Capturing the Gen Z Market: Understanding Buying Habits and Trends

As generations age and their purchasing power fluctuates, retail trends emerge and understanding the preferences of different demographic groups is crucial for businesses aiming to thrive. Among these demographics, Gen Z, born between the mid-1990s and early 2010s, represents a significant market segment with unique buying habits and preferences. As retailers seek to engage and capture the attention of this tech-savvy and socially conscious generation, it’s essential to stay informed about the trends shaping their consumer behaviour.

Who is Gen Z?

Generation Z, also known as Zoomers, is the generation that grew up in a digital world, surrounded by technology and social media from a young age. Unlike Millennials, Gen Z don’t typically remember a time before the internet. They are characterised by their tech fluency, entrepreneurial spirit, and commitment to social causes and sustainability. With an estimated population size of over 2 billion worldwide, Generation Z represents a formidable force in the consumer market.

Let’s explore some of the top Gen Z shopping trends:

1. Buy Now, Pay Later (BNPL) Revolution

One prominent trend shaping Gen Z’s buying habits is the rise of Buy Now, Pay Later (BNPL) services. This alternative payment method allows consumers to make purchases and pay for them in instalments, often interest-free.

Generation Z, in particular, has shown a strong interest in BNPL, with projections indicating that they will constitute the largest demographic utilising this payment option by 2026 at 59%. Retailers that integrate BNPL solutions into their checkout process can appeal to Gen Z’s preference for flexibility and budget-conscious shopping.

2. Bracketing: The Era of Try Before You Commit

Although this trend is not limited to Gen Z shoppers, they are no stranger to ‘bracketing’. This practice involves purchasing multiple versions of the same product and returning the ones that don’t fit or meet expectations. Gen Z values convenience and customisation, and bracketing allows them to experiment with different options without the commitment of a final purchase. Retailers can adapt their return policies and offer hassle-free return processes to accommodate this behaviour and maintain customer satisfaction.

However, bracketing can be a real hassle for retailers to manage so a strong inventory management system is an essential investment. It’s also possible to mitigate bracketing by ensuring that your eCommerce website is well designed and provides a wealth of product information such as high quality images and close-ups, colour descriptions, size and fit guides.

In an article by Retail Dive, Oded Edelman, President of JamesAllen.com has taken this a step further to capture the Gen Z market. Their ‘Diamond Display Technology’ provides a virtual ‘try on’ feature which allows prospective buyers to see how a piece of jewellery looks on their hand before purchasing. While diamond rings may not be high up on Gen Z’s priority list, this technology goes a long way to showing how retailers in any vertical need to be prepared to invest in innovative solutions to assist Gen Z in ditching bracketing habits.

3. Social Media for Product Discovery

Social media plays a pivotal role in shaping Gen Z’s purchasing decisions and retailers successfully capturing this generation maintain a strong presence across platforms like Instagram, TikTok, and Snapchat.

In a study by Insider Intelligence, 45% of Gen Z bought their most recent social media due to finding a product that they liked. Surprisingly, influencer/content creator recommendations and company brand names have less influence on Gen Z’s purchasing choices compared to product discovery. Engaging content, authentic storytelling, and user-generated content are key drivers for capturing Gen Z’s attention.

4. Brand Loyalty Matters

While Generation Z is often perceived as fickle and trend-driven, they do exhibit brand loyalty, especially when brands align with their values and offer exceptional experiences. In fact, 64% of Gen Z consumers are willing to pay more to support brands they love, and they’re less likely to switch to competitors than older age groups.

Building a strong brand identity, prioritising sustainability and social responsibility, and fostering genuine connections with consumers can cultivate long-term loyalty among Gen Z customers.

5. Omni-channel Shopping Experience

Gen Z embraces omni-channel shopping seamlessly, utilising a combination of online and offline channels throughout their purchasing journey. From browsing products on social media to watching unboxing videos and reviews on YouTube, Gen Z leverages various platforms for product research and comparison.

Retailers must adopt an omni-channel approach, ensuring a seamless shopping experience across all touchpoints, including mobile apps, websites, social media, and physical stores.

Conclusion

To effectively capture the Gen Z demographic, retailers must prioritise flexibility, convenience, and authenticity in their offerings. Integrating BNPL options, optimising social media presence for product discovery, and fostering brand loyalty through meaningful experiences are essential strategies. Additionally, embracing an omnichannel approach and adapting to evolving consumer preferences are critical for staying relevant and appealing to Gen Z consumers.

Understanding the buying habits and trends of Generation Z is paramount for retailers seeking to thrive in today’s market. By embracing innovation, leveraging technology, and prioritising authentic engagement, retailers can successfully capture the attention and loyalty of this influential demographic.

Why Choose RMS?

RMS have worked with ambitious businesses since 2004, supplying tailored software solutions and EPoS hardware from the Shetland Islands to the Seychelles. We work with businesses in most retail verticals, contact us and discover how RMS and OpSuite are perfect partners for capturing the Gen Z Market.