The ICSC’s latest read on Generation Z, in a report titled, “The Rise of the Gen Z Consumer,” reveals a demographic cohort that is values-driven, plans for economic uncertainties and embraces omnichannel retailing.
They also favor shopping in physical stores.
“While Gen Z is often viewed as a generation that grew up online, nearly all respondents (97 percent) shop at brick-and-mortar stores, driven by the immediacy with which they can walk away with a product, as well as the ability to see, touch and try products before buying,” the report’s authors said.
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The report also noted that Gen Z is “heavily influenced by social media when it comes to shopping,” with 85 percent of respondents stating that the medium impacts their purchasing decisions. Those polled said Instagram and TikTok were their preferred social platforms.
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The research also showed a waning preference for influencers as a source for new product recommendations. The poll showed that 56 percent of Gen Z turn to friends and family for inspiration, which was followed by 54 percent who take cues from product websites and 43 percent who are guided by store associates. Influencers only garnered 39 percent.
Tom McGee, ICSC president and chief executive officer, said the organization’s survey “shows that despite being ‘digital natives,’ Gen Z is an omnichannel generation. The percentage of respondents who shop online versus in-person are nearly identical, demonstrating that focusing on a particular channel is no longer the priority. Rather, retailers that can successfully offer convenience, quality and speed, and have a diversified presence across in-store and digital, will be well-positioned to capture the loyalty of this demographic.”
The report’s authors also noted that the survey results “depict a generation that is keenly aware of the state of the economy as their spending power grows — and balances being cost-conscious with being willing to pay for convenience and quality.”
The poll found that 78 percent of Gen Z surveyed said they are concerned about the state of the U.S. economy, “a number that increased to 84 percent amongst the older representatives of Gen Z, those ages 23 to 26, compared to 71 percent of 16- and 17-year-olds,” the ICSC said, adding that this level of concern “mirrors their habits around discount shopping, as 48 percent of respondents prefer off-price and discount retailers. However, this generation is willing to pay for what they want — particularly speed and convenience. Nearly half (48 percent) say they would pay a premium to have online orders delivered more quickly.”
Other findings include that 41 percent of those polled said they’re saving more than spending. This compares to 36 percent who noted the opposite. When it comes to what they use to spend with, 45 percent cited debit cards versus 21 percent for cash and 17 percent for credit cards. Three percent said they use buy now, pay later.
The report also found that Gen Z “has a distinct sense of brand loyalty, driven by value, omnichannel offerings and a proclivity for brands whose values align with their own. While price and convenience remain the number-one driver of their behavior, Gen Z is unafraid to champion their values, which are reflected in their shopping habits.”
The survey revealed that 56 percent of respondents said they’re willing to spend more for sustainably sourced products. And when asked about their top concerns and causes, “they cite mental health (53 percent), climate change and sustainability (47 percent), racial and gender equity (47 percent) and LGBTQ+ rights (26 percent).” The report found that two in five of those polled cited ethical labor practices are an essential when they choose to support a company or brand.
McGee described Gen Z as an increasingly important demographic “as more of them graduate from school, transition to their first full-time job, and mature into more spending power. Our study found that many of the stereotypes and preconceived notions attached to this cohort are unfounded; however, their habits will influence retail strategy, marketplace makeup and broader economic trends for years to come.”