Gen Z : Designing for the constant state of partial attention
‘Gen Z Shopping‘ was written in 2014 but still resonates today, with insights into the way generations X through to Z now shop. Critical to this analysis is the idea that Gen Z are valuable chiefly because of their influence on older generations and not just as a single age group in of itself.
Meet the most complex yet most critical shoppers of all time — Generation Z. By 2020, they will be the largest group of consumers worldwide, making up 40% of the US, Europe and the BRIC countries, and 10% in the rest of the world (Booze & Co, 2010). The needs and behaviours of this group will inform not only the next generation of shoppers, but the future of mainstream retail.
How do retailers and brand owners engage with a new kind of shopper that pays less attention but with a sharper and hyper-informed eye? There have been many observations on the lifestyle and digital dexterity of Gen Z (those born between 1995 and 2014) but until now their shopping habits have remained unobserved. In this report, FITCH not only defines who Gen Z shoppers are, but also clarifies their distinct retail behaviours and offers strategies for retailers to attract them with seamless and highly commercial experiences.
Fundamentally, the old rules of retail no longer apply.
Gen Z are not a new species. In many ways, they’re just like the teens of previous generations but with new tools to express their identities, discover new information and influence their peers.
Understanding these behaviours and the ways in which they differ from previous generations is key to understanding how to meet their needs, today and in the future.
There’s a new wave of shoppers in town. Though they live and shop among us, these new customers are happier with access than with ownership. Shrewd with money and eschewing credit, they have the time and tools to compare products and hunt for the best prices.
These shoppers have the power to hop between retailers — be they physical stores or online destinations — snapping pics and screen grabs as they go, and leaving a trail of hashtags in their wake. Their world is constant, so if they’re awake at 3am, they expect you to be too: open all hours, access all areas.
They’re as socially-conscious as they are brand-conscious. They’ve Googled your brand before leaving home and browse a scrapbook of ideas as they peruse your shelves, all the while getting real-time feedback from friends.
Logged into multiple platforms across a mosaic world of their own making, they live in a constant state of partial attention, but will know about a product problem or promotion way before you do. They are happy to accept a beta product today, with the promise of a better one tomorrow; it will be better because they’ve co-created it.
Opinionated, connected and influential in the digital realm, they’re expert messaging filters, resourceful planners and careful savers, looking for a retail experience with opt-in service, two-way dialogue and mutual rewards.
“This generation desire involvement in the entire chain of activities that brings a product to market — from conception, design and creation, to marketing and retailing, even to funding and rewarding.” (Pricewaterhouse Coopers / TNS Retail Forward, August 2012)
Surveying teens in Europe, Russia and China, FITCH conducted ethnographic interviews to collect first-hand qualitative testimony and design-focused observations.
Accompanying them on shopping trips, we assessed their social and shopping behaviours across channels to capture their attitudes, aspirations and needs.
Profiling Gen Z
Comprised of everyone born between 1995 and 2014, Gen Z is the most culturally diverse generation to date. This generation have grown up with varied family structures, a more diverse mix of ethnic groups and blurred gender roles. As a result, the global context surrounding their formative years, their relationships and their career aspirations differ vastly from those of their X and Y forebears.
While differences in perspective can be seen between developed and developing markets, the general outlook of teens worldwide has been influenced by common issues that have shaped their reference points. These issues have profoundly influenced Gen Z fears and concerns while simultaneously evoking tendencies to dream about making the world a better place and to believe that they have the power to effect significant change.
Fear: Climate change
Three-quarters of teens around the world consider this a greater risk than drugs, violence or war. Gen Z have a social conscience. Gen Z dream of a world in which good works are not the preserve of volunteers but an intrinsic part of society, especially in the corporate world.
Aspiration: Social good
Fear: Solitary pursuits
As teens who have grown up with social media, everything is better as ‘we’, not ‘me’. They value their community and their ability to cascade messages widely and instantly, recognising the power and influence this brings.
Aspiration: Community organisation
Fear: Online identity theft
Their digital presence is at least as important as their physical presence in the real world, so online wrongdoings pose a very real threat. However, having witnessed the downfall of corporations and entire countries, they assume that they will have to build the world they want to live in. And that the best way to do so is together and online.
Aspiration: Promoting change
They have seen adults follow society’s rules and still lose everything, so they don’t trust conventional views on making money. Unlike their parents and grandparents before them, Gen Z do not assume that if they study hard they will get a ‘job for life’; they assume that they will have to shape their own destiny.
While instant gratification in shopping was the norm for generations X and Y, and credit cards were iconic of this attitude, Gen Z are credit cynics. These resourceful savers are careful not to waste their limited financial means, and expect to become self-sufficient entrepreneurs — creators of their own sustainable fortunes.
How Gen Z shop
In contrast to X and Y shoppers, there is a real gap between seeing a product and buying it for the Gen Z shopper. If brands and retailers adapt to connect with them during this time — which FITCH refers to as the ‘aspirational browsing’ period — there’s an opportunity for real commercial success in the short and long term.
Key characteristics emerged from FITCH’s research.
01 / Gen Z were ‘born seamless’ and expect a similarly seamless retail experience.
02 / They are savvy cynics who trust their peers, not marketers, and who won’t pay more for ownership if they can pay less for access.
03 / They don’t expect to be treated differently by store staff because they’re young; they expect the same respectful and helpful interaction as older shoppers.
04 / They prefer the ‘good enough’ approach. They would rather have a product that is made available quickly and then improved at regular intervals with their input than a perfect product with guarantees and warranties in which they’ve had no involvement.
05 / Gen Z use multiple platforms instead of owning multiple devices — they talk about Facebook, Instagram or Pinterest rather than hardware tech manufacturers such as Nokia or Blackberry — and usernames have replaced avatars as symbols of identity.
06 / Gen Z expect constant innovation. Upgrades and updates are always welcomed as signs of progress. In fact, Gen Z actively dislike products that aren’t constantly changing.
Store design-relevant insights
01 / Gen Z orient by contrast and colour before exploring product features.
02 / Gen Z don’t look up when shopping; they navigate at eye level.
03 / Signage is invisible; their focus is on the product.
04 / Music signifies ‘open for business’; silence suggests closing time.
05 / Touch and access to the product are key for Gen Z; clinical displays are off-putting.
06 / A major frustration is hidden price tags — they fear they’ll want it and then realise they can’t afford it.
Five-point path to purchase
FITCH’s research indicates five distinct stages that Gen Z move through on their ‘path to purchase’, of which ‘aspirational browsing’ is one. Each stage has key drivers, touchpoints and behaviours.
Acknowledging and understanding these stages will allow retailers and brand owners to build a commercial relationship with this seemingly unpredictable group of shoppers.
1. Finding out
Gen Z identify potential purchases via their natural state of seamless multi-tasking and social media scanning.
Fashion retailer ASOS is expert at proactive visibility across all social media.
•Celebrities on Twitter
•TV ads & shows
•Billboards / posters
•Unplanned store visits
ASOS response: Visibility
Gen Z will start with Google before doing anything else. They then happily remix style trends, make a digital scrapbook (taking photos with their smartphones in stores and mixing them up with images scraped off Pinterest) and price-check across websites. While most of this activity is digital, they will also plan store visits as excursions — not individually but en masse with friends.
Fashion retailer Urban Outfitters is great at accessing the Gen Z shopper’s interest points, encouraging online scrapbooking and providing an inviting physical store presence.
•Up to three store visits with friends
Urban Outfitters response: Access
3. Decision making
Gen Z will seek approval from their peers, delaying gratification in case something better comes along, while constantly tracking prices using apps. These savvy shoppers may set a product ceiling price, buying only when the price falls below that level.
Sneaker retailer Foot Locker became reassuring by launching Sneakerpedia, a website that gained a reputation for offering solid information and advice on sneakers from bona fide ‘sneaker pimps’. The site didn’t carry any Foot Locker branding until two years after launch, so the respect it had gained over that period was authentic and lent Foot Locker massive credibility.
• Price comparison sites
• Repeat store visits
Footlocker response: Reassurance
For Gen Z — cash-poor but savvy — there is no shame in using bargain websites such as eBay, nor in picking up a good deal second-hand.
Fashion retailer Uniqlo offers fluid pricing and creative promotions that directly engage with consumers. In its Lucky Counter game, for example, the more tweets an item received, the further the price fell.
•eBay (site / app)
•Planned store visit
Uniqlo respons: Pricing
5. Show & tell
Having made their purchase, Gen Z immediately want to connect with their peers, creating, watching and responding to ‘haul’ videos.
Beats by Dre understand how Gen Z love to share, making it easy to upload pictures of themselves in their new headphones.
• Friends / parents / photos
• Social network
• Instant chat
Beats by Dre response: Fulfilment
Gen Z are ‘born seamless’, moving fluidly between the digital and physical worlds without making a conscious distinction between them. They have mosaic identities that are as virtual as they are physical. When making a purchase, they actively weigh the pros and cons of both store and online purchases, but tend to buy more online.
In contrast with the offline world, they experience magnified self-esteem and influence online. While the universal condition of being a teen is, and always has been, a state of waiting for growth, freedom and independence, these desires are now more satisfied online. Here they have limitless freedom to make things happen and almost never have to wait; in comparison, the real world can seem disempowering.
But seamless isn’t a teen thing
Many seamless shopping behaviours can also be observed in Gen X consumers — e.g. streaming music online. The essential difference is the attitude to these behaviours. What might seem natural and authentic for a Gen Z shopper would have to be adapted to by a Gen Y shopper and might seem alien to a Gen X. Same behaviours — different degrees of aptitude.
The old rules of retail no longer apply
Retail is on the brink of a revolution. Retailers and brand owners need fundamentally to reconsider their proposition if they are going to capture the hearts, minds, wallets and attention spans of this constantly connected, partially attentive generation.
What are you in the business of selling? Products, services or a lifestyle? What changes need to be implemented to fit these new needs and mindstates? And what shape does your path to purchase need to take?
FITCH has identified a universal pattern of behaviours, but every organisation requires a bespoke set of responses to address the needs and nuances of their brand and category.
Retail organisations need to change fundamentally. It is impossible to achieve seamless retail if you have separate departments for store design, online operations, marketing and logistics. The highly structured corporate siloes within large retail organisations need to become more fluid and collaborative in order to build future-ready infrastructures.
An essential part of this future will be the introduction of CXOs, or Chief Experience Officers, who will oversee the newly organised, holistic operations. Gen Z are often willing to share their data and information, but not all organisations are attuned to it or able to use it effectively. The CXOs will not only gather and use that valuable information, but also use it to build advocacy and loyalty.
The role and design of stores themselves will also have to change — and that doesn’t just mean new fixtures and fittings. It means real, dramatic change.
Stores will need to offer compelling, brand-led experiences that are more about aspirational browsing and less about a direct push for transactions. They will be launched in ‘beta’ mode — not yet perfect but inviting customers to get involved with making them better. Staffed by well-informed and helpful brand ambassadors, their success will be measured in footfall and conversion rather than purely sales. Gen Z do not want a hard sell. They’re looking for an opt-in service culture with a two-way dialogue and mutual rewards.
Principles for future retail
Shift from offering new things to buy to inspiring new things to do.
REI climbing wall
Physical: US sports retailer REI incorporates climbing walls in its stores. Very physical, super tactile, it’s a great way to get Gen Z involved, building excitement and footfall.
Human: Kochhaus in Germany offers a straightforward solution to the question “What shall I have for dinner tonight?” not only providing meal suggestions but setting out in one place all the ingredients you need for each dish, together with recipe cards and video links. Knowledgeable and passionate ‘foodie’ staff play a critical role here, always on hand with practical tips and advice.
Digital: The Reiss Guide is an online guide to cities all over the world, offering up-to-date advice on the best places to eat, drink, sleep, visit and — crucially — shop, including links to the nearest Reiss fashion store.
Shift from telling your story to starting a conversation about theirs
LEGO in-store play areas
Physical: Lego in-store interactive areas, created by FITCH, get the product out of the box and — literally — into play. By allowing children to explore, discover and have fun in this way, conversations are started and stories are told.
Best Buy’s Twelpforce
Human: US electronics retailer Best Buy was the first to see how Twitter could be used to help consumers rather than simply bombarding them with promotional messages. Twelpforce — a 2600-strong collective of ‘shop floor’ technology pros — are constantly tweeting insight in answer to consumer questions.
Fred Perry — ‘Heritage Woven In’
Digital: Under the headline of ‘Heritage Woven In’, Fred Perry provides a forum for the exchange of stories. By revealing the brand’s street heritage — how Mods adopted the shirt and who the Perry Boys were, for example — and inviting people to share their own stories and pictures, it brings the famous shirt to life.
Shift from making it perfect before sharing to making it better with their input
Puma Creative Factory
Physical: The Puma Creative Factory invites buyers to get hands-on in the creative process: “We supply the materials and you supply the imagination…” and then walk away in the sneakers of your dreams.
Sample Central, Tokyo
Human: Sample central offers a bespoke sampling service that lets people try out brands and products that they’re interested in. The products on display are for sampling only — not for sale — but visitors may be offered freebies to take away with them, ‘paid for’ with the valuable feedback they provide to Sample Central staff.
‘My Starbucks idea’
Digital: ‘My Starbucks idea’ is an invitation to coffee drinkers all over the world to submit suggestions on how to make Starbucks better, whether that’s its products, services or any aspect at all. Out of the thousands of suggestions they receive, between 13 and 17 are implemented each year — a great example of the way Gen Z can inform and change large organisations.
Capturing the critical Gen Z market represents a significant commercial opportunity for retailers and brand owners, but they have to be prepared for unprecedented change if they are to achieve the seamless retail that will engage these savvy and sceptical consumers. One thing is certain, though: doing nothing is not an option. Gen Z are the future. Their shopper needs and behaviours are set to revolutionise mainstream retail.
Download a PDF copy of the report from Slideshare.