Funny thing about Generation Z/iGen consumers: they always shopped as if they were preparing for a cataclysmic global event. Gen Z grew up during the Great Recession and watched their parents and millennial siblings struggle to make ends meet with little to nothing put away in savings. Harsh inevitabilities about how global warming would play out during their lifetimes also made an impact on Gen Z’s purchasing behavior, leading to the pursuit of sustainability over status (to the great dismay of many a legacy brand).
Gen Z was often accused of being overcautious as consumers–preferring saving over spending, putting little emphasis on brand names, considering the environmental impact of each purchase, and strategically building up their credit from a young age. It’s as if, on some level, iGen consumers knew the COVID-19 pandemic was coming. But now that we’re in the midst of the coronavirus crisis, retailers will need to significantly modify their ecommerce operations to continue appealing to Gen Z.
Next-Gen Consumer Expectations Evolve During Shutdowns
Gen Z was the generation whose purchasing decisions were most influenced by brand’s stances on social and environmental issues before the crisis. So, it stands to reason that how brands respond to the COVID outbreak will play a large factor in their future purchasing decisions. Customers are keeping track of which retailers furloughed workers without pay, which retailers stayed open unnecessarily (#boycott Hobby Lobby, anyone?), which retailers took great strides to provide medical professionals with the materials they need, and which company CEOs stretched themselves thin to continue paying employees as long as possible.
But if you thought Gen Zers were minimalistic consumers before the COVID crisis, just think about how withholding their purchasing patterns will be when all of this insanity is over.
Now more than ever, it’s apparent to Gen Z consumers that they vote with their dollar. Leading online publications–including CNBC, Fast Company, and Business Insider, among others—have devoted huge portions of their websites to informing consumers about how their favorite brands are responding to the COVID crisis. These responses aren’t something that customers will soon forget, even when the rest of the retail industry reaches a new homeostasis.
Frugality Beats Out #YOLO Spending
Prior to the coronavirus outbreak, Generation Z already had a tight grip on their wallets. A whopping 65 percent of Gen Z consumers already preferred to make purchases that offered value through discounts and rewards programs–provided that the value proposition on these purchases included quality manufacturing, as well as ethical business practices. Now that the government is evaluating whether businesses should remain open based on whether their merchandise is “essential,” it stands to reason that consumers will also approach potential purchases with this in mind. This is particularly true of Gen Z, who were already skeptical of brand names without a strong value proposition or ethical mission statement.
But if you thought Gen Zers were minimalistic consumers before the COVID crisis, just think about how withholding their purchasing patterns will be when all of this insanity is over. “Is this purchase essential” will be the question on every customer’s mind, and brands will need to cater to this with a utilitarian, practical inventory selection. For cosmetic, accessory, and apparel retailers, this might mean sticking to sustainable “capsule” merchandise collections instead of quick-cycle fashion products that quickly go out of vogue.
Companies Strive to Digitize the Human Touch
Generation Z has always preferred talking face-to-face over digital communication systems. Due to shutdowns, it isn’t an option to chat with stylists or personal shoppers, but customers still want to experience “retailtainment” while quarantined at home. How each retailer provides this will depend on their inventory and core demographic; but social media, robotics and drones, and home delivery will be the trifecta of success in the new retail landscape:
- Social media: Celebrities and influencers are flocking to the Gen Z hangout hub of Instagram Live to create content to entertain a nation under quarantine. As such, there are unique opportunities for retailers to sponsor influencer-driven events such as Q&As, concerts, and live video. This is a great time for brands to creatively mine the potential of influencer’s online followings to drive ecommerce traffic.
- Home delivery: SMBs and mid-sized businesses that offer essential services are rallying to deliver products to customer’s homes. SMBs across the nation are rolling out employee delivery programs to keep up with increased demand as traditional methods of delivery–UPS, FedEx, private delivery companies–slow down.
- Robotics and drones: Welcome to the era of no-touch retail. As businesses large and small strive to maintain competitive delivery practices amidst tightening shutdown orders, retailers may resort to drone delivery to protect employees from COVID-19. (If Instacart and Amazon worker strikes happen as planned, this may become a retail reality more quickly than anticipated before the outbreak.)
Retailers will need to get creative to attract, convert, and deliver to Gen Z consumers during quarantine. Those that built a strong community on social media before the crisis will be uniquely positioned to continue interactions through live video and ecommerce, while retailers that relied on in-person interactions will need to utilize influencers or social media ads to get their message across.
Comfort Over Branding and Sex Appeal
Gen Zers have always prioritized comfort when shopping for apparel, cosmetics, and accessories. They’re not much different from Boomers in that way. But quarantine made young consumers even more focused on product coziness, and retailers are quickly switching the products featured in their social media ads to loungewear and athleisure to reflect this change. Although a few young consumers will continue to shop aspirationally for the day when quarantine finally ends, the broad majority will be most responsive to clothing and beauty products that they can see themselves wearing right away–that means offering deals on skincare-focused cosmetics, bath products, and comfortable clothing over anything overtly sexy (sorry, Victoria’s Secret).
The blunt reality is that Gen Z came of age during a recession and during their lifetimes they will face realities of climate change that were unimaginable to the generations that came before them. Many negative things have been said about this generation’s recalcitrant mentality and purchasing behavior. But while to many of us, a natural disaster like coronavirus once seemed unthinkable, for Gen Z it was a matter of “when,” not “if.” Now their global economic worries have been validated and retailers will need to focus on providing products with real, demonstrable value to continue to compete.