Gen Z prefer shopping in-store

Nearly all digitally-native post-millennials (98%), or popularly known as Generation Z, prefer to shop in-store over online, indicates a new study by IBM and the National Retail Federation (NRF) based on findings from more than 15,000 consumers aged 13-21 from 16 countries.

With the global Gen Z population set to reach 2.6 billion by 2020, retailers need to create more interactive engagement around their brands to serve the ‘always on’, mobile-focused, high-spending demographic, according to the study.

The study found that 67% of Generation Z shop in a bricks-and-mortar store most of the time, with another 31% shopping in-store sometimes, indicating 98% of Gen Z shop in stores. The new generation is important to retailers because it has access to $44 billion in buying power, with 75% saying they spend more than half of the money that is available to them each month.

This generation is demanding; the study found 52% of Gen Z consumers will transfer loyalty from one brand to another if the brand’s quality is not up to par. They care the most about retailers getting the basics right, with 66% saying product quality and availability are the most important factors when choosing one brand over another; 65% focus on value.

“Generation Z expects technology to be intuitive, relevant and engaging – their last great experience is their new expectation,” says Steve Laughlin, general manager of global consumer industries, IBM. “This presents a significant challenge for retailers and brands to create a personalised, interactive experience with the latest digital advances or risk falling behind. This kind of innovation is not linear or a one-time project – it is a new way of thinking, operating and behaving.”

“Just as millennials overtook Gen X, there’s another big buying group retailers need to plan for, and it’s even larger – Generation Z,” adds NRF president and CEO Matthew Shay. “They appreciate the hands-on experience of shopping in a store. While technology is constantly evolving, some shopping habits remain the same; retailers need to be agile enough to serve both needs. Retailers are constantly focused on experimenting with new innovations both online and in-store to remain relevant to evolving consumer demand.”

The study found that Generation Z consumers like to engage with brands online, especially with those that create an interactive environment where customers can shape their own experience. As retailers develop and engage in such practices, they will be able to capture Gen Z ideas for new products, services, engagement and shopping experiences. This generation is known to be brand champions both online and offline, especially when brands acknowledge and value their opinions.