NORTHBROOK, Ill.--(BUSINESS WIRE)--The retail industry is experiencing a generational shift in consumers, and these new younger shoppers have vastly different expectations of how they want to interact with retailers, according to a survey conducted by HRC Retail Advisory, a leading strategic retail advisory firm. The survey finds that Generation Z has become an increasingly important influencer of consumer spending with new shopping behaviors that focus on both malls and online shopping, and are heavily influenced by friends, bloggers and social media.
"Generation Z has significant influence over household purchases," said Farla Efros, President of HRC Retail Advisory. "Retailers must appreciate the different expectations and habits of this group, as well as of Millennial parents with kids, and develop and execute strategies that address their needs in order to stay competitive with this increasingly important consumer segment."
To better understand the Millennial and Generation Z consumers and the implications for retailers, HRC surveyed 3,100 participants in the U.S. and Canada on their shopping habits, attitudes and influences driving their purchasing decisions.
Significant findings of the survey include:
Malls Are Not Dead, But Are Being Shopped Differently
Malls are still very popular, especially with Generation Z shoppers. While more than 60% of all survey respondents said they visit a mall or shopping center at least once a month, 72% of Generation Z respondents (kids 10-17) and Millennial parents with kids say they do so. These shoppers go to the mall with a specific mission and in search of specific items. Generation Z shoppers also spend more time at the mall and they visit more stores. 22% of frequent Gen Z visitors say their typical trip to a mall is more than 90 minutes and they visit, on average, four to five stores.
Gift Cards are at the Top of Everyone's Wish List
Among all study respondents with a preference, 62% would rather receive a gift card than an actual gift. Among Gen Z children, this number climbs to 69%, further proving their desire to make their own purchase decisions. The majority of respondents, particularly parents, plan to include gift cards among their holiday purchases. Among Millennials that have children and earn more than $150k per year, 96% plan to include gift cards in their holiday shopping.
Social Influences on Shopping Behaviors are Changing
Buying habits of all respondents, and particularly those of young shoppers are significantly influenced by others. Interestingly, Gen Z shoppers tend not to be strongly influenced by celebrity endorsements from athletes, actors and singers. However, over 61% of their purchase decisions are most strongly influenced by friends, with 13% being influenced by bloggers.
Social Media Plays a Big Role in Purchasing Decisions
The influence of and engagement with social media as it relates to purchasing decisions cannot be overstated. Approximately 50% of Millennial and Generation Z shoppers surveyed use social media while they shop. Of their social media time, most is on Facebook (61%), followed by YouTube (38%) and Instagram (24%).
Amazon.com Leads The Way in Online Shopping
66% of Millennials say they place an online order at least once a month. 79% of all respondents making purchases in the last year shopped on Amazon.com. Other popular sites include ebay.com, Groupon.com and Apple.com, respectively.
"The HRC survey sheds light on the changing demographics and influences of existing, emerging and future shoppers,” continued Ms. Efros. “As Generation Z begins to gain a foothold in the consumer spending environment, and Millennials mature, their expectations are transforming the retail landscape. In order for retailers to remain competitive, they must begin to develop a balanced approach to serving Baby Boomers and Generation X - who still have the great majority of the spending budget - while positioning themselves to best serve the emerging and future consumer segments for longer term success.”
Notes on Survey Methodology and Analysis
HRC Retail Advisory’s survey findings are based on a targeted sample of four distinct demographics: Millennials with no children, Millennial parents of children under 18, Gen X and Baby Boomer parents of children under 18, and children ages 10-17. The sample size was 675 per group in the United States, and 100 per group in Canada. The survey was fielded in October 2016 and was completed through proprietary sample sources amongst panelists who participate in online surveys. The total sample size was 3,100 completes.
About HRC Retail Advisory
HRC Retail Advisory is a leading strategic retail advisory firm based in Northbrook, IL that helps retailers unlock value across key operating functions: including helping retailers to develop cost-effective cost infrastructures to transform their businesses in this new economy, enhance merchandise strategy, margin and inventory optimization, merchandise planning and allocation, store operations including more effective labor management and more cost-efficient supply chains. For more information, visit www.HRCadvisory.com.
