What do Gen Z customers want from eCommerce?

Expert Interview Series #1 with Jinah Oh, August 2020

 

Tell us a little bit about you, perhaps related to fashion and beauty?

 

I've been in the fashion industry for over 20 years mostly working with global luxury brands such as Cartier and Escada, and fashion education. I was a director for SCAD and I am now working as a director of fashion merchandising at the Academy of Art University, managing multiple fashion business programs.

For this topic of Generation Z, I'm in a unique position because people usually get to know this new generation when they become adult customers, but I actually deal with them before they become adults and become a member of a workforce.

 

How do Gen Z shop differently than millennials?

 

It is not completely set but typically it is considered that Gen Z was born from after 1996 to approximately 2008 and grew up in economic turmoil. Naturally, they're frugal and very sensitive about price. Also, they are digital natives, born with a digital device in their hands, and they are very resourceful and informed. For example, they know where to find deals and promotions such as coupons. They know where to find a product at the lowest price. My students who are Gen Z always find the best deals using digital resources.

Even though they are very price-sensitive, at the same time they trust and are willing to pay more for the brands they believe in and for the brands that are doing something for a good cause. They support and trust those brands. Because they're frugal but it doesn't mean they're not willing to spend. If they believe in something, they support it.

Generation Z shows the higher interest in in-store shopping experiences among others. They do a lot of research online, but they like actually going to the store. Seventy to 85% of Gen Z says (depending on research) they enjoy shopping in-store, but they don't like just typical stores. They want something that they can actually engage and integrate with their social life in the physical space. That's why the technology is a really big part of this in-store experience.

 

 

What is the secret sauce for success with Gen Z? Who are the best fashion e-commerce players targeting Gen Z today? And why?

 

Brands such as Nike, Adidas, Puma, and Vans are doing really well with Generation Z. These types of sportswear brands are very connected with culture and sport. I believe that’s why whenever there's a generation change, they're always able to adapt quickly and know how to talk to this new group of consumers. They’ve remained on top as favorite and trusted brands.

From mass retailers, often Target and Walmart are the places Gen Zers like to shop. There are many reasons but for example, Walmart is a popular destination among Generation Z because of the price point and product variety. They are more popular than Amazon for Generation Z.

Target collaborates with many fashion designer labels and brands, which put them in the fashion customers radar. They also have been adding new product categories like athletic wear, and lifestyle products like home decor and home bedding, which are affordable. Also, these incudes various licensing and private label brands that match Gen Z’s aesthetics and flavor. The combination of convenience, price point and product variety are all at Target.

ASOS is another great example for younger generations. ASOS is very successful in attracting both millennials and Gen Zers because it sells the brands they like, and the price point is in the low to mid-high range. ASOS is very convenient and speaks millennials' and Generation Z’s language. ASOS also addresses to the diverse group of consumers. since long time ago, they’ve been adding and expanding plus and petite sizes, maternity, and early adopter for new technology. ASOS was one of the major fashion ecommerce retailer who integrated a video on their website before others did. It's important, especially in fashion, to look like them, do things like them, and speak Gen Z’s language if you want to be a Gen Z brand. they will know right away if you just ‘pretend’.

 

What strategies should e-commerce retailers use when targeting Gen Z?

 

Technically everyone knows it’s important to use uses social media today. Stores who use social media well – meaning the way they like to consume contents and information, and sharing the topics they are interested, are definitely attracting Gen Z. Video is their favorite medium and they use Tiktok and Snapchat more than any other generations because it's part of a Gen Zer’s life. This generation spends more of their time on mobile apps and social media than other generations. like you and I send emails to each other to communicate, they use social media to communicate.

TikTok is really popular right now because Gen Zers love video and short-form interactivity. They like to be in control so that they can do a lot of things on their own. They don't like advertisements (traditional sense), because they don't like to be forced. They want to make their own decisions. And you have to make them feel like they are included. This kind of messages cannot be delivered in an obvious advertising campaign.

Another characteristics brands and retailer must consider is that Generation Z loves authentic brands. They don't like to be cheated or lied to. Many of them haven’t developed loyalty towards certain brands yet. Even though they're still not very loyal customers and less loyal in general than their elders, but once they love and trust, they will be engaged, and they will advocate for a brand.

As they are digital native, they have no patience, so you have to make your web/site or your shopping experience really efficient and effective. Gen Z has a short attention span and tends to make decisions really quickly and moves on.

 

What do you think are the major shifts in fashion eCommerce in the next 5 years that Gen Z will bring or impact?

 

That’s really difficult question. Fashion industry has been changing significantly over the years. But because of COVID 19, and many other recent issues, fashion has been seeing the need for systemic and fundamental changes.

For fashion e-commerce, we’re seeing a huge increase in online e-commerce expansion and growth. In addition to the direct-to-consumer ecommerce businesses, retailers and fashion brands like Macy's, Nike, H&M, and Zara, have been closing brick and mortar stores while they're pushing all their efforts toward e-commerce because that's how they are sustaining their businesses during this time and anticipating this will continue. Not only that, retailers are adapting and figuring out how better to integrate in store experience with online/digital as we see the changes of the consumer shopping behaviors not just what they buy. And this applies to the B2B relations as well.

For example, recently Lululemon purchased a startup company, Mirror, an interactive fitness device. And both brick and mortar based fashion businesses and direct to consumer e-commerce, are using various technologies such as artificial intelligence and virtual reality, and 3D tools etc. to create engaging experience in e-commerce, similar to going to the store versus going to a list of pictures. There is a huge integration of technology that is creating the sort of experience people usually have in-store or vise versa.

Technology has evolved so much in the last three to five years. Technology even has enabled to present a 3D visualization of products. There is a lot of integration of virtual space, mobile, and e-commerce with the actual space. Even there are some companies developing sensory technology enabling the shopper can actually smell cosmetics or perfume while shopping online. There is definitely a convergence of real experience and virtual experience.

 

For those who are running eCommerce or about to start it, what would be your last word for targeting Gen Z? 

 

I think Generation Z is not any different from any other generation in its emergence. However, each generation showed unique characteristics of their own. To win over this generation, you have to be authentic and be able to communicate directly to the Gen Z audience. Understanding ever-changing customers and embracing the changes are challenging for most organizations but that’s the only way to survive in this competitive space.

 

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Retail tech should make the shopping experience easy, not complicated. Interested in learning more about how AI/ML can apply to your eCommerce website? Request a free demo or 30 min consultation. hello@yesplz.ai

by Jinah Oh Jinah Oh
Director of fashion merchandising at the Academy of Art University

I've been in the fashion industry for over 20 years specifically working with global luxury brands. I was a director for SCAD and I am now working as a director of fashion merchandising at the Academy of Art University, managing fashion business programs.

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