Generation Z shoppers are a highly sought-after demographic by retail businesses, and supermarkets are no exception. Attracting these young consumers now can help build loyalty as their purchasing power continues to grow.
In 2021, Bloomberg cited data from Gen Z Planet estimating that this group had a purchasing power of $360 billion, a figure that has undoubtedly increased as more members of this generation join the workforce. Businesses must understand what sets Generation Z apart from its predecessors if they want to maximize its buying potential.
One of the main drivers of Generation Z’s shopping habits is, of course, the economy: only 7% are unsure or say they don’t pay attention to economic issues, according to The Rise of the Gen Z Consumer report by the International Council of Shopping Centers (ICSC). This generation has lived through two periods of economic uncertainty, so it’s not surprising that 48% choose low-price retailers as one of the types of stores they frequent.
Economic Concerns
“Generation Z was largely shaped by events like the Great Recession, seeing family members face the challenges of that period and, of course, experiencing the economic impact of the COVID-19 pandemic themselves,” said Stephanie Cegielski, vice president of research at ICSC.
Shopping at discount stores and bargain-priced retailers allows this young generation to remain price-conscious in their purchases, which in turn helps them feel more comfortable as they plan for the future. However, price is not the only key factor. According to Cegielski, nearly all (97%) Generation Z shoppers still shop in-store and look for interactive experiences. This can range from tech experiences to seeing, touching, and trying out products before buying them, something particularly important for supermarkets specializing in fresh foods and specialty items.
Fast and easy checkouts are also important, with 46% of respondents citing this as the most important factor in their in-store experience.
The Influence of Social Media on Generation Z
This digital generation is heavily invested in social media, so retailers can’t afford to ignore this channel. Social content is a common source of inspiration for users, making these platforms the perfect place for recipes and educational content related to cooking.
“Generation Z is a demographic highly influenced by social media, especially when it comes to purchasing decisions,” said Cegielski. “Brands that can successfully leverage social channels by sharing products, product reviews, and in-app purchases will be better positioned to reach this group.”
Cegielski also noted that social media influencers impact the spending of about a third of Generation Z, though this effect isn’t as strong as the influence of friends and family or online reviews, which ranked among the top three decisive factors in making a purchase decision.
Attracting Generation Z shoppers largely depends on a retailer’s ability to offer a 360-degree experience that encapsulates both online shopping and the speed and convenience of in-person shopping. Simplifying payment options, emphasizing value shopping, and demonstrating a commitment to supporting social causes (such as mental health, sustainability, and ethical sourcing) can also help retailers win over Generation Z shoppers.