September 20, 2017

IRI announced initial findings from an ongoing study into the shopping attitudes and behaviors of Generation Z (aged 21 and under), providing manufacturers and retailers valuable insight into how to effectively communicate and activate with this new generation of consumers. Gen Z is just beginning to form their shopping habits, brand loyalties and purchase preferences, and as their influence and actual purchasing power grows, IRI’s findings show that manufacturers and retailers will need to adjust their marketing strategies to meet the distinct behaviors of this new generation.

“It is clear that Gen Z will be different from millennials and the generations before them on many levels — on top of being the most culturally diverse shopper population to date, Gen Zers are already forming unique purchase motivators and preferences,” said Robert I. Tomei, president of Consumer and Shopper Marketing and Core Content Services for IRI. “It will be critical for manufacturers and retailers to have a deeper understanding of these young shoppers as they gain influence and purchasing power, and leverage the power of personalization to reach them. With our sophisticated data-based solutions that consist of millions of shoppers and attribute-specific insights, IRI is uniquely positioned to help marketers activate against the diverse and powerful Gen Z market.”

The emerging research from IRI’s ongoing study helps describe the distinct characteristics that differentiate Gen Z from previous generations. Initial survey findings of those aged 14-21 include:

Brick & mortar holds its own against online. Gen Z sees both brick & mortar and online retailers being equally able to deliver the brands they want — a large product selection, low pricing and enjoyable shopping experiences.
Social media plays a far bigger role in influencing Gen Z purchase decisions than pricing or discounts. Gen Z is two to three times more likely to be influenced by social media than sale or discount pricing when making purchasing decisions, making them the only generation to be more driven by social media than price.
Ease of the shopping process has substantial influence. Gen Z is more likely than any other generation to choose a retailer based on how easy it is to find what they want, including millennials.
It’s not just a price game for Gen Z. The ability to find what they’re looking for in the store is as important in driving retailer choices as low prices.

IRI’s survey also found that as the first native digital generation, Gen Z expects to find savings at the touch of a button. While Gen Z is still not yet doing the majority of their own shopping, more than 25 percent of Gen Z members already engage with retailer apps for discounts and promotions, compared with 33 percent of millennials. These findings confirm the digital, social-centric shopper experience Gen Z will seek out, whether shopping online or in-store.

“One of the most interesting and compelling parts of Gen Z’s social media usage is related to how much they expect to be a part of the brand/retailer conversation. Our work with Gen Z to date suggests that they reject inauthenticity and being ‘marketed to,’ but they are not against marketing and advertising altogether,” said Lynne Gillis, principal of Survey and Segmentation for IRI. “What makes Gen Z different is they see and embrace the opportunity to be influencers, whether it’s among their own circle of friends or a broader audience. This has tremendous implications for how brands and retailers engage them in the marketing and advertising process.”

 

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