It’s very in vogue to identify the newest customer subset and apportion too much importance to what they do. But in the case of ecommerce and Gen Z, this generation really does shine the light on what commerce will look like in the future.

When it comes to who’s doing ecommerce best, we always advise to take a look at the likes of Amazon. And what Amazon does really well, is look to the future. Their planning extends out into decades, whereas most organisations find it hard to get past the month, the quarter, or at a stretch, the next year.

So, if planning for the future is vital, then knowing what the future customer will be doing is even more important. Drawing on insight from the new Future Shopper 2019 report, here’s a quick snapshot of some of the key findings about Generation Z that we think will impact the future of commerce.

To prepare for the future, you must nail your social strategy, because social media is where Gen Z goes for inspiration.

When it comes to getting inspired, what’s clear is that Generation Z is all about social. Among 16-24 year olds, 49% look for inspiration in social – that’s compared to an average of 32%. When you think about it, it’s not really that surprising. Instagram and Snapchat are defining young people’s interactions. (And by they way, doesn’t that make it all the more peculiar that cosmetics brand Lush has now decided to quit social media).

But what’s really important to pull out from this trend, is what happens next. And the answer to that is social commerce.

The social platforms have built a space where the future consumer goes to get its inspiration. But after that… nothing. In fact, from a basis of 49% looking for inspiration, just 15% actively use social for product searching. So, when this generation wants to turn its inspiration into search or purchase, it is forced to leave.

But not for long. All of the platforms are looking at how to retain and sell to this captive audience. And once the whole transaction can take place natively, then what we’re faced with is a whole new set of marketplaces and retailers.

The message is clear. If you want to secure a slice of young consumers’ attention, then you need to be in social. If you want to secure a slice of their wallets in future, then you need to be ready for social commerce.

To prepare for the future, you need a strong balanced strategy which includes D2C and an appreciation of Amazon’s limitations, because increasingly, Gen Z is rejecting the “traditional” digital behemoths.

What’s also interesting about Generation Z, is that they like to go direct to source. Of all the age groups in our study, we found that Generation Z is also most likely to use brand websites to find inspiration.

Why is this interesting? Well in a world where Amazon accounts for 35% of all online purchases in the UK and 52% of all online purchases in the US, when defining ecommerce strategies, it can be hard to look beyond Amazon’s (digital) walls. But look beyond it organisations must, because Generation Z more than any other group (39% vs 29%) are less likely to believe that marketplaces provide the best experience when it comes to access to brands, easy returns and customer service. This, in turn, means that a brand’s D2C presence is absolutely vital.

But investing in digital destinations that aid brand equity building just won’t suffice. With customers craving ease, speed and convenience, and with this resulting in a compression of the online sales funnel (i.e. customers want to get inspiration, search and purchase faster, and in one location) brands must look to convert interest in their digital destinations into online purchases.

To prepare for the future, you need to operate ethically.

Another element working against the likes of Amazon is Generation Z’s dedication to ethics, with almost one in five (18%) saying that they were swayed by brands ethics when making a purchase decision. And what’s clear about Amazon, no matter how good its service is, is that its dedication is to scale and profit, not ethics.

So, what must organisations do? They must think and operate ethically. Ideally, they will have ethics at their core, but at very least, they must be seen to support ethical causes and initiatives. Starting to develop, hone and communicate your ethical brand values will be essential for online success with Gen Z.

But just one word of warning here; customers are also getting increasingly demanding, and Gen Z is part of that - in fact 8%, the highest value of any age group, wants delivery within 3-12 hours. Managing the diametrically opposed objectives of performing ethically but offering faster speed, better convenience and improved ease will be a major challenge.

To prepare for the future, you need to prepare for omnichannel physical retailing.

Barely a day goes by without another high-street retailer going into administration. These regular obituaries would seem to lead us to the conclusion that physical retailing is doomed. But listen to Generation Z, and the “truth” becomes a little more clear.

Because, in fact, 53% of Generation Z say that they would prefer to shop with a brand or a retailer that has both a physical store and an online store.

So, the demise of the high street is less about the death of physical retailing, and more about the lack of retailers providing consumers with experiences that they want. Because 52% of Gen Z said that they expected that physical experience to be innovative.

The days of dull, transactional retailing, are numbered, and we will usher in an era of highly immersive and experiential physical retailing.

And what about their future spending? Well online purchasing, according to Gen Z themselves, is going to increase – 67% said that they intended to increase their online spending in 2019.

CONCLUSION

So, what are we saying? Well, it can be all too easy to get caught up in the coolest, trendiest and newest customer subset, and we’re certainly not advocating basing entire strategies on this young group of consumers. But what we are saying is that to safeguard your future, it’s vital to analyse and take strategic cues from what the future customer is saying.

FURTHER READING

Brands that wish to be in a strong position to connect with this upcoming generation of customers need to be strong in social, because this is where they go for shopping inspiration. The unstoppable rise of social and the increasing importance of a direct-to-consumer approach to connect are just two of the key brand challenges we explore in a new report “Brands and Ecommerce – What the Future Has In Store”.

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Written by Hugh Fletcher

Head of Thought Leadership (EMEA) and Head of Marketing (UK)

Hugh is a go-to spokesperson for tech trends impacting eCommerce, and one of Wunderman Thompson Commerce's most prominent thought-leaders on digital innovation and change.

A note about the Future Shopper 2019 survey

Research for this Future Shopper 2019 report was conducted by independent research consultancy Censuswide. A total of 15,188 consumers, who shop online at least once a month were surveyed, across 8 international markets, led by UK and US.