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Generation Z, sometimes known as “zoomers,” are truly digital natives, growing up at a time where they take technology at their fingertips for granted. Born between 1997 and 2012, this group of young people may not have as much purchasing power as their elders, but they already know what they like and don’t like when it comes to online shopping. Companies are not only listening, they’re innovating and reshaping e-commerce to appeal to this up and coming group of shoppers in some interesting ways.
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Gen Z Prefers Socially Conscious Companies
For starters, “In terms of shopping trends or behaviors of zoomers, they are more concerned about who they are buying from, and they like buying from eco-friendly or socially conscious companies,” said John Frigo, e-commerce manager for Bestpricenutrition.com. “They care about who the CEO of a company is and the company’s backstory.”
So, companies with a spotty reputation will have to work a lot harder to court zoomers’ dollars.
They’re Changing the Way We Pay Online
Gen Z may be partly responsible for the sudden advent of new ways to pay that don’t involve credit cards, Frigo said. “I saw a stat recently that 70% of zoomers have used one of these buy now pay later apps — Sezzle, Klarna, AfterPay, etc. — and they are beginning to use them more than credit cards.”
In fact, Gen Z may be less willing to buy on credit than previous generations, Consumer Analyst Julie Ramhold with DealNews.com said. “It’s opening the doors for alternative payment options. This includes things like PayPal, Apple Pay, Google Pay and to some degree, buy now pay later programs, as those work differently than traditional credit cards.”
Indeed, a GoCardless study found 84% of 18- to 24-year-olds would like to decrease their use of credit cards, and 87% of 18- to 24-year-olds would rather use no-interest installment providers than credit cards.
Moreover, according to a study released by Alliance Data, Nearly 80% of Gen Z wants to manage all of their accounts in one place and digitally pay from whichever they choose; half of Gen Z uses PayPal for purchases, and they prefer person-to-person apps such as Venmo.
See: Millennials and Gen Z Want To Retire by 60 — One Expert Points Out Major Obstacles to Their Plans
Credit Card Companies Will Have To Offer More Perks
As a result of their distaste for credit, Ramhold thinks that traditional credit card companies will change their offerings to appeal to the younger generations. “We may see more cashback rewards offered, for instance, versus earning points or something like that.”
Another way that Gen Z is uniquely different when it comes to shopping is that they are more into “social shopping,” said Ramhold, utilizing existing social media channels as a way to connect around what and how they purchase. “Pinterest has already started moving into this area, as has TikTok, and others will undoubtedly jump on board the bandwagon,” she said.
What this means is that younger folks “are purchasing based off influence,” said Brian McMahon, CEO and co-founder of Pickle, a social commerce platform. Zoomers are heavily influenced by influencers, he said. “Stylists or creators or general lifestyle influencers on social platforms like TikTok and Instagram have a lot of influence over people’s purchasing behaviors which has led to trend of social commerce.”
This means that commerce sites are turning more to influencers for their marketing and pushing out products, McMahon said. “We expect this to accelerate.” Pickle is an example of “a third place of influence: the wisdom of the crowd.”
Social commerce platforms “aim to combine efficiency of online shopping with social benefits of shopping in real life, with friends, talking to people in store… which we lose a lot of online, it’s very siloed.”
He believes that social commerce “is the next evolution of shopping after e-commerce.”
Read: What To Do If You Can’t Afford Your Student Loan Payments
Online Shopping Over Brick-and-Mortar Stores
Another casualty of zoomers’ love of online shopping is that “Brick-and-mortar stores are becoming more irrelevant as the retail industry improves the online experience, thanks to the younger generations,” said Corey Ashton Walters, founder and CEO of Here, an online marketplace. Consumers can easily shop for pretty much anything from the comfort of their own homes to avoid long checkout lines and uncertain inventory amounts, especially during the holiday season.
According to a GoDaddy survey, 65% of Gen Z respondents would shop more from small businesses if they had the option to purchase items online; two in three Gen Zers (66%) said they would be more likely to purchase from a small business if they can place their order for delivery or pickup; and both Gen Z and millennials would be happy to never have to step foot in a large chain store again.
Seeking a Tailored Experience
Gen Z also tends to look for tools and services that are specifically tailored to meet their unique expectations — whether that means easy accessibility online, communication done via text, seamless/intuitive processes or greater flexibility options, according to Farrell Hudzik, EVP of financial institutions at Cardlytics.
“In response to these wants and needs, newer products and services have gained popularity. For example, the demand for flexibility in payment methods led to an uptick in services like buy now pay later, peer-to-peer lending and a greater variety of credit offerings. It’s no surprise the generation of digital natives wants to hold greater power with their purchasing decisions — and this has led to a rise in non-traditional financial services, a greater interest in convenience and a heavy emphasis on fully digital offerings.”
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