This year Gen Z will surpass millennials as the largest generation. The oldest members of Gen Z are in their early 20s and, as consumers, they\’re a force to be reckoned with. When we talk about retailing for Gen Z, mobile commerce needs to be at the forefront of the conversation. Gen Z has a 30 percent higher engagement rate than older generations in non-gaming apps. This isn\’t because Gen Z shop on mobile devices to the exclusion of other channels (you\’ve all seen the stats on Gen Z\’s return to physical retail), but because young consumers use mobile as an essential touchpoint along their shopping journey.
Gen Z consults mobile devices multiple times along their path-to-purchase. The idea of a potential purchase turns to intent through a ping-pong effect between mobile, digital, and physical retail. Without the ability to do this, their burgeoning intent to buy a product can just bounce off into the ether.
Apps Need to Inform the Physical Experience
It\’s not just Gen Z that\’s taking a fancy to app-driven retail. Shopping app usage is growing across demographics, with in-app shopping sessions increasing 70 percent to more than 60 billion sessions between 2016 and 2018. Generation Z aren\’t the only one consulting retail apps, but they are the generation with the highest expectations for in-store/social media/in-app cohesiveness. There are three ways that mobile devices advise Gen Z\’s shopping experience:
- First off, mobile devices are where Gen Z consumers get the initial inspiration to drive the purchase;
- During the consideration phase, mobile is where they get the product knowledge necessary to inform the sale;
- Finally, they rely on mobile to get the peer approval necessary to solidify their intent to purchase.
Young consumers are most interested in apps that highlight the intersection of physical and digital retail, such as: apps that leading them to store locations, advertise in-store events, or make other hyper-local suggestions like where to eat or on-brand extracurriculars. But apps need to serve a function to be relevant. They need to facilitate the physical shopping experience by saving consumers time or money and provide a place where potential consumers can interact with brand advocates. A whopping 58 percent of Gen Z shoppers have already used BOPIS, for instance. Considering that most of my friends (urban, elder millennials) used BOPIS for the first time this year, this points to a significant difference in normative shopping behavior and expectations for retail apps.
What Makes an App Compelling?
Retailers need to have a curated mobile presence to develop trust with next-gen consumers. So, what drives this ad-weary generation to visit a retailer\’s app? Let\’s look at the apps that Gen Z uses the most often to answer this question: Instagram, Snapchat, and YouTube. Both Instagram and Snapchat have content that\’s only available for a limited time and they give app users a near real-time glimpse into their friends\’ daily lives. Gen Z also loves Periscope–which is straight up live video streaming, and TikTok for highly-curated video shorts. Their favorite apps are highly visual, highly informative, video-focused and hyper-social. And, for bonus points, their parents aren\’t on them.
[callout]Gen Z’s idea of a potential purchase turns to intent through a ping-pong effect between mobile, digital, and physical retail.[/callout]
Pop-up and banner ads get low ratings from Gen Z. Since they\’ve been inundated by advertising, the apps they prefer are full screen and easy to navigate. And mobile window shopping–or researching products they don\’t intend to buy right away–is a popular pastime. Again, it\’s that intersection between digital and physical that turns ambivalent Gen Z scrollers into paying customers.
If You Make It Social, They Will Come
If retailers don\’t have an app and social media outlets, they run the risk of increased returns. A 2017 HRC Advisory study found that, when trying on clothes in-store, 38 percent of Gen Z shoppers sometimes reach out for feedback on social networking sites or over text message, and 13 percent always look for feedback before they convert. The same study found that 41 percent of Gen Z consumers have decided not to make a purchase based on negative feedback they\’ve gotten online, and 21 percent have actually returned a product based on negative online comments. Enabling Gen Z customers to reach out for feedback before the purchase will ensure that they get the feedback they need to drive the sale when applicable and to prevent returns when necessary.
When it comes to customer service, Gen Z will reach out to whatever resource is the most informative to get the product information they need. If this is an in-store associate, then kudos to the retailer, but if store associates aren\’t knowledgeable then Gen Z won\’t hesitate to whip out their smartphone and do the research on their own. Incentivizing customers to provide reviews through user-generated content, loyalty rewards, or by giving them a discount on future purchases can help retailers give Gen Z the social proof they need that the purchase they\’re considering making is a worthwhile investment.
The Online Customer Service Conundrum
Gen Z consumers will inevitably reach out for customer service on a retailer\’s app or social media outlets. If this customer service is deemed subpar, or it doesn\’t come quickly enough, the retailer runs the risk of losing that customer forever. Losing customers due to poor online customer service isn\’t a rarity. In fact, 22 percent of Gen Z shoppers have decided not to make a purchase after having a bad online experience a purchase three to five times in the past year alone! By comparison, 15 percent of millennials stopped an online purchase year because of a bad online experience.
To prevent customers waiting too long for a response to their online questions, many retailers wind up outsourcing customer service functions to third-party overseas providers. However, this can be bad news when it results in already distraught online customers being funneled to providers who aren\’t familiar with the brand–or for whom English or Spanish is a second language they haven\’t yet mastered. Keeping customer service functions in-house poses its own set of problems…not all retailers will be able to respond to consumer demands quickly enough or afford to hire the necessary staff to appropriately address issues that arise. Finding a great contractor or firm can be a saving grace when it comes to customer service. And retailers should only work with firms that are willing to take the necessary time to become thoroughly familiar with their brand, its products, and its policies.
Bringing It All Together
The truth is, Gen Z consumers are a little high maintenance when it comes to their expectations for digital/physical retail integration. Apps that aren\’t up to snuff result in lost opportunities to turn whippersnappers that are just browsing into full-fledged consumers. But no successful retailer got into this business because they resist change. Those that take the time to integrate their mobile and physical presence will be positioned to tap into the wallet share of the largest customer generation ever…and if that doesn\’t excite you, then you\’re in the wrong industry.