ARMONK, N.Y. and WASHINGTON, Jan. 12,
2017 /PRNewswire/ -- Despite expectations that the
first "digitally native" generation would want to shop online, a
new study released today by IBM (NYSE: IBM) and the National Retail
Federation found that almost all members of Generation Z prefer to
shop in bricks-and-mortar stores. With the global Gen Z population
set to reach 2.6 billion by 2020, retailers need to create more
interactive engagement around their brands to serve the "always
on," mobile-focused, high-spending demographic, according to the
study.
"Generation Z expects technology to be intuitive, relevant and
engaging — their last great experience is their new expectation,"
IBM General Manager of Global Consumer Industries Steve Laughlin
said. "This presents a significant challenge for retailers and
brands to create a personalized, interactive experience with the
latest digital advances or risk falling behind. This kind of
innovation is not linear or a one-time project — it is a new way of
thinking, operating and behaving."
"Just as Millennials overtook Gen X, there's another big buying
group retailers need to plan for, and it's even larger: Generation
Z," NRF President and CEO Matthew
Shay said. "They appreciate the hands-on experience of
shopping in a store. With technology constantly evolving but some
shopping habits remaining the same, retailers need to be agile
enough to serve both needs. Retailers are constantly focused on
experimenting with new innovations both online and in-store to
remain relevant to evolving consumer demand."
Released just ahead of NRF's 106th annual Retail's
BIG Show next week in New York,
the "Uniquely Gen Z" study conducted by the IBM Institute for
Business Value is based on findings from more than 15,000 consumers
aged 13-21 from 16 countries.
Born after the mid-1990's till early 2000s, Generation Z is the
first "digitally native" group to grow up not knowing a world
before cellular phones, smartphones and other digital devices. But
the study found that 67 percent of Generation Z shop in a
bricks-and-mortar store most of the time, with another 31 percent
shopping in-store sometimes, indicating 98 percent of Gen Z shop in
store.
The new generation is important to retailers because it has
access to $44 billion in buying power, with 75 percent saying they
spend more than half of the money that is available to them each
month, according to the study. And the generation is demanding: the
study found 52 percent of Gen Z consumers will transfer loyalty
from one brand to another if the brand's quality is not up to par.
They care the most about retailers getting the basics right, with
66 percent saying product quality and availability are the most
important factors when choosing one brand over another; 65 percent
focus on value.
The study found 74 percent of respondents spend their free time
online, with 25 percent online five hours or more each day. The
degree to which in-store sales are influenced by digital is
inevitable in today's shopping journey — and continues to grow. The
study discovered a number of insights into Gen Z's digital habits
and preferences brands can leverage to reach them:
- 73 percent of Gen Z use their phones primarily to text and chat
socially with family and friends, but members are willing to extend
their conversations to brand relationships.
- 36 percent would create digital content for a brand, 42
percent would participate in an online game for a campaign and 43
percent would participate in a product review.
- They have no patience for hard-to-use technology and demand a
seamless mobile/digital experience.
- 62 percent will not use apps or websites that are difficult
to navigate and 60 percent will not use apps or websites that are
slow to load.
- Gen Z knows personal information is valuable to retailers, so
members want to know how brands are using it and how the
information will be protected.
- Less than 30 percent are willing to share health and
wellness, location, personal life or payment information; 61
percent would feel better sharing personal information if they knew
it would be securely stored and protected.
The study found that Generation Z consumers like to engage with
brands online, especially with those that create an interactive
environment where customers can shape their own experience. As
retailers develop and engage in such practices, they will be able
to capture Gen Z ideas for new products, services, engagement and
shopping experiences, the study said. The generation is known to be
brand champions both online and offline, especially when brands
acknowledge and value their opinions.
IBM IBV Lead Researcher Jane Cheung and STORES Magazine Editor
Susan Reda, along with two
Generation Z students from the Fashion
Institute of Technology's Fashion Business Management (FBM)
program, will participate in a live online discussion of the
study's findings at 11 a.m. Eastern time on
Friday. Reporters can watch the discussion at
https://zoom.us/j/719741456.
About IBM Institute for Business Value
For more information, http://www.ibm.com/iibv
Download the IBM IBV app from iTunes and Android Market
About IBM Retail
For more information about IBM Retail:
https://www-935.ibm.com/industries/retail/
For more information about IBM Consumer Products:
https://www-935.ibm.com/industries/consumerproducts/
About NRF
NRF is the world's largest retail trade association, representing
discount and department stores, home goods and specialty stores,
Main Street merchants, grocers, wholesalers, chain restaurants and
Internet retailers from the United
States and more than 45 countries. Retail is the nation's
largest private sector employer, supporting one in four U.S. jobs —
42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily
barometer for the nation's economy. nrf.com
About the Fashion Institute of
Technology (FIT)
The Fashion
Institute of Technology, a part of the State University of New York, has been a leader in
career education in art, design, business, and technology for more
than 70 years. With a curriculum that provides a singular blend of
hands-on, practical experience, classroom study, and a firm
grounding in the liberal arts, FIT offers a wide range of
outstanding programs that are affordable and relevant to today's
rapidly changing industries. Internationally renowned, FIT draws on
its New York City location to
provide a vibrant, creative community in which to learn. The
college offers more than 50 majors and grants AAS, BFA, BS, MA,
MFA, and MPS degrees, preparing students for professional success
and leadership in the global marketplace. Among notable alumni in
fashion are Calvin Klein, Michael
Kors, Amsale Aberra, Reem Acra,
Brian Atwood, Dennis Basso, Francisco
Costa, Norma Kamali,
Nanette Lepore, Bibhu Mohapatra, Ralph
Rucci, John Bartlett, and
Michelle Smith. Other prominent
graduates include Leslie Blodgett,
creator of bareMinerals; international restaurant designer
Tony Chi; Nina Garcia, creative
director, Marie Claire;
and Joe Zee, executive creative
officer, Yahoo Style. Embodying the mantra "where fashion
meets business," the Fashion Business Management (FBM) program at
FIT is the largest and oldest degree program of its kind in the
country. Blending a curriculum of design knowledge and
business practices, students study fashion marketing, product
development, planning, and fashion management, and can earn a one-
or two-year AAS degree, and a two-year BFA
degree. Visit fitnyc.edu.
NRF: Ana Serafin Smith
(855) NRF-PRESS, press@nrf.com
IBM: Katie Leasor, (212)
671-9356, kleasor@us.ibm.com
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SOURCE IBM