Born between 1981 and 1997, millennials were shaped by a boom of information and technology as they came of age. For the generation that followed, however, these same resources have been available since birth. While millennials remember life before the Internet, Gen Z has had widespread access to information, the Internet, and social media from an early age. In both cases, these generations’ relationship with technology has had a critical impact on how they shop.
Online Optimism recently conducted a survey to learn more about the buying behavior of these generations. In particular, we focused on those caught at the tail end of the millennial generation and the beginning of Generation Z, born between 1995 and 1999. As these post-millennials continue to gain a foothold in the workforce and gain purchasing power, their influence will be increasingly felt in our economy.
While our sample size was limited, there is anecdotal evidence and, more importantly, research about these two generations that supports many of our findings. Read about a few of our top tips for marketing to late millennials and early Gen Zers.
1. Physical stores remain critical to young shoppers, but they require online and mobile support.
Online shopping may be gaining popularity from millennials and Gen Zers, but these young shoppers don’t want to see companies abandon their physical locations. According to market research from Accenture, 82% of millennials prefer shopping in physical stores.
The research also showed that 68% of millennials want a seamless shopping experience across channels, including physical stores, desktops, and phones. They like using desktops and phones to do research on products; look at reviews, ratings, and customer feedback; and search for coupons and the best prices. This insight is also backed by the Marketing to Millennials report by Futurum Research, which found that over two-thirds of millennials want a smooth, cohesive omnichannel experience.
In our own survey, 43% of late millennials and early Gen Zers reported buying evenly between physical stores and online, indicating the importance of having both a physical and digital presence. Of the remaining respondents, 28% shop mostly in physical stores, 18% mostly online, 8% entirely in physical stores, and 3% entirely online. When buying in stores, two-thirds of respondents indicated they had gone into a store to try a product before purchasing it online. And when buying online, 59% were most likely to make a purchase with a laptop and 37% with a smartphone.
A study by The National Retail Federation and IBM, Uniquely Gen Z, confirms Gen Zers’ preference for in-store shopping. It found that 67% of Gen Zers prefer shopping in a physical store most of the time and 31% some of the time. By contrast, 22% prefer shopping using a web browser most of the time and 54% some of the time. Just 13% prefer using an app most of the time and only 35% some of the time.
Given the consistent demand for in-store shopping across these generations, businesses should continue to maintain their physical locations when possible while also investing in their digital presence. Online-only businesses should consider ways to offer the same benefits of in-store shopping online, such as fast shipping and free returns to help facilitate the ability to try before you buy. In addition, online shopping should be a simple, seamless experience on both desktop and mobile to appeal to younger shoppers.
2. Security and privacy concerns are becoming bigger obstacles to online shopping.
Compared to other generations, millennials are more likely to trust organizations to keep their personal data secure and private, according to research from Gallup. Of all 11 different kinds of institutions Gallup questioned respondents about, a higher percentage of millennials reported having a lot of trust in each institution compared to other generations. And 80% of millennials indicated they have some or a lot of trust in businesses to safeguard their personal information.
Late millennials and early Gen Zers, however, are ushering in a new wave of distrust that could negatively impact online shopping. Our survey shows that 87% of post-millennials and Gen Zers consider a website’s security when making an online purchase. In addition, 82% have not bought from a website because of privacy concerns. According to the Uniquely Gen Z study, 62% of Gen Zers report feeling comfortable sharing purchase history and contact information with a company. But only 21% would share personal data or information, and only 18% would share payment information.
How can companies address these concerns and appeal to these consumers? Be clear and transparent about how shoppers’ information and data will be stored, used, and actively protected by your business.
3. Cost and overall value are top considerations for young shoppers, while social responsibility is getting less important.
While cost and value still matter to millennials, their unique idealism has allowed for brands’ social responsibility to take on a more significant role in their shopping considerations. According to the 2015 Deloitte Millennial survey, 75% of millennials think companies focus too much on profit and not enough on social responsibility. Yet getting a good deal is still key. Research from Accenture indicates that 95% of millennials want to be marketed to personally—for example, by receiving targeted promotions, discounts, and coupons.
In our own research, we saw price become more critical and company values less for late millennials and early Gen Zers. Price is more important than brand or convenience when buying products for 83% of respondents. Meanwhile, only 54% said they consider a company’s values when making buying decisions.
Similarly, the Uniquely Gen Z study found that 65% of GenZers want “real value for their money, with discounts, coupons and a rewards program” when choosing where to make purchases. Only 45% agree that the companies they purchase from are socially and environmentally responsible.
While having company values that resonate and engaging in social responsibility still matter, they likely won’t make up for high prices. More and more, businesses should consider focusing on building brand loyalty with solid rewards programs and targeted promotions, discounts, and coupons.
Download Our Free White Paper to Learn More
Want more insights about how to market to this up-and-coming generation of shoppers? Our survey delivers data on in-store organization and presentation, online shopping delivery times, influencer marketing, and more. Download Marketing Values for Post-Millennials today and let us know what you think of our findings.