Recent years have seen retailers training their sights squarely on millennials. As this ‘Generation Y’ matured, retail transformed alongside it, embracing the technology these customers depend on and seeking to provide the innovation they expect.

Now, a new generation of consumers is rivalling the millennials for retailers’ attention. Aged 20 or younger, Gen Z is coming of age as a consumer force. And these are the true digital natives: they have always known technology, and their shopping habits reflect this.

Recent Accenture research based on a survey of almost 10,000 millennial and Gen Z consumers from 13 countries (including 750 from the UK) suggests Gen Z behaves differently from its older peers. To maintain their competitive edge, retailers need to adapt their offers and invest in the right digital tools and capabilities.

So what is Gen Z looking for? Here, we outline seven ways in which retailers can win their loyalty – and their business.

1. Master social media

Over two-thirds (68%) of Gen Z consumers in the UK are enthusiastic about purchasing directly from social media. Retailers cannot afford to ignore this, and should strive to connect with consumers by developing their brand’s presence on these platforms. The best way to do this is through visuals – interactive videos and images – which are much more likely than text to capture and hold the attention of these young shoppers.

2. Reinvent your shopping methods

About three-quarters (76%) of UK Gen Z consumers say they like the sound of curated, subscription-type offers for fashion (compared to 45% of millennials), while 61% would shift more than half of all purchases to retailers that can offer automatic replenishment programs. Gen Z consumers are also open to experiment with new commerce technologies – 52% say they are willing to try voice-activated ordering, for example.

3. Understand the Gen Z decision-making process

Before making a purchase, Gen Z consumers are more likely to seek recommendations from family and friends or from social media users. Retailers should take advantage of their reliance on feedback and include, for example, users’ testimonials in their brand campaigns. They will also benefit from developing sophisticated ‘social listening’ tools that provide them with data on what social media influencers and potential influencers are saying.

4. Satisfy Gen Z impulses

While they like to collect a lot of information before they make a purchase, Gen Z consumers are also impulsive buyers. And when they order online for delivery, they want to receive their purchases as quickly as possible: 60% say that they would pay more than £4 for one-hour deliveries. This impulsiveness offers retailers new opportunities to add value: developing experiences and telling stories that pique and hold the fleeting attentions of these shoppers, and investing in rapid fulfilment.

5. Don’t forget the in-store experience

Despite the ease of online shopping, six in ten Gen Z consumers still prefer shopping in store. This means that retailers should reimagine not only their digital, but also their physical shopping spaces and make them a showcase for discovery and engagement for the brand, offering rich, dynamic interactions that turn the store into something to be remembered, worthy of creating lasting relationships with Gen Z. This could mean incorporating technology, providing interactive and personalised experiences, or giving sales assistants the tools to enhance the experience – shifting their role from selling product to supporting customer participation.

6. Develop your brand

To win younger shoppers’ loyalty, retailers need to reimagine their brand according to Gen Z preferences. Investing in shareable experiences and digital engagement is a must, but we find that being ethically and environmentally conscious will also win over Gen Z – these consumers are increasingly concerned about the impact of their shopping decisions on society and the planet. 

7. Pay attention to local differences 

There are many similarities between Gen Z shopping habits in different parts of the world, but there are also some pronounced differences. In China, Gen Z are more likely than elsewhere to shop online and exploit social media. In Sweden, they are almost twice as willing as the global average to buy direct from social media. Being in tune with local expectations and understanding these local differences will make Gen Z consumers feel valued, which will in turn help boost your sales.

Shoppers born in or after 1997 have increasing purchasing power. For retailers, this is an incredible opportunity. But to succeed in this increasingly digital world, retailers must understand Gen Zs’ expectations and behaviours and rethink the use of the various touchpoints; online, mobile, stores, social media, marketing and loyalty schemes to reach and entice brand affection from a generation that is shaping and commanding today’s digital retail landscape.

By Jill Ross, managing director in Accenture’s Customer & Channels Practice for Retail.