Investment, Purpose and (dis)loyalty: Meet the Next Generation of Shoppers
Loosely defined as those born in the mid-90s onwards, Generation Z is the latest consumer cohort to enter the market. Whilst you can’t segment a population by age and assume that they all think, feel and behave the same way, there are a number of macro trends that are starting to shape next-gen shopper behaviour.
From shifting attitudes to health and wellness, to a fundamental change in financial value perception, Gen Z is a complex new shopper audience. Understanding what motivates these shoppers is vital, not only to ensure we’re implementing the building blocks for retail of the future, but maximising the commercial opportunities of a new consumer super-segment.
Investment Pieces
Gen Z were only children during the global financial crisis, so have been hardened by the economic turbulence in which they’ve grown up. While millennials are often viewed as entitled and idealistic (valuing comfort and convenience), Gen Z is more pragmatic and entrepreneurial: motivated by security and realistic expectations.
Subsequently, shopper behaviour has come full circle, with Gen Z fuelling a return to much more considered consumption. Experiences are still important to this generation, but these shoppers think longer-term: they live for today, but have a foot firmly in tomorrow.
This has seen an interesting shift in managing their finances. Zeal Creative’s ‘Gen Z: Buying Into Better’ research showed that 74% of Gen Z admit to living frugally in some areas, so that they can spend more money on things that they like. This purchasing paradox makes Gen Z a fascinating shopper audience with which to connect, with brands able to connect simultaneously with both budgeting and investment messaging.
It would be wrong to label Gen Z as materialistic, but accurate to describe this audience as having a renewed appreciation for material objects. From their technology to their houses, purchases are not a gateway to experiences, but an investment marker of what they work hard for.
This behaviour is replicated in grocery stores, too. Premiumisation is driving growth across several categories, and Gen Z use the savings they have accrued in other areas, to invest in premium coffee, drinks and health and beauty products.
A new era of (dis)loyalty
In a world where experiences and products are increasingly designed to be shared, Gen Z is the first generation for whom this behaviour is inherent. Whilst millennials display stronger brand loyalty, Gen Z’s propensity to use purchases as social currency means that loyalties are less formed.
Some commentators have been quick to label Gen Z as more disloyal, but that doesn’t reflect the wider factor shaping this shopper behaviour. Gen Z is modern magpies that have been actively conditioned to seek the new. They may look around for better prices, but more importantly, cooler things.
Especially in the grocery sector, having a constant stream of new products to try is expected. Brands and product owners need to work to keep this new shopper audience engaged and help fuel this thirst for firsts.
Purchase with Purpose
As anyone who has read Naomi Klein’s ‘No Logo’ will testify, it’s not that long ago that brands were being chastised for pushing an endless cycle of conspicuous consumption. However, in an age where old institutions are seemingly failing us, brands have ascended to become beacons of hope, positivity and real change.
We’re seeing a shift in brand consumption, from aspiration to inspiration: brands are no longer a shared symbol of status, but a signal of shared values. Brands recognising the nuances of this shift stand to succeed in this bold new world, as Gen Z shoppers look to affect positive change through their purchases.
And this isn’t just the preserve of Patagonia t-shirts or Chilly’s water bottles. The world of grocery and FMCG is quickly catching on to this new generation of conscientious consumers. Brand such as Quorn are following a progressive positioning, as it looks to reduce climate change through a meat-free diet. Purchase has become political – and Gen Z is driving the agenda.
Winning with Gen Z shoppers
At its worst, generational stereotyping can be a lazy form of segmentation, grouping a diverse range of people and attitudes into a neatly-defined (yet ultimately unrepresentative) label.
But at a macro level, unique contextual factors are informing and shaping the cultural attitudes, outlooks and beliefs of this new generation as a whole.
The ever-changing retail landscape is where many of these changes are becoming visible, reflecting new shopper behaviours: what they buy, how they buy and why they buy.
Fuelled by a series of macro trends and micro influences, Gen Z shoppers are a new breed of product-focused shoppers, redefining notions of value through purchases that are also political and purposeful.