Generation Z Drives New Consumer Spending Patterns

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The youth are taking over retail.

Generation Z, successors to the millennials born between the mid-90s and early 2000s, are shifting consumer behavior and spending patterns.

These younger shoppers, according to an HRC Retail Advisory Survey out Monday, have very different expectations of how the want to interact with retailers, and since they are influencing a sizeable amount of consumer spending, retailers would do best to pay attention.

“Generation Z has significant influence over household purchases,” president of HRC Retail Advisory Farla Efros said. “Retailers must appreciate the different expectations and habits of this group, as well as of millennial parents with kids, and develop and execute strategies that address their needs in order to stay competitive with this increasingly important consumer segment.”

HRC looked at 3,100 Gen Z and millennial consumers in the U.S. and Canada to uncover what’s driving their shopping behavior.

Malls aren’t dead, they’re being shopped differently

“Malls are still very popular, especially with Generation Z shoppers,” HRC noted.

More than 60 percent of all respondents said they visit a mall or shopping center at least once a month. For Gen Z (kids age 10-17), that number climbed to 72 percent who say so.

“These shoppers go to the mall with a specific mission and in search of specific items,” HRC said. “Generation Z shoppers also spend more time at the mall and they visit more stores.”

Twenty-two percent of Gen Z visitors said a typical mall trip is more than 90 minutes and they’ll go to four or five stores.

Gift cards top wish lists

Of those shoppers that indicated having a preference, 62 percent they would rather get a gift card than an actual gift. With Gen Z, that number jumps to 69 percent, pointing to a desire to make their own purchasing decisions, HRC said.

Most respondents said the would buy gift cards this holiday and 96 percent of millennials with children and who earn more than $150,000 per year said they would be purchasing gift cards.

Social influences on shopping behavior are shifting

Young shoppers are especially influenced by what other people are purchasing. And it’s not so much what celebrities, athletes and actors are buying—more than 61 percent of Gen Z shoppers said they are most strongly influenced by what their friends buy, and 13 percent pointed to bloggers as a source of inspiration.

When it comes to social media, it’s still playing a very big role in buying decisions.

“The influence of and engagement with social media as it relates to purchasing decisions cannot be overstated,” HRC said.

Roughly 50 percent of millennial and Gen Z shoppers said they use social media while they shop, with most of their time being spent on Facebook (61 percent), then YouTube (38 percent) and Instagram (24 percent).

Amazon leads the way in online shopping

Amazon has consistently been at the top of the e-commerce game, and the retailer is slowing snagging even more of apparel e-commerce market share.

According to HRC, 66 percent of millennials said they place an order online at least once a month, and 79 percent of those who made an online purchase in the last year said they shopped on Amazon.

“The HRC survey sheds light on the changing demographics and influences of existing, emerging and future shoppers,” 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—who still have the great majority of the spending budget—while positioning themselves to best serve the emerging and future consumer segments for longer term success.”


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