E-commerce
Why retailers need to focus on the Gen Z shopping experience
Eighty-eight percent of Gen Zers globally think AI can improve online shopping. The shopping demographic holds $143 billion in purchase power so delivering what the Gen Z shopper wants is critical for retailers.
October 31, 2023 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com
A whopping 88% of Gen Z consumers believe AI can improve the online shopping experience and 55% are interested in an AI assistant that would simplify product discovery and anticipate their needs and desires. Also, more than half, 51%, are interested in AR and VR shopping experiences.
That's encouraging news to retailers investing in AI as well as AR and VR, and pretty assuring to all the companies creating and crafting AI, AR and VR tools and technologies.
The statistics are from a survey conducted by Rokt and Harris Poll and focused on understanding the changing expectations of today's consumers. The survey was conducted in May and polled 6,023 consumers ages 18-78 across the U.S., the U.K., France, Germany, Australia and Japan.
The findings aren't a big surprise to Stephen Rivera, senior director of customer success at Rokt.
"Gen Z is a digitally native generation that has lived their whole lives with high expectations about technology and how it can make life easier and more efficient, so it was unsurprising to see that they were the demographic with the highest belief that AI could improve the online shopping experience," Rivera said in an email interview. "AI is the next big opportunity in technology, and it makes sense that Gen Z would see applications for this in their shopping experiences as much as in other parts of their lives."
The Rokt study revealed the top priorities for e-commerce shoppers: relevant deals, low prices and a personalized shopping experience — particularly at checkout.
Who is Gen Z
To understand the potential impact the Gen Z consumer base will have when it comes to AI adoption and embracing AR and VR, it's important to understand where the consumer segment sits within the global and U.S. population.
The U.S. population, as of January 2023, was estimated at 334,233,854. The world population was 8 billion as of November 2022, according to the United Nations. Gen Z consumers are those born between 1997 and 2012 and numbered nearly 70 million as of 2022 in the U.S., according to the Annie E. Casey Foundation. The demographic is just below the millennial consumer population of 72 million in the U.S.
As of this summer the Gen Z consumer was 20.66% of the U.S. population, according to Statista, which describes the segment as one in which "many group members will not be able to remember a time before smartphones and social media," and the "most racially and ethnically diverse" of all the generation groups.
What Gen Z expects from AI
In the Rokt/Harris survey Gen Z consumers identified the top five ways AI will improve shopping:
- Compare prices (47%).
- Find deals (45%).
- Receive relevant offers and product suggestions (41%).
- Receive personalized assistance (37%).
- Find reviews (28%).
The study also revealed that when shopping experiences don't feel personalized, 20% to 29% of consumers will walk away from their cart, the brand or the experience.
The checkout experience is especially relevant when it comes to Gen Z as 73%, in the U.S., report some form of frustration or barrier at checkout and aren't keen about ads during the checkout process and irrelevant product recommendations.
This frustration can lead to consumer action — 40% of U.S. consumers have reconsidered the purchase or removed items from a cart, 37% have abandoned the cart and 22% said the frustrating experience lowered their perception of the brand.
None of that is good news for retailers obviously. Especially when additional Gen Z consumer data points are in play.
A big one is that, in the U.S., Gen Zers are expected to account for 40% of consumers, according to Business Insider, which also reported market surveys revealed Gen Z currently command $143 billion in purchase power.
What Gen Z shoppers want
That $143 billion in purchase power is no small figure so understanding, and delivering, what the Gen Z shopper wants is critical for the retail industry.
In fact, a report from Insider Intelligence, states Gen Z will soon become the "largest cohort of consumers," and retailers and brands wanting a piece of the economic opportunity need to "understand their tendencies and digital expectations."
Those expectations, according to a McKinsey report, include spending on experiences that enrich day to day lives, mobile pay, app-based services and simple online transactions. While they tend to like brick and mortar stores more than millennials, the Gen Z shopper wants a great online shopping experience.
"Generation Z will soon become the most pivotal generation to the future of retail, and many will have huge spending power by 2026. To capture a piece of this growing cohort, retailers and brands need to start establishing relationships with Gen Zers now," states the Insider Intelligence report.
The bottom line
Given all the consumer statistics regarding the Gen Z shopper there's a clear message for retailers and brands, according to Rokt's Rivera.
"Retailers should look to make incremental improvements to the shopping experience by leveraging AI," he said." Some key components for retailers to consider are how they can make the online shopping experience more personalized and relevant and which businesses they can partner with to help drive efficiencies."
For deeper insight check out this apc report: "On the record with Gen-Z: A report on key loyalty drivers and buying preferences"
About Judy Mottl
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