How Gen Z spending habits shaping the future of shopping

At 2.56 billion strong, Gen Z is on all retailers' minds. The children of an environmentally and a socially conscious generation, the values-driven conversation has been part of the fabric of their daily lives since day one. Brands are clamouring for their attention with quirky aesthetics and sustainability-centred credos.

For stores looking to connect with Gen Zers - who have a spending power of $143 billion and will account for about 40 per cent of global consumers this year - it's clear that retailers and brands need to invest in researching how this new generation shops, even if it means disrupting traditional blueprints. One of the biggest issues for traditional retailers and brands to overcome will be the rise of more direct-to-consumer (DTC) and e-commerce brands, who are able to provide more of an intimate and personalized experience for shoppers.

Members of Gen Z - loosely, people born from 1995 to 2010 - are true digital natives: from earliest youth, they have been exposed to the internet, to social networks, and to mobile systems. That context has produced a hypercognitive generation very comfortable with collecting and cross-referencing many sources of information and with integrating virtual and offline experiences.

While Millennials came of age during an economic boom, Gen Z-ers were shaped by the economic pressures their families and communities faced, from the financial stress of the rental market to the added costs to kids and caregivers staying in touch with incarcerated parents. Thus, they value the stability that comes with conservative spending, stable jobs and smart investments.

Gen Z consumers are full of surprises. On the one hand, they want what their parents want - seamless delivery of retail essentials, such as value, choice, quality, convenience, and availability. On the other hand, as digital natives, they have their own expectations for how they want those essentials delivered. Technology is important to them, but only if it adds value and enhances their shopping experience.

Despite their youth, Gen Zers are an economic force to be reckoned with. They have grown up in a fluid digital world in which the boundaries between their physical and online lives have converged. Having 24/7 access to information and digital resources has made them more educated, knowledgeable, and self-reliant in deciding which products and services to choose or brands to support.

Gen Z consumers expect accurate inventory information, good value for their money, and a wide assortment of choices when shopping. They want technology that provides value and convenience. And appreciate innovation, but only if it can remove friction and empower them to engage with the brand on their terms. They seek individualized shopping experiences. They want direct value that is tailored to them individually and the ability to co-create an experience that is uniquely their own.

As with previous generations, Gen Zers place great importance on dependable and consistent delivery of retail essentials. Their considerations when choosing a shopping channel exemplify this prioritization: survey respondents identified product choice, availability, convenience and value as top priorities when deciding where to make purchases. And although they are digital natives, they most often choose to shop in the physical store: 98 percent of survey respondents globally said they typically make purchases in a store some or most of the time.

Mental health challenges are a sad characteristic of Generation Z, which has been referred to by some as the "loneliest generation," as their endless hours spent online can foster feelings of isolation and depression. More time spent on smartphones or watching Netflix means less time spent cultivating meaningful relationships. Additionally, many young people fall prey to the "compare and despair" trap that social media presents. Gen Z kids also find their mental health affected by the turbulent state of the world. As political activism among Gen Z has increased, many Gen Z-ers have internalized the unrest surrounding issues like gun control, police brutality and climate change - leading to increased levels of stress.

Most generations tend to be more left-leaning than the previous generation, and Gen Z is no exception. While Gen Z-ers look a lot like Millennials on many key issues, they are the most politically progressive generation yet.

Gen Z still has a lot of growing up to do. But as they continue to come of age, early signs indicate that they will grow into engaged, conscientious stewards of our world - by being socially-minded, independent thinkers, who recognize their responsibility in shaping a more equitable future for all.