Gen Z Shopping Habits May Kill Off Unprepared Brands

Gen Z kids on their phones can you believe it?

For the past decade, brands and retailers have scrambled to serve millennials, the first internet-obsessed generation that forced them to rethink their online selling strategies. Now, they are reinventing for Gen Z or “Zoomers” as they gear up to enter the workforce and are fast becoming a formidable force in the economy.

Brightpearl’s own data of 4,000 shoppers reveals that Gen Z, those born between 1997-2012, will not simply be an extension of the previous generation, but will fuel a massive shift in how people shop, and many retailers are woefully unprepared.

Disruption: Incoming

Zoomers are truly digitally native, and are increasingly turning to new ways to create their own personal brand, and use social media and livestreaming as discovery, community and purchase mechanisms. To them, Alexa, Pinterest, Tik Tok and Instagram combine entertainment and shopping.

Brightpearl found that 77% of young shoppers are now buying through new digital channels. Three-quarters 18-24-year-olds plan to shop via alternative channels this holiday season, and the same number want retailers to make non-traditional channels easier to shop in future. Furthermore, 66% prefer to shop with brands that support non-traditional channels.

This data proves that a smooth transaction and quick delivery are no longer perks but baseline expectations. We found that more than half of Zoomers said it was easier to interact with friends by shopping on digital channels where they already socialize and seek entertainment. This isn’t surprising, as our world has become an enmeshed blend of digital and physical, where young teens meet up on Fortnite after school, music lovers watch livestreamed concerts, and families use Zoom to catch up.

Zoomers are not willing to compromise on experience, wanting to be entertained and inspired when buying online. Retailers must be ready to meet them there or risk leaving money on the table, because these changes aren’t a fad or a short-term trend. Gen Z consumers are going to keep growing in purchasing power. Nearly half of U.S. internet users aged 18-34 made a purchase on social media last year.

Glancing even further into the future, subsequent generations will be even more digitally savvy. Thus, brands must be flexible and nimble enough to quickly introduce different digital and social commerce options, swapping them out as needed.

Retailers Are “Swiping Left” on Digital Trends

Despite the clear move towards new ways to shop, the majority of retailers are responding very slowly to these changes. Some are rejecting them outright, while others are woefully unprepared. Shockingly, a quarter of retailers still aren’t integrated with social commerce, including some of the largest brands. Very few businesses facilitate non-traditional ways of shopping like Instagram, Pinterest, voice and livestream, and many fail to grasp the urgent need for change.

For many retailers, monolithic platforms that underpin their operations such as ERPs are the very things preventing them from being more flexible and able to adapt rapidly to meet consumer expectations.  

Modern Tech for Modern Consumers

1990s fashion may well be back in vogue, but relying on outdated technology is not a good look when it comes to meeting Gen Z expectations.

Monolithic architecture is notoriously inflexible and difficult to scale. In fact, leading U.S. brands admit that being locked into a service from an ERP vendor is holding them back.

Our research highlights that 90% of them are concerned that a single-vendor ERP approach to ecommerce is limiting their ability to quickly deploy better shopping experiences, keep up with customer expectations and sell more.

What’s more, 71% of U.S. merchants agree that their current ERP makes it nearly impossible to integrate new, better ecommerce technology at a pace they would like. It’s a similar story in the UK, with half of all British firms saying the same thing.

Gen Z-led digital disruption, combined with inflexible technology, is a recipe for disaster that could kill off unprepared brands.

There’s no doubt adding and then managing new selling channels while delivering a joined up and consistent experience will be a challenge. But aging systems will make keeping up with the pace of change so much harder because they simply aren’t built to be agile. ERPs and monolithic architecture can take months or even years to integrate new channels. As a modern brand with modern consumers, you simply can’t afford to wait that long. You can be certain your competitors won’t.

Luckily, there’s a simpler option. Of course, adding new channels can unearth operational complexities but, with the right hyper-scalable operating system these can be minimized. You’ll need a system that offers complete visibility across all channels, as well as the flexibility to integrate, manage and upgrade channels and applications to meet consumer demand.

The truth is cookie-cutter strategies from a single vendor no longer work for merchants seeking to deliver the very best ecommerce experiences.

Brands that are able to manage an ever-changing roster of digital applications and new selling channels rapidly already have the advantage, outpacing competition by 80% in the speed of new feature implementation, according to Garter.

For those willing and able to grasp the opportunities that emerging digital channels brings, there’s never been a more exciting time to be in business. Merchants that act now can become trailblazers, leaving their competition in the dust.

Mark Hook is global director of brand and communications at Brightpearl