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Study: Gen Z digital natives still greatly prefer in-store experiences

Generation Z has taken a position as the up-and-coming spending powerhouse for marketers. Though while they are the first true generation of digital natives, according to a report from A.S. Watson Group, Generation Z shoppers may still prefer the physical effort of shopping at brick-and-mortar stores

Demographers and researchers typically use the mid-1990s to early-2000s as the starting birthdate range for Generation Z. In 2019, Generation Z became the largest consumer segment, now accounting for 32% of the world’s population of 7.7 billion.

But raised with all the convenience of online buying why would Generation Z have any major interest in traditional shopping?  The hook seems to be that they love the experiential aspects of browsing and shopping at physical stores with friends, with a staggering 99% of Generation Z still choosing to regularly shop in meatspace.

But just because it’s happening in the real world doesn’t mean that brands and marketers haven’t got options to leverage technology to engage customers. Introducing AR and AI across stores and bridging the gap between offline and online experiences through apps and social media are some of the solutions offered by A.S. Watson Group.

A.S. Watson Group has seen a significant increase in Generation Z’s spending power. Based on data, the spending power of this group has increased by 23% year-over-year in 2019. The winning category appears to be beauty, with an average of 86% of Generation Z considered as beauty shoppers, and over 70% of Generation Z spending being put into beauty – ranking highest among all the generations.

“Generation Z is shaping up to have great spending power while they are the future of modern retail. It’s important to stay relevant to them, not only focusing on the products they want but also the stories and experiences that go with them,” said Malina Ngai, group chief operating officer of A.S. Watson Group.

As for attracting Generation Z, a fun yet engaging shopping experience is the key to success. A.S. Watson Group has featured a pop makeup fashion show installation at a shopping centre in Taipei, which asked customers to share photos of them with coral lipstick on social media in exchange for free lipstick and coupon.

Other than shopping experiences, sustainability concerns are a big factor for Generation Z customers. Since 2014, A.S. Watson Group banned the use of micro-plastic in its rinse-off own brand cosmetics or personal care scrub products. By the end of 2019, this ban will extend to all brands as well.

“Generation Z is a very different customer to the Millennials that came before them. They are reinvigorating the retail industry with their desire for experience and activities, while at the same time helping shape a more sustainable future with their emphasis on the environment and doing good,” said Ngai.

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