Study Identifies Generation Z’s Influence on Retail

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A new study by notes the profound influence that Generation Z (youth aged 10-17) is having on household spending in Canada, with five specific findings discussed below. Retailers should particularly take note, as about 40% of Canada’s population will comprise of Generation Z by the year 2020, according to the study. 

The study surveyed 3,100 participants (split between Generation Z youth and their parents), gaging their attitudes, shopping habits and what influences drive their purchasing decisions.

Generation Z already has a profound influence on household spending, according to HRC Retail Advisory President Farla Efros.  In order to remain profitable, Canadian retailers will need to recognize Generation Z’s nuances when targeting and serving them. 

“Retailers must be nimble in order to effectively appeal to Generation Z consumers,” said Ms. Efros. “Resonating with this group at a young age can have a huge impact on retailers’ long term consumer retention and brand loyalty. Social media and digital advertising will be dominant in marketing strategies targeted to Generation Z, but retailers must adopt these mediums in interactive ways to inspire and engage this emerging generation of consumers.”

The study found, after assembling and analyzing the data, that:  

1. Generation Z Strongly Influences Parents’ Purchases: The group has a ‘strong voice’ and expects to be heard, especially when it comes to what their parents are buying — 82% of parents surveyed admitted that their children have some influence over purchasing decisions, while 93% of Generation Z respondents said that they have influence over certain categories such as clothing, footwear, accessories and cosmetics.
 
2. YouTube Tops Facebook As Most Visited Social Platform: YouTube is the top social platform for Generation Z, with 54% of respondents stating that they visit YouTube daily for information. This is a significant deviation from Millennials, who named Facebook as their most visited social platform. Furthermore, about 50% of Generation Z visits Facebook daily, with Instagram and Snapchat falling behind at 34% and 29%, respectively.
 
3. According to Generation Z, Malls are Not Dead: Despite being raised with the internet, Generation Z is still going to the mall to shop. While approximately 60% of all survey respondents said they visit a mall or shopping centre at least once a month, a whopping 72% of Generation Z respondents said they visited the mall at least once a month and stayed for at least an hour, visiting 4.4 stores on the trip. About 60% of these high frequency visitors go to the mall with a clear intention of making a purchase for themselves, as opposed to just browsing or socializing. 
 
4. Generation Z Votes Friends as Most Influential: Retailers will need to reconsider the implications of their selection of spokespeople to represent their brands. 62% of Generation Z respondents deemed friends as the most influential party on their buying decisions. Athletes came in a distant second at 14%, with bloggers/YouTubers closely following at 13%. Celebrity and singer endorsements were ranked the lowest, at 6% and 7% respectively. 89% of Generation Z respondents also said they would be more likely to enter a store based on where their friends shop.
 
5. Digital is in their DNA: Generation Z buys online, and frequently. 50% of Generation Z respondents stated that they shop online at least once a month. Of those making online purchases within the last 12 months, 77% stated they have purchased something from Amazon, and 34% have purchased something from eBay.

After posting these findings, HRC Retail Advisory notes that retailers need to consider the following five factors to most effectively serve Generation Z consumers:

  • Depict them as diverse (ethically, socially, and fashionably),
  • Communicate more frequently in short bursts, using content,
  • Allow them to personalize, and give them control and preferences,
  • Talk to them about values and social causes, and
  • Instead of creating demand using Hollywood celebrities, use real people or internet/YouTube stars to market your brand. 

The study’s findings are remarkable, and could signal the end of major celebrity endorsement deals in the future — at least those using Hollywood celebrities, musicians and the like. 

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