Understanding Gen Z Buying Habits:
Why Generation Z is a Powerful Market Segment to Tap Into

As the newest generation of consumers entering the market, it is imperative for businesses to understand the shopping behaviors and preferences of Generation Z. This demographic, born between 1997 and 2010, represents a significant market opportunity with a yearly sales value of $150 billion and accounting for nearly 20% of the U.S. population.

Given these trends, businesses must assess how to optimize their e-commerce strategies to effectively reach and engage this valuable market segment. Failing to do so could result in missed opportunities and potential market share losses.

What’s Generation Z Like?

The purchasing habits of Generation Z, a “digital native” group of 72 million individuals with $360 billion in disposable income, differ significantly from previous generations. Understanding Gen Z buying habits is essential for businesses looking to engage this valuable section of the market.

High Social Influence & Reliance on Peer Recommendations

Gen Z values social influence and is heavily influenced by peer recommendations and social media when making purchasing decisions. Over 76% of Gen Z teens follow a creator on social media, and they are more likely to trust content from friends and family over traditional advertising.

Prioritization of Authenticity & Transparency

Gen Z values authenticity and transparency in brands. They prefer to purchase from companies that are transparent about their products and practices, and whose values align with their own. Brands that are open and honest about their business practices are more likely to earn Gen Z consumers’ trust and business.

Mobile-First Mindset

Gen Z is comfortable with technology and has a mobile-first mindset, with a preference for researching products online and making purchases on their smartphones. Businesses must therefore have a strong online presence, including a user-friendly website and engaging social media accounts, to effectively reach this demographic.

Price Sensitivity with a Focus on Quality

Gen Z is price-sensitive, but they also value quality. For over 60% of Gen Z shoppers, the quality of products is the most critical factor in making a purchase. They are likely to compare prices and search for deals, but they are willing to pay more for high-quality products.

Environmentally Conscious

Gen Z is environmentally conscious and deeply values sustainable practices. They prefer to purchase from brands that incorporate environmentally-friendly products and sustainable business practices. They also tend to be mindful of the environmental impact of their purchases, such as packaging and shipping.

Businesses must understand Generation Z shopping habits to effectively engage with this valuable market segment and maximize opportunities for growth.

What Puts Generation Z Off?

To effectively engage with Gen Z consumers, it is important to understand not just what they are drawn to but also what puts them off.

Insincere or Inauthentic Brands

Gen Z consumers are highly attuned to insincerity and lack of authenticity, and are quick to detect false or misleading claims. Brands that are not transparent about their products and practices or that engage in disingenuous advertising are likely to face resistance from Gen Z shoppers.

Lack of Ethical or Socially Conscious Practices

Another factor that may prevent Gen Z consumers from engaging with a brand is a lack of ethical or socially conscious practices. Gen Z is highly attuned to environmental and social issues and Gen Z buying habits play into this—they prefer to support brands that share their values. Brands that fail to prioritize sustainable or responsible practices are unlikely to appeal to Gen Z consumers.

Manipulative Marketing Tactics

Brands that employ manipulative tactics such as clickbait or that prioritize profit over customer satisfaction are also at risk of alienating Gen Z consumers. This generation values honesty, transparency, and trust, and is more likely to support brands that prioritize the customer experience and align with their values.

How To Attract Gen Z Shoppers

As the largest and most ethically diverse generation in American history, Gen Z represents a massive market opportunity for e-commerce businesses. To effectively engage with this group of consumers, retailers and brands should prioritize authenticity, transparency, and alignment with their values and social consciousness. 

Focus on Experience

Gen Z values experiences over ownership, with 60% of this demographic finding digital presentations more important than in-person presentations. To appeal to Gen Z, businesses must focus on creating unique and memorable online experiences. Utilizing live commerce technologies can enhance the eye-catching nature of your business for Gen Z shoppers.

Prioritize Authenticity

As stated, Gen Z values authenticity and transparency, and is more likely to trust and purchase from brands that align with their values and have a straightforward approach to products and practices. Ensure that your business practices are transparent and clearly communicate your values to appeal to Gen Z consumers.

Ensure Mobile Readiness

Being a digital-native generation, Gen Z is comfortable with technology and is more likely to make purchases on their smartphones. Businesses must have a mobile-ready website and app and effectively utilize them to reach this demographic.

Emphasize Social Selling

Gen Z is highly social and influenced by their peers, with 80% having made a purchase based on a product seen on social media. With live commerce outpacing traditional e-commerce sales, to reach this demographic, businesses must have a strong selling presence on social media and implement influencer marketing strategies. Shoppable videos can be an effective way to build your social presence and sell to the new-age buyer.

Address Price Sensitivity

Gen Z is known to be more price-sensitive than previous generations, seeking the best deals. Offering competitive prices and exclusive discounts through your branded mobile or web store can drive Gen Z shoppers to your owned channels.

Emphasize Sustainability

Gen Z is environmentally conscious and drawn to companies with sustainable practices. Focus on implementing sustainable practices and use livestreaming to provide social proof to your Gen Z viewers.

Provide Both Online and In-store Options

While being digital natives, Gen Z still enjoys in-store shopping and the ability to see, touch, and try products before purchasing. Businesses can focus on creating engaging in-store-like experiences through multichannel live commerce technologies to attract Gen Z consumers.

Entice An Entire Generation

To stay relevant and attract Gen Z shoppers, it is imperative for businesses to understand Gen Z buying habits. E-commerce businesses can appeal to this demographic by implementing the solutions listed in this article.

Combining physical and digital experiences through phygital solutions can help e-commerce businesses appeal to the multichannel shopping preferences of Gen Z. By utilizing technology such as augmented reality and live commerce, retailers can provide unique, interactive, and authentic shopping experiences to enhance brand loyalty and customer retention.

Businesses should strive to provide personalized and unique experiences to Gen Z shoppers. By offering a tailored shopping journey that increases brand loyalty and customer retention, brands can fulfill their new-age shoppers’ needs. By leveraging technology and providing an integrated shopping experience, retailers can better connect with Gen Z and drive sales.

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