Generation Z – digitally native, ethnically diverse, inclusive, positive, and nostalgic for the 2000s. Born between 1997-2012, Gen Z grew up in times of uncertainty and in a world where technology and digital advancements have played a major role in their lives. With Gen Z being a generation expected to make up a significant portion of the consumer market in the coming years, it’s crucial for retailers to understand them – shopping habits, preferences, and mentality alike.
With many Gen Z consumers turning to online retailers for the convenience and variety of products available, retail physical stores still play a crucial role in their shopping habits. Research has shown that 54% of Gen Z shop only in brick-and-mortar stores and 46% do a mix of online and in-store shopping. This isn’t surprising as Gen Z values experiences and seeks out unique and personal interactions. They enjoy the sensory experience of shopping in a physical store, where they can touch, feel, and try on products before making a purchase. They value the in-person customer service and human interaction that is lacking in online shopping. This social connectedness for Gen Z offers a more personal shopping experience that can leave a lasting impression.
Not only is it imperative for retailers to understand Gen Z’s shopping habits and preferences, but their mindset is also an important attribute to consider. Because of the circumstances that Gen Z grew up in, they have developed social connected, group-centric behaviours for a variety of reasons – an eagerness for belonging and connection, a need for security and stability, and a desire to find and express their own unique identity. A key outcome is the development of tight-knit communities based on shared interests, values, and beliefs. Knowing and understanding this mindset from Gen Z’s and how it translates into consumer behaviour is significant and can be presumed in the following ways:
- Peer influence: Gen Z values recommendations from their peers and trusted sources in making purchasing decisions.
- Authenticity: Gen Z values transparency and are attracted to brands that align with their values, beliefs and have a clear purpose.
- Community building: Gen Z values social connections. Brands that facilitate community building through community engagement, social media, and other online platforms tend to be successful in attracting Gen Z consumers.
- Experience-driven: Gen Z values experiences over material goods and is drawn to brands that provide unique, interactive experiences. Brands like Apple, Lush, Nike, and Lululemon have all exceled in this area. From product demonstrations to great customer/ personalized service, product customization to in-store events, and hyper-local community spaces to educational places – these experiences attract new customers and keep them coming back.
These insights were advantageous when it came to a recent retail design project our team completed – Capa de Ozono in Mexico. The project involved repositioning the brand to target Gen Z consumers more effectively with its fast-fashion proposition. The brand refresh involved designing a new logo, defining a new colour palette and fonts that embody the brand’s personality, and designing a new retail experience that embodies the spirit of this generation.
We transformed Capa de Ozono into a retail environment where Gen Z’s could congregate. We wanted to showcase that this retailer exudes the power of self-expression for like-minded individuals and created an immersive experience with a causal undertone of purpose for the Gen Z consumer in-store.
Our focus for this transformation was to be youth-led but inclusive, a fashion-lifestyle brand for a new generation, a ‘social brand’ with a purpose, a community-builder.
This generation will continue to surprise us – their expectations and needs are going to continue to evolve, and retailers/brands will need to remain nimble and flexible to remain relevant.