Marketers and retailers agree: Gen Z and Millennials are distinctive generations heavily influenced by their relationship with technology, their values, and their social media engagement. They require a unique approach. eCommerce retailers selling to these generations need to understand how to curate their sales approach, marketing, and brand values to meet these economically powerful audiences.
Who are these shoppers? Millennials were born between 1981 and 1996 (they are anywhere from 28-43 years old in 2024), and Gen Z were born between 1997 and 2012 (they’re 12-27 years old now). Millennials are in a more mature life stage with established careers, getting married, buying homes, having children, etc. Gen Z are still in adolescence, college, and early careers.
Both generations were raised with the Internet, smartphones, tablets, and broadband. It’s their relationship to the digital world that makes them unique (though one might now argue that Gen X and Baby Boomers pre-technology experience also makes them unique); but for the purposes of this article, we’re focusing on these two tech-native generations. Millennials may remember childhoods before technology, but they grew up gaming and were early adopters of cell phones. Gen Z, on the other hand, has never been without the internet or its definition of modern life.
Technology has shaped their way of relating to retail and eCommerce is as natural to them as breathing. Ironically, these generations are also showing increasing resistance to digital marketing tactics, making them harder and harder to convert to sales.
So what motivates these shoppers? How do they engage with eCommerce brands? What characterizes them? Here’s what eCommerce retailers need to keep in mind when interacting with these generations.
They ignore channels; they experience brands.
Retailers are still shifting from a multi-channel (disconnected channels) to an omnichannel (connected) experience, but these generations are farther ahead than many brands. They no longer see channels, but experience brands holistically. This phenomena has been coined “phygital” where shoppers no longer distinguish between physical and digital channels, and move seamlessly among all channels. For example, digital wallet payment options at self-service checkout kiosks, or when shoppers visit the brand’s eCommerce site on mobile while in store to research products or locate an item in the store.
For many retailers, phygital means they must keep a consistent brand experience across every channel, and create a truly integrated brand so that shoppers can move fluidly among physical and digital assets without disconnect. We’ve increasingly seen the order fulfillment process move into phygital territory as shoppers buy online and pickup in store or curbside, or buy online while in store and have it shipped to home. Having an order fulfillment partner like Radial that can manage multiple channel fulfillment options is an important step in meeting this customer expectation.
They buy what makes them happy.
Millennials and Gen Z are prone to buy on impulse, in fact, 74% and 63%, respectively, report that they do so regularly. Millennials buy on their phones and in-store in near equal amounts (48% vs 49%), but they almost never buy on their computers (3%). And, while Millennials buy what makes them happy in the moment, Gen Z shoppers are more cautious, with nearly half (47%) waiting a few days before they purchase. This might be because they are new to the workforce and do not have as much discretionary money. Gen Z typically needs more information to be confident in spending more than $50 online, or $100 in store.
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What categories are they splurging on?
Across the board, Electronics & Technology, Health & Wellness, Beauty & Personal Care, and Clothing & Fashion take the lead for 16-44 year olds.
Image Source: 5WPR, 2024 Consumer Culture Report
Retailers can work with a 3PL partner like Radial to optimize real-time inventory visibility and promote products that fall into these categories, within the parameters of these generations’ “splurge comfort zone”. As we’ve seen with the Stanley cup craze, making sure your 3PL can scale order fulfillment quickly is imperative.
They value sustainability and spend more for it.
Both generations prioritize sustainability. Two-thirds say they are likely to buy from brands committed to sustainability, and 69% believe brands need to be responsible for decreasing their carbon footprint. Further, they use their wallets to prove their values, as 54% of Gen Z and 50% of Millennials are willing to pay 10% more for eco-friendly products. Gen Z is particularly known for valuing sustainability, which means retailers can help reduce consumer “green fatigue” by communicating their commitment to the environment in ways that matter to this demographic.
They can also work with a 3PL partner, like Radial, to use sustainable packaging, reduce carbon emissions with ground transportation rather than air cargo, and drive efficiency with automation and robotics.
Nearly 75% of Gen Z follows influencers on social media and social media stars wield far more impact on Gen Z buying decisions than traditional influencers. This generation discovers new products through influencers and through content shared by peers. In 2023, one third (33%) of Gen Z shoppers bought a product from an influencer-founded brand and YouTube reported that in 2023, more than 25 billion views of unboxing videos. Social commerce is a natural place for Gen Z and Millennials to shop and share as they spend several hours every day engaging in social media platforms. Retailers should harness personalization and offer a curated unboxing experience that 3PLs like Radial can create to provide this generation with the joy of unboxing and easy-to-share social moments that these generations value.
Image Source: eMarketer
They’re susceptible to fraud.
Gen Z is more likely to fall victim to online scams and fraud, with 33% reporting having been a victim of fraud. This tendency may be because they have grown up online and tend to trust what’s on the internet. But as they become more fraud prevention savvy, they are becoming more security minded. Brands have the opportunity to build trust with this generation by educating them on security and fraud prevention, and by demonstrating how the brand keeps consumer data safe. Radial is one of the only 3PLs that offers a full eCommerce payment and fraud solution, with dedicated teams of experts focused on eCommerce transactions.
Understanding Gen Z and Millennials and working with your 3PL to implement measures that meet the expectations of these powerful buying groups will help eCommerce brands maximize revenue and curate customer experiences that generate loyalty.
Please note: Radial no longer offers a Customer Care solution as of September 15, 2024.
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