may be the most diverse generation in play right now. They currently span multiple life stages. Younger members are still in school, and older ones are already in the workforce. My Gen Z colleagues at work have a completely different mindset than my kids (also Gen Z), who are still in school.
Older Gen Z’ers have a stronger sense of self, identity and financial independence, while the younger segment is still developing these traits. This leads to different purchasing behaviors. While young Gen Z’ers might prioritize trendy, affordable items,we’ve found that older Gen Z’ers look for quality, sustainable products that align with their values.
But their diversity goes beyond age or life stage. Gen Z represents a wide range of ethnicities and backgrounds. According to the Pew Research Center, only 52% of this group are non-Hispanic white, compared to 61% of millennials. 25% are Hispanic, 14% are Black, 6% are Asian and 5% identify as another race or as multiracial.
Retailers must reflect this diversity in their marketing. Gen Z expects brands to showcase a wide range of people, perspectives and experiences. If any of these unique subgroups are to engage with you, you’ll need your messaging to feel specific to their circumstances. They’re seeking authenticity from the brands with which they do business, and they’re not afraid to speak out.
2. Make Convenience Your First Priority
Above all else, Gen Z values convenience when shopping. Platforms like Amazon and Etsy have trained this generation — and the rest of us, let’s be honest — to expect easy access to multiple options in one place.
Our data at Rival Technologies revealed that Gen Z shops just two to three times per month. When they do, they seek out platforms where they can get everything they need as quickly as possible. The moment they have to dig or troubleshoot, many will simply walk away.
The ease of online shopping is partly driven by flexible return policies. Gen Z often buys multiple items, tries them on at home and returns what doesn’t fit. Across generations, 24% of online clothing purchases are returned. This behavior is something retailers need to consider when developing policies that meet Gen Z’s demand for flexibility.
But more so than return policy, we’re finding out that the key to connecting with this generation is in a seamless multi-platform shopping experience. With Gen Z’s preference for mobile shopping, optimizing websites and apps for mobile users is critical. Minimal-touch shopping and buying processes and flexible shipping options will keep your Gen Z customers coming back.
3. Use Social Media for Discovery, Not Purchase
Roughly 90% of Gen Z uses social platforms, making it impossible for retailers to ignore. But how they use these platforms matters. In our own research, we’ve uncovered that TikTok, Instagram, and YouTube are primarily discovery platforms for Gen Z. They use these channels to learn about new products, see what influencers are promoting and sift through branded content as it suits them.
But they don’t often buy directly through these platforms.
Despite the common assumption that social media is a direct sales driver, retailers should focus on creating engaging, educational content that connects with Gen Z’s interests rather than pushing for an instant sale. The former gets them thinking in your terms; the latter is becoming more of a last-ditch product awareness effort.
Treat social media as a chance to bring Gen Z into your world, showing them why what you do makes their lives easier. Knowing their preferences, you’ll do better to treat social platforms as a first touch point rather than a conversion.
4. Rethink Your Discounts
With inflation driving up prices, it’s no surprise that Gen Z’ers are drawn to discounts and promotions. But deals aren’t everything. While price-conscious, our work is showing us that Gen Z are happy to pay a premium for brands they trust, or whose products align with their values. If they perceive you as being transparent, authentic and mission-driven, your competitor’s paltry discount won’t sway them.
Retailers need to strike a balance between competitive pricing and showcasing brand authenticity. Gen Z has a sharp sense for disingenuousness. With this cohort, you are likely to come across a contingency of vocal ‘keyboard warriors’ who will inevitably have something to say about what you’re doing, whether it’s discounts, messaging or your brand values. It’s good to be prepared. Companies that can clearly communicate their mission and demonstrate their positive impact — whether through sustainable practices, ethical sourcing or social causes — are far more likely to resonate with this group.
Build Loyalty through Simplicity and Authenticity
Though Gen Z’s shopping behaviors vary, the foundation for building loyalty remains the same: trust, convenience, value and authenticity. If you can use deep insights to cater to these core needs, you’ll make yourself a beacon among the less refined approaches.
Investing in ongoing research and staying attuned to Gen Z’s evolving preferences goes a long way too. Our deepest, most nuanced insights around this generation come courtesy of our mobile-first, conversational research technology. When retailers apply these more engaging methodologies to their own research, they’re able to adapt their strategies in real time, ensuring they remain relevant to this powerful generation.
Andrew Reid is the Founder and CEO of Rival Technologies, Co-CEO of Rival Group and Founder and Former President of Vision Critical (now called Alida). As an entrepreneur, his purpose is to close the gap between how people live their digital lives and how companies engage with people for insights.
