Gen Z Insights From Retail

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Happened upon an article on LinkedIn titled "Generation Z - What Can Retail Tell Us About The Future Of The Workplace".  Very interesting read and perspective. Kelly Darby makes it clear not to lump this generation in with Millennials...

"Generation Z, born between 1999 and 2015, is an age-group who have always been connected. Born totally inside the rise of public use of the Internet, this group has different needs, desires and traits. These are NOT Millennials, and they take offense at being bundled together with a group of people that still remember answering machines, beepers and pay phones. This is Gen X’s kids we’re talking about—and their independence and self-reliance mirrors their latch-key-kid parents. Retail markets have already documented differences between the Gen Z and Millennials, and a dive into this data can bring to light information important to those in the real estate and design industry.

A force of 73.6 million, Generation Z is on track to be the largest population group outside of the Baby Boomers. The biggest misconception that exists right now is that Generation Z will simply be an amplification of Millennial preferences and values. Current research points that this is not the case; they are more self-aware, self-reliant, innovative and pragmatic. 1 Some research points to the preference for “safety zones” which could mean more offices, private or quiet zones, or preparing for groups that want to hotel for longer than their Millennial colleagues. 2

VIRTUAL IS REAL

The most striking difference between Generation Z and the other generations in the workforce is their native fluency in technology. 66% of respondents in the “Uniquely Gen Z” research study performed by IBM and the National Retail Federation say that they frequently use more than one device at a time. 87% say that they have high-speed internet at home and 25% of respondents said they spend more than five hours on their mobile phones every day 3. A story that demonstrates the “Virtual is Real” mentality is related below:

“I told you to be there,” generational expert David Stillman recalls harping at his seventeen-year-old son Jonah, who opted to Skype rather than drive downtown to meet with a prospective client. “I WAS there,” Jonah replied. 4

In our practice, we have see this slide towards real-time customer service video conferencing popping up in retail banks and credit unions. Financial retail is one sector which has had to keep up with technology to stay relevant. After all, Generation Z is being consulted by older members of their families on purchases, especially “big ticket” items or items regarding technology. Ninety-three percent say their children have influence over the family’s spending 5, and it’s natural that the financial industry has already taken notice of this tech-savvy generation.

At Georgia’s Own Credit Union members can quickly video chat in real-time with an account manager who can pull all of their information up at once. If they need a more in-depth conversation, the customer service representatives are available to discuss wealth management or other needs in a private office. At Synovus bank branches, there is a self-service counter of iPads, a concierge desk should one need to check in for an appointment, and multiple customer service points for longer in-depth meetings.

A PRAGMATIC VIEW-POINT: DIY CULTURE

Generation Z grew up in the middle of the Great Recession, which means that for most of their life they have learned to “do without”. This explains a good deal of their relative pragmaticism compared to Millennials 6. They have relative little brand loyalty compared to Millennials at the same age, instead preferring unbranded stores or highly customizable brands such as Vans, Converse, Instagram, Snapchat and Pinterest. Surprisingly they prefer to shop in brick-and-mortar stores and shopping is a group activity 7. Warner Summers Principal Dana McClurerecalls a question posed by Lynne O’Brien at a CREW Atlanta lunch, “Who has teenagers at home that shop at Goodwill?” A group of about 20 hands went up in a room full of 200.

Like a “throw-back” to the “Silent Generation” which grew up in the Great Depression, Gen Z avoids risky behaviors and prefers safety and sensibility. Lower underage drinking and high seatbelt use are just a couple of statistics that back this up. Predictions are that they will choose sensible college majors and careers to avoid debt 8. Another job sector which could continue to grow are incubators for entrepreneurial companies. Children as young as 8 years-old (!) have found ways to monetize their on-line presence. A startling 22% of those surveyed make money online. Another interesting indicator that they are more sensible is that Gen Z-ers are less inclined to share private information on the internet, preferring ephemeral social media such as Secret and Snapchat over Facebook which leave more permanent traces of activity.

SUMMARY

Although Generation Z is still young and their tastes will surely develop, the habits that the develop now will impact their future tendencies. Retail trends such as “Virtual is Real”, preference for unbranded or heavily customized brand, a resounding pragmatic view towards money, privacy and social media, and an affinity for visiting brick and mortar stores versus online can give us some insight on predicting what the future will hold when Generation Z enters the Workforce."