Feature
The Gist
- Social savvy. Engage Gen Z with short-form videos and integrate social selling.
- Influencer impact. Leverage influencers and user-generated content to build trust and drive purchasing decisions.
- Value-driven. Showcase brand values to resonate with Gen Z's desire for authenticity and purpose-driven brands.
The future of ecommerce looks bright.
Global ecommerce sales are set to jump by 10% in 2023, and a nearly a quarter of all retail purchases are expected to take place online by 2026, according to Insider Intelligence.
But encouraging forecasts aside, this is no time for retailers to rest on their laurels. Why? Generation Z is here.
That’s right, just as retailers listened to the demands of millennials and Generation X and built thriving ecommerce websites and mobile apps, a new wave of fickle, born-digital online shoppers came along to reshape the future of ecommerce.
Generation Z: Digital Natives With High Expectations
Gen Z, born between 1997 and 2012, is the first generation to be raised in an era where the internet and mobile devices were already prevalent.
As a result, Gen Z has higher expectations for retailers than other generations when it comes to customer experience, presence on social media and mobile, and company values.
“Gen Z has a very different path to purchase,” said Jason Goldberg, chief commerce strategy officer at Publicis. “They are far more likely than previous generations to use social platforms to discover new products. So merchandising often has to happen via influencers and social content.”
With their digital native perspective and spending power projected to be more than $33 trillion in income by 2030, Gen Zers pose new opportunities and challenges to retailers of all sizes.
With that in mind, let’s explore these challenges and how retailers can update ecommerce strategies to attract and retain Gen Zers.
Related Article: Do Your Brand's Values Align With Those of Gen Z?
Challenge 1: Gen Z Is Spread out on Social Media and Will Buy Directly
Not surprisingly, Gen Z spends more time online, eight hours plus daily according to some reports, than any other generation, with three hours per day being spent just on social media.
Gen Z has been most identified with TikTok, but Gen Z adults actually prefer YouTube (25.7%) over TikTok (25%) by a slight margin, according to data from Insider Intelligence. Instagram (20%) is a close third place, and it falls off from there.
The challenge then for ecommerce brands is to meet Gen Z where they live and engage them with the right types of content.
Given Gen Z’s short attention spans and preference for consuming content on their smartphones, short-form videos such as TikTok videos, Instagram Reels and Stories and YouTube Shorts resonate most with this generation. And you don’t have to look far to see major brands — such as Sephora, Home Depot and Levi’s — posting eye-catching, colorful short videos to connect with Gen Z.
Capturing Gen Z’s attention with social content is critical, but brands also need to pay attention to how that content can lead to sales. That’s because about half of US Gen Z social users make purchases directly on social media, compared to 38% overall, according to an Insider Intelligence survey. Social selling — via private links to checkout or using services like Instagram Shops or TikTok Shopping — has proven to be very effective with Gen Z.
“The Gen Z shopper doesn't want to leave their social media experience and the more you can tie sales into your channel experience, the more sales you will close,” said Derric Haynie, CEO and co-founder of Ecommerce Tech. “That doesn’t mean just sell sell sell from the channel with discounts and sales content. The content should keep that brand connection, but when the customer is ready, they can buy without leaving the social channel.”
Related Article: Deciding on the Best Social Media Platforms for Customer Connection
Challenge 2: Gen Z Prefers Recommendations From Influencers and Regular Users
Gen Zers are less likely to trust brands than millennials. Maybe it’s because Gen Zers were exposed to excessive online ads at an early age and have been programmed to be wary of them.
This could also explain why Gen Z depends on social media influencers and user-generated content (UGC) and shuns ads and celebrities.
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“Gen Z tends to be quite reliant on influencers,” said Kristin Smith, managing director and retail commerce lead at Deloitte Digital. “They don’t rely as heavily on traditional search and discovery tools like Google, but instead use YouTube, Instagram and TikTok for product inspiration as well as purchasing.”
As such, ecommerce brands should promote UGC — from unboxings to reviews — by running short video contests with rewards, as shoe brand DSW did with its #DSWCutLoose TikTok campaign.
But if a brand really wants to connect with Gen Z — from engagement to purchase — it should partner with influencers. A well-run influencer campaign will generate thousands of likes, comments and new followers, who will hopefully become Gen Z customers.
Here are two successful influencer campaigns worth emulating:
PlayStation partnered with five gaming influencers to promote its virtual reality headsets on Instagram and YouTube.
Athletic apparel brand Gymshark partnered with six sports influencers to promote a 66-day fitness challenge on TikTok and Instagram.
Challenge 3: Gen Z Really Cares About Brand Values
Almost half of Gen Zers (45%) say they’re motivated to engage with a brand if it “appears trustworthy and transparent.”
Why is Gen Z so passionate about brand values? It may be a reaction to the turbulent decades of their youth (2000s and 2010s), an era marked by economic recessions, terrorism and mass shootings. Gen Z learned early that life is fragile and the truth matters.
“Gen Z grew up in a world with significant social, economic and political turmoil, and these influences show up in their shopping behavior,” said Smith.
The lesson for ecommerce brands is that your relationship with Gen Zers must be more than transactional. If your marketing content smells of a sales pitch, Gen Z will walk away. So create content that puts your brand values front and center.
The ultimate example of brand values on display comes from Patagonia, which regularly weaves info about environmental issues and activism into marketing content. Taking things further, Patagonia’s 83-year-old founder recently transferred ownership to a nonprofit organization to ensure Patagonia’s profits are used to combat climate change. A bold move that surely earned Patagonia new Gen Z fans (or “stans” to use Gen Z lingo).
“Ecommerce brands can win versus Amazon and other generic brands by authentically showing Gen Z that they care and they’re doing more than selling a product,” said Haynie.
Winning Over the Consumers of the Future, Now
As the only group to be “born digital,” Gen Z brings a unique point of view that ecommerce brands must adapt to in order to remain competitive.
By targeting Gen Zers with quick, visual social media content, partnering with popular influencers and being honest about brand values, ecommerce brands can win the hearts and busy minds of Gen Z just as their purchasing power is peaking.
