Using Retail Attitudes To Distinguish Gen Z From Millennials

By - CTL
August 21, 2020
Using Retail Attitudes To Distinguish Gen Z From Millennials

By Chris Beer

In June this year, a line was drawn in the sand.

A Twitter post, capturing comments from TikTok users mocking millennials, went viral. Harry Potter houses, coffee, and “adulting” were all in the firing line. As the subsequent responses from millennials showed, it clearly touched a nerve.

We’ve talked about Generation Z for some time, but this example points to an even bigger shift in the cultural conversation.

From a distance, generations can look alike. It’s also easy to assume that young consumers always think in the same ways, and it’s just the technology they have at their disposal that changes. But shared events during their upbringing give each generation a common identity that separates them from their counterparts.

Differences in spending habits between generations are less likely to go viral, but they offer another way for us to see what’s distinctive about Gen Z compared to other age cohorts.

In this blog we’ll cover some surprising differences between generations in what they look for in the retail experience, and what this will mean for post-COVID strategies.

Don’t write off physical retail.

Let’s start with some seemingly obvious propositions. Gen Z spend a long time online, so surely, they’d be most eager to shop online as well? Not true.

While they’re ahead of older generations for wanting to order products online, they trail millennials. The fact millennials prefer “experiences” over owning things has become a well-worn cliché, but for good reason, as the data shows.

Physical vs online retail

It’d be easy to fall into the trap of assuming that Gen Z, being even more tech-fluent, have less need to own something if they can access it. But that’s not the case.

While Gen Z are definitely digital natives, they favour tactile, in-person, retail experiences more than you might think.

It may seem paradoxical, but this could have digital origins.

Instagram is the absolute cornerstone of Gen Z’s online life. Other than YouTube, it’s the social platform they’re most likely to use more than once per day. It filters into their personal interests too, as their passions tend to be very visual; they gravitate toward things like modern art and photography.

Having such a visual bent to their online behaviour means that offline retail environments can provide a good backdrop for them to curate and share online. This could change as Instagram plunges further into ecommerce, but for the time being, offline and online are very much intertwined.

There’s still much retail consolidation to take place because of COVID-19, and many brands will be forced to cut their retail footprint. But initiatives like Nike’s new flagship concept stores, recently opened in Guangzhou and Paris, give a taste of what sort of offline/online hybrid retail spaces are possible, even during a pandemic.

UK consultant Mary Portas has articulated how social distancing can actually be a boon to canny retailers. When shoppers are forced to take their time, retailers can use this as an advantage by elevating the customer journey through the store.

The pandemic might have boosted online shopping, but stores can still be a real asset when they’re managed effectively. And they’ll hold a big appeal for Gen Z.

The Gen Z dollar doesn’t come easy.

Virtually all parts of Gen Zers lives’ are shaped by the internet in some way, whether it’s in watching television, listening to music, or dating.

As such, you might expect them to favour digital payments services and abandon cash completely – but they haven’t.

As age increases, a preference to pay with cash actually decreases. 

Baby Boomers are the least likely to want to pay with cash of all generations, something that applies across all global regions.

frugal versus impulsive spending

Given Gen Z are well-acquainted with online shopping and mobile payment services, their interpretation of “cash” might not be coins and notes per se, but funds that they can immediately access. In other words, not spending on credit.

Other preferences of theirs support this. They’re more likely than millennials to wait for a product to be on sale than buy it at full price, and to save up for something rather than sacrificing other spending. Research by HSBC supports the idea of Gen Z as a frugal group, as the firm found 72% of them would, if given £1,000, move it into savings, compared to 55% of millennials.

Whereas their older counterparts are more impulsive with money, Gen Z are more inclined to spend pragmatically. We also have to bear in mind that while many are now coming of age, joining the workforce and getting independent income, many are still too young to have their own bank account, and aren’t able to access credit yet anyway.

To some, they may attack a reputation of being the “Klarna” or “buy now, pay later” generation, but as is often the case when analysing age groups, a vocal contingent of big spenders can obscure what this generation feels on the whole.

In a post-COVID context, there’s a clear need to differentiate between millennials, who are more likely to be swept up in “revenge spending,” and Gen Zers, who may be more thrifty.

Gen Z are spending with a conscience.

Social concerns are another area that make Gen Z’s spending habits distinctive.

They may not be quite the impulsive spenders millennials are, but they’ll be more tempted to dip into their wallet if they believe it will either support a local retailer, or help the environment.

Impact of social concerns on shopping habits

We’ve Covered before how environmentalism has been a guiding force in Gen Z’s development, and it’s safe to assume this will stay important in the next few years as climate change continues to dominate headlines.

It’s also worth thinking about second-order effects of COVID-19, and the recent spate of activist campaigns. Findings from this research offer some possible scenarios for different generations as they navigate shopping after lockdown.

Gen Z, more interested in supporting local businesses and shopping in-person, may look to call in at stores near to them as they re-open. 

They could also be persuaded by messaging from brands that look to solve social or environmental issues caused by the pandemic.

Millennials, more accustomed to online shopping, and with less concern for supporting local suppliers, may look further afield for the brands they want to buy from, and use delivery options to get the products they want.

Coming of age in a pandemic

Generational marketing can be productive, as long as it’s guided by data and doesn’t rely on generalizations or assumptions. This is especially relevant now, as Generation Z emerges with a more distinct group identity.

The most important lesson here is to not to assume Gen Z will follow the same path millennials did, particularly with online shopping. 

Gen Z may be skilled at building online personas, but their offline retail experiences help craft them. They may spend much of their day on the internet, but prefer to own physical goods they can show off when they do go online. They may be familiar with 24/7 online shopping, but spend pragmatically.

Just as some vocal Gen Zers are keen to break off from millennials in not being defined by Harry Potter fandom or “adulting”, their spending habits will break new ground as well.

It’s up to brands to recognise this new group of consumers, and factor them into their


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