New Generation of Consumer Experience
Four Consumer Behaviors Changing Due to Generation Z
Generation Z, born from the late 1990s to the 2000s, is poised to significantly reshape our shopping experiences. Comprising over 30% of the global population, they are estimated to have an annual purchasing power of approximately $143 billion. Newsweek’s article presents four perspectives on the changes in consumer behavior brought about by Generation Z.
- Redefining Value Shopping
- Purchasing through Social Media and Influencers
- Blending Digital and In-Store Experiences
- Embracing New Payment Methods
Value shopping used to revolve around factors like price and quality, but Generation Z now considers not only tangible products but also the brand’s mission and purpose, and the societal impact they create.
Moreover, about 40% of Generation Z’s purchase decisions are influenced by social media, according to McKinsey. They tend to seek opinions from individuals who seem more knowledgeable rather than following mass opinions.
While online influence is significant, 47% of Generation Z still prefer shopping in physical stores over online, according to a study. This calls for “phygital” experiences that seamlessly merge both online and offline shopping.
Payment methods are also evolving, with “Buy Now, Pay Later” becoming highly popular among the younger generation. It is predicted that approximately 44% of them will use this service within the past year by the end of 2022.
Adapting to these shifts in consumer behavior is becoming increasingly critical for businesses.
Challenging Taboos with Femtech
Around one in four women worldwide give up sports during puberty or adolescence. As gender equality gains attention, “femtech,” technology that addresses women’s unique challenges, has been gaining prominence. In sports, women often face challenges related to menstruation, making it a prominent issue to address.
Adidas has developed “TechFit Period Proof Tights,” designed to prevent menstrual products from shifting during training, allowing female athletes to move with confidence. Furthermore, Adidas announced a substantial investment in product innovation focused on women in sports in 2022.
Many unique issues faced by women are often not widely discussed in Japan, leading to limited understanding among the general public. Therefore, developing products that embrace gender diversity, led by influential brands, can serve as an encouraging message to many athletes who might otherwise give up their dreams.
This trend is also evident in Generation Z’s purchasing behavior. In Europe and the US, 87% of Generation Z strongly believes that fashion should improve gender equality and inclusivity, with nearly half of students (49%) desiring to purchase from brands with better gender representation and inclusivity in marketing.
Efforts by sports brands to make sports accessible to all can lead not only to business growth but also to the creation of a more inclusive society. As we promote gender equality, we hope that topics that are currently taboo will gradually become more open to discussion.
The Budding Resale Market
Research reveals that approximately 52.7% of people in Japan check prices on resale apps before making new purchases, and 46.9% of them look for resale options before buying clothes. The concept of resale is becoming more prevalent in our lives.
The resale market is growing rapidly worldwide, with ThredUP, a leading online consignment store, projecting that the apparel resale market will expand to approximately $47 billion by 2025, tripling its size since 2021. Several retailers, including Patagonia, Arc’teryx, Levi’s, Madewell, and lululemon, have joined the resale market in the past two years.
From a brand perspective, resale has become a profitable venture amid demands for sustainability. While addressing environmental concerns, businesses also seek ways to generate profits without investing in new resources, making resale a lucrative program.
For consumers, resale offers a chance to obtain coveted brand items at more affordable prices. Additionally, the rise of the resale market may lead consumers to exclude options of purchasing short-lived new products.
However, it is not necessarily an absolute choice between buying only new or used items. The book “Another Design: The Work of Kenmei Nagaoka” offers a perspective: “We are gaining two joys—one from purchasing new products and the other from enjoying the aging process of used products. I believe this represents a balanced form of happiness.”
Whether new or used, there is beauty in the “budding of new value” that arises after continued use. Such a rich sensibility can drive changes in markets and consumer behavior.
Convenience Store Revolution
In Sweden, a cashless society, only one or two people typically stand in line at a supermarket checkout, with most customers using self-checkout. The benefits of self-checkout include cost savings on labor and avoiding discrepancies caused by cash transactions. However, self-checkout also comes with challenges, such as issues with electronic scales causing malfunctions, leading to frustration for customers.
To address these challenges, Amazon Go, the pioneer of “just walk out” technology, has been expanding its presence in the US with convenience-style Amazon Go and grocery-focused Amazon Go Grocery stores. Furthermore, Amazon Fresh, operated by Amazon, has been established in London. Additionally, Tesco, a British supermarket chain, has opened checkout-free stores in central London.
The idea of eliminating traditional checkout is revolutionary and may encounter resistance initially. However, it offers significant benefits such as improved turnover rates, reduced paper receipts, and ease of promoting reusable bags. Japan is also witnessing the opening of Amazon Go-style stores in Tokyo.
As the culture of checkout-free shopping becomes widespread, the time spent waiting in line at convenience stores for a light meal or coffee might soon become a thing of the past. The day when Japan’s convenience store culture receives an update might not be too far away.
Expanding Shopping Experiences
I have a personal (and likely social) expectation that shopping should follow my rule of “only touching things I can clearly envision using.” I have learned from numerous mistakes (like buying a dragon keychain during a school trip) and have become less likely to make extravagant shopping blunders. However, there are still instances where the image I had in mind before purchasing does not align with the reality.
This is why I have great expectations for AR (Augmented Reality) shopping, which allows trying on various products, from clothing to furniture, in the real world. Ying Zhu from UBC points out that the key to widespread adoption lies in the seamless integration of AR experiences with the purchasing process.
Indeed, it can be bothersome when AR apps keep directing users to separate purchase pages. Therefore, incorporating AR shopping features into social media platforms has attracted attention.
Snapchat, for instance, is heavily invested in enhancing AR shopping experiences (and its analysis) through filter functions. Similarly, Facebook has partnered with L’Oréal (and its subsidiary ModiFace) to introduce AR makeup features on Instagram.
Meanwhile, Accenture predicts that the world market for “Social Commerce,” where consumers can discover and complete purchases within social media, will more than double to $1.2 trillion between 2021 and 2025.
AR shopping and social commerce are still developing fields, but the integration of both could potentially lead to a satisfying shopping experience without regrets.