Generation Z: How do they differ from other consumers?
They're the new kids in town and the first digital generation. Although their definition varies, they are typically under 23 years old and over 5. With their affinity for tech, and rumours by Forbes that they are on track to become the largest generation of consumers by 2020, this “next consumer powerhouse” is leaving millennials in the shade. But, how do they differ from previous generations, and how are they influencing technology?
We caught up with Naji El-Arifi, Head of Innovation at Salmon, a Wunderman Commerce Company, to get his thoughts on how this next generation will shape future innovations.
How does Generation Z interact with technology, and how does it differ from previous generations?
“Fundamentally, Generation Z live in a world surrounded by technology and are therefore more reliant on it than previous generations. They are the social media demographic that oversaw the rise of eCommerce and drove retailers’ operations online. There is no hiding the fact that leading brands such as Google and Amazon have thrived by meeting Gen Z’s continuing need for an immediate, relevant and efficient retail experience. Technology is, of course, a factor in enabling all of this.”
How are brands responding to Gen Z’s desire to get close to a product, knowing how it will look and perform, without physically experiencing it?
“There are multiple technologies that brands can use to allow users to experience a product without buying it. Fashion is currently a leading market for this, with more and more shoppers looking to buy their products online, but also needing to trust that they are getting the right product. Multiple make-up brands are trialling augmented reality (AR), for example, to show users what they will look like wearing a certain lipstick or eyeshadow.
“Brands like Warby Parker are using AR to show consumers what they will look like wearing a pair of their glasses . It makes it easier for consumers to make an informed decision before ordering the product online.
“Car manufacturers are also trying to give younger users the ability to experience their products through virtual reality (VR). This is another technology that will become more widespread as Google pushes its Daydream headsets, and as Oculus enters the mobile VR headset space with its Oculus Go headset.”
What impact will Gen Z continue to have on future tech developments over the next five to ten years?
“Let’s first look at examples where the use of AI is improving customer experience for instance through chatbots, ‘conversational commerce’, and visual search...”
- Monzo uses a chat interface to communicate with its customers, and while this is not a chatbot, it shows how younger generations don’t want to waste time on the phone to a bank.
- Levi’s has a chatbot on their site that helps you choose the right cut of jeans, creating a more conversational style of exploration; mirroring an in-store experience - online.
- Start-ups are testing advanced levels of visual search, so that metadata can be added to images automatically. This would allow brands to add information easily to old products or to a vast collection of items in a catalogue.
- North Face created a guided selling experience, in partnership with IBM, where they asked questions on where the customer would most likely wear their jacket. They would then use that data to suggest tailored products based on the consumer’s particular needs.
- DFS use AI to create more accurate delivery times for users.
- Google uses AI in most of its products: Google Photos, Gmail and the Google Assistant. For example, in Google Photos, it allows users to search for ‘cats’ and then all pictures of cats are shown. Google is investing in its Assistant to style-match products through Google Lens. Users will be able to find and shop for items via a phone camera.
- Amazon uses AI for many of its services, as well as including recommendations for users .
- Starbucks has an assistant that allows users to make orders via voice and chat.
“Let’s now look at examples influenced by Gen Z around contextual shopping, for instance tech that helps show what a product will look like in real life…”
- Furniture companies are jumping on this with Ikea’s Place app, Wayfair and Houzz, all of which use AR to place products in the real world. ‘Point and place’ is being used in the Curry’s app, so shoppers can see what a product will look like in the home.
- Facebook has also just started testing AR within their ads. Meanwhile, users can already share posts with 3D objects.
- Nike has also used it to display what a pair of shoes will look like when worn.
- Recently, DFS, with the support of Salmon, became the first UK furniture retailer to launch a new AR functionality on its website. It allows iPhone and iPad users* to place a piece of furniture in their home and visualise how it looks and fits. Users can point the device at any space in the lounge using the camera function, where the piece can be moved around the room in real-time and to scale.
To find out more about the impact of Gen Z, in particular, the technology they use and influence, and how in turn, this tech can help future-ready your organisation, get in touch with our Head of Innovation, Naji El-Arifi.
Whilst Gen Z are beginning to make their mark in eCommerce, brands and retailers should be exploiting the millennial demographic, a group worth up to an estimated $24 trillion by 2020. Using data from "The Future Shopper " report, we investigated what turns millennials on and off when shopping online, their spending habits, and how and where they are likely to shop in future - download it below .