Digital-Savvy Gen Z Consumers Cling To Physical Stores, Brand Experiences

The global study from IBM released Thursday found 67% of Generation Z shop in bricks-and-mortar stores most of the time, with another 31% shopping in-store sometimes, indicating 98% of Gen Z shop in store at some time or another.

Born in the digital era, these tech-savvy consumers, ages 13 to 21, are willing to pay more for value and a personalized experience. Location is important. Most have an entrepreneur spirit, so brands managing to connect well with this group tapped into creative ideas, said Jay Henderson, director of IBM Marketing Cloud, Watson Customer Engagement.

Gen Zers like to submit ideas for product design, participate in product reviews and online games as part of a brand experience. In addition to the 59% who receive an allowance, 22% said they also make money online and 16% work for themselves, yet most want to have that connection with a physical store.

"Price was not the most important factor when making decisions about what products to purchase," Henderson said.



That's good news for brands manufacturing products in the United States, even if they end up paying higher export or import taxes under revised guidelines from the incoming political administration.

The bad news--only 19% of retailers could provide a highly personalized shopping experience.

The "Uniquely Gen Z" study conducted by the IBM Institute for Business Value is based on findings from more than 15,000 consumers aged 13 to 21 from 16 countries.

Generation Z is the first group to grow up not knowing a world without cellular phones, smartphones and other digital devices. Today, they are between 2 billion and 2.5 billion strong, with $44 billion in buying power.

Three-quarters of Gen Zers spend more than half of their monthly income. Clothes, apps and entertainment top their shopping lists.

"This generation also has a lot of influence beyond their own wallets," he said. "They also have influence on family spending beyond their own wallets."

Only 22% of those surveyed said they are supervised online by an adult and only 19% said their parents have set security filters on their devices. Less than one-third said they are comfortable sharing personal details other than contact information and purchase history.

Some 62% are prepared to share purchase history details with brands, and 21% said they would share more sensitive personal data.

They are willing to share information with brands, but social-media friends influencing their purchases are restricted to a tight inner circle. Henderson said "they're really asking friends, and friends of friends for input."  

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