Alexis DeSalva Kahler
Alexis is a Senior Research Analyst at Mintel. Alexis focuses on US Retail and eCommerce reports.

Gen Z adults today are aged 18-24 and represent the youngest generation with spending power. This demographic can be difficult to market to, with consumers encountering new milestones such as starting college and entering the workforce in a different culture than their elders did. But doing so is crucial, not only because of the longevity they offer as customers, but they’re unique compared to shoppers of other generations. Gen Z is digitally native, but many still seek a tactile shopping experience, at least for part of their purchase journeys. This dichotomy could result in this generation being wholly misunderstood by retailers and brands.

Understanding Gen Z consumers takes on a special importance as students head back to school. According to Mintel research on back-to-school shopping, the college market is extremely important to the total category, comprising two-thirds of the planned expenditures in the 2018-19 academic year at $55.3 billion, and planned spending is up for the upcoming season. Nearly all college students plan to shop for the 2019-20 school year and more students are becoming responsible for buying their own items. It’s important for retailers to understand the way Gen Zs shop in order to meet their expectations, delivering a successful back-to-school season and beyond.

Here, we take a close look at shopping trends and how they are resonating with Gen Z shoppers. We also hear from Loyola University Chicago students who participated in a Gen Z panel discussion with Mintel.

It’s not all about Amazon

Despite Amazon’s large presence in the retail landscape, it’s not necessarily a favorite for Gen Z shoppers. Although nearly three-quarters of adult online Gen Z shoppers say they purchased from the retailer in the last year, it is significantly less than the 84% of Millennial online shoppers who say the same. Adult Gen Zs give Amazon credit for its product selection, value and ease of shopping, but view the retailer less as an upscale or ‘cool’ retailer according to Mintel research on Gen Z online shopping habits. In fact, the Gen Z panel see the retailer as a brand they admire, but view it simply as a place to fulfill specific needs.

What Gen Z said:

“I think of Amazon as more of a marketplace. I would never use Amazon if it wasn’t for Prime.”’

“I think Amazon is too big of a brand but I do shop on Amazon for stuff I need at home, video games, electronics…very specific purchases.”

“I do shop on Amazon for random things but I wouldn’t think of them as my favorite brand, they’re just where I get stuff.”

What Mintel thinks:

This is optimistic for those looking for ways to compete with Amazon. Gen Zs are the next generation of shoppers and they’re not flocking to Amazon for all their needs. Understanding these consumers and when and where they shop is crucial to staying relevant and standing out in a competitive market.

The digitally native generation doesn’t solely shop online

The in-store experience is still relevant to Gen Z. More than two-thirds of online Gen Z adult shoppers purchase in-store and online, emphasizing the importance of multi-channel presence. Despite many store closings among some legacy retailers, digitally native brands like Outdoor Voices are moving offline, opening physical stores either in the form of temporary pop-ups, retailer partnerships, or permanent brick-and-mortar locations.

While many Gen Zs are comfortable fulfilling the final transaction online, in-store plays a crucial role in their shopping process. Gen Zs utilize stores to receive the tactile assurance they seek before committing to a purchase and two in five are still hesitant to buy certain items online. For some Gen Zs, in-store shopping is important simply for the sake of enjoying the experience. In order to connect with these shoppers, it’s crucial for retailers to recognize that no single channel is more important, but connecting through digital and physical experiences will have maximum reach.

What Gen Z said:

“It’s just easier to order online but there are some stores where it’s nice to go in and the experience is cooler like Outdoor Voices, Madewell, Anthropologie. Places like those I’ve gone in and tried stuff on and then ordered online.”

“I love online shopping because I get to just open up 40 different tabs but I like the process of shopping, and being there, trying stuff on…it’s an activity for me.”

What Mintel thinks: 

Brick and mortar isn’t dead; future shoppers will continue to head to stores based on their situation and needs. This is an indication of where brands and retailers need to focus future efforts; they should approach store strategies with quality over quantity and not overlook the importance of a physical store presence in order to attract Gen Z shoppers.

Gen Z’s are thoughtful, intentional shoppers

Despite their young age, many Gen Z consumers shop with intention and purpose, making considerate purchases as opposed to being impulsive. According to Mintel research, two in five adult Gen Z online shoppers plan most of their online purchases. They demonstrate this type of shopping behavior from the discovery process through post-transaction, showing that interactions with brands or retailers doesn’t end at purchase. Recognizing the types of research these shoppers seek is crucial to converting them from browsers to buyers – and potentially – repeat shoppers. Half of adult Gen Zs are hesitant to buy a product with no customer reviews and two in five believe it’s important to check multiple social media sources for reviews before buying. Gen Z shoppers will not be as easily swayed as some shoppers of older generations, and impulse buys are less likely to occur.

As much as Gen Zs try to make informed purchase decisions, many are also looking to continue their education after buying. More than two in five Gen Zs watch videos on how to use products and read reviews from other users after buying online. Gaining trust may require more work from brands and retailers, but those who do can reap rewards from consumers after the transaction. Gen Zs demonstrate more social media interaction with retailers or brands post-purchase than other online shoppers. This type of endorsement from Gen Z shoppers can spur purchases among their peers, who are more willing to buy if a friend posts about it, and ultimately broadens brand awareness among this generation.

What Gen Z said: 

“I like doing my research and making sure I’m getting the best value.”

“The ‘buy now, don’t miss out’ mentality feels like a scam.”

“I may get inspiration from Instagram but it’s never an instant buy. I want to research my options.”

What Mintel thinks:

Despite the popularity of newly minted sales events and holidays like Prime Day, making a purchase for the sake of a sale goes against the cautious nature of Gen Z consumers. Instead of relying on doorbusters and slashed prices, retailers should consider teasing “must-have” or promoted items prior to the day of the event. Sharing a glimpse at featured products ahead of time and including informative details like product information, customer feedback and reviews give Gen Z shoppers the information and reassurance they need before buying.