From trend to recommend: The retail recalibrations that will attract next-gen shoppers
Discover your Gen Z playbook and reach more next-gen customers.
By 2030, Gen Z and Millennials will account for nearly half of all retail spending. 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.
If these retailers don’t adapt, they’re leaving money on the table, says Heawon Kim, Head of North America Mid-Market Sales at Afterpay.
The next generation of consumers learns about products via social media and engages with brand-specific apps and websites while shopping. Kim says that to connect with this demographic, which includes people ages 16 to 24, retailers should consider making a few simple changes, beginning with approachability.
“We know that Gen Z truly values accessibility at retailers,” says Kim. “They’ll continue to feel satisfied to engage with a business if it can service them with ease and convenience, whether that is making it easier on how they shop, how they pay or how they engage with a brand in general.”
"Gen Z will engage with a business if it can service them with ease and convenience."
In addition, Kim shared three high-performing solutions that retailers can take 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.
A survey by the International Council of Shopping Centers found that 45% of Gen Z respondents named TikTok and Instagram as the top platforms influencing their purchasing decisions, followed by YouTube (38%), Facebook (24%), Snapchat (17%), Twitter (14%) and Reddit (7%).
To acquire new customers, Kim says it’s important for retailers to connect with consumers via social shopping experiences.
“If you look at some of the most successful retailers, a common denominator that all of them have is a solid understanding of how to leverage their social channels in a meaningful way to create as many touch points as possible for their Gen Z audience,” says Kim.
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 Kim. A study by Afterpay and Oxford Economics found that roughly three-quarters of Gen Zers and Millennials use BNPL services at least once a month, compared with only 52% of Gen X customers.
“Convenience is paramount for the next-gen consumers,” Kim says. “Gen Z is looking for more flexibility and to gain better access when it comes to their omnichannel experience.”
One retailer that has had success by offering flexibility is HBX, a global e-commerce platform and retail destination of Hypebeast, which started offering Afterpay in 2022 to make products more accessible to its shoppers, who are primarily Gen Z and Millennials.
“We generated a noticeable sales result which really exceeded our expectations,” said Chief Revenue Officer Huan Nguyen.
3 Extend offers and promotions to unlock loyalty.
The No. 1 reason Gen Z will purchase from a brand again is if it offers good discounts and sales, according to Afterpay research. And yet, only 36% of Gen Z survey respondents said they feel loyalty to a brand, says the National Retail Federation (NRF). That, says Kim, means retailers could benefit by offering comprehensive loyalty programs to extend promotions to shoppers. These kinds of programs, she adds, don’t require a big financial and time investment.
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 Afterpay Playbook, From Trend to Recommend: The Retail Recalibrations that Will Attract Next-Gen Shoppers.
All references to any registered trademarks are the property of their respective owners. Afterpay does not endorse or recommend any one particular supplier and the information provided is for educational purposes only.
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