A new study from HRC Retail Advisory finds that ‘Generation Z’, that is, youth between the ages of 10 and 17, will have a significant influence in holiday spending patterns in Canada this year. The study notes that there’s a generational shift in consumers, with younger shoppers having different expectations of how they wish to interact with retailers. As well, Generation Z is having a profound influence on their Millennial parents, including dictating household spending and consumption patterns.
"Generation Z has significant influence over household purchases," said Farla Efros, President of HRC Retail Advisory. "Retailers must appreciate the different expectations and habits of this group, develop and execute strategies that address their needs in order to stay competitive with this increasingly important consumer segment."
The Generation Z consumer is heavily influenced by friends, bloggers and social media, noted Ms. Efros, who coordinated a study on behalf of HRC Advisory by surveying 3,100 participants in the US and Canada on their shopping habits, attitudes, and the influences driving their purchasing decisions. Significant findings of the survey include the following:
Malls are not dead, and are being shopped differently: According to the study, malls are still popular, especially with Generation Z shoppers. While more than 60% of all survey respondents said they visit a mall or shopping centre at least once a month, 72% of Generation Z respondents (youth aged 10-17) and Millennial parents with Generation Z-aged children say they do so (having a specific mission and in search of specific items). Generation Z shoppers also spend more time at the mall and they visit more stores, according to the study, with 22% of frequent Gen Z visitors saying their typical trip to a mall is more than 90 minutes and they visit, on average, four-to-five targeted retailers.
Gift cards are the most desired gift: Among the 3,100 study respondents with a preference, 62% would rather receive a gift card than an actual gift. Among Gen Z children, this number climbs to 69% -- further indicating their desire to make their own purchase decisions. The majority of respondents, particularly parents, plan to include gift cards among their holiday purchases and remarkably, among Millennials that have children and earn more than $150,000 per year, 96% plan to include gift cards in their holiday shopping.
Social influences/media are changing shopping behaviours: Younger shoppers are more influenced by their peers and social influences now than ever, according to the study. Generation Z shoppers tend not to be strongly influenced by celebrity endorsements from athletes, actors and singers, contrary to what some may expect. Rather, more than 61% of their purchase decisions are most strongly influenced by friends, with 13% being influenced by bloggers. As well, social media is a significant influencer, with about 50% of Millennial and Generation Z shoppers surveyed saying that they use social media while they shop. Of their social media time, most is on Facebook (61%), followed by YouTube (38%) and Instagram (24%).
Amazon is the most popular shopping site – by far: In the study, 66% of Millennials say that they place an online order at least once a month and of those, 79% purchased on Amazon. Other popular sites include Ebay, Groupon and Apple, respectively.
Ms. Efros said, “As Generation Z begins to gain a foothold in the consumer spending environment, and Millennials mature, their expectations are transforming the retail landscape. In order for retailers to remain competitive, they must begin to develop a balanced approach to serving Baby Boomers and Generation X and Millennials who still have the great majority of the spending budget - while positioning themselves to best serve the emerging and future consumer segments who have an attention span of seven seconds, have on average five devices and prefer to be spoken to with short bursts using emojis, for longer term success.