Whether it is in the pre-Covid-19 or Covid-19 era, Gen Z demonstrated perseverance and continued interest in fashion and retail – even when they have nowhere to go. At the same time, as the pandemic continues to constrain our everyday lives, Millennials have expressed the desire to spend less on fashion.
Kibo recently collaborated with Drapers to conduct a poll of over 2,000 participants, split between Gen Z (aged 18-25) and Millennials (aged 26-40), to get insights into what retailers need to do to flourish in 2021 and beyond among these two age demographics. Some of the points from the survey are summarised below:
1. Digital is Leading, But Brick-and-Mortar Will Still Get Attention
Since the beginning of the pandemic, Gen Z and Millennials have shown a propensity to purchase both in-store and online, choosing each channel for its own set of advantages.
Just over a quarter of participants in both groups expect to favour shopping online more after the pandemic has passed, while 42% expect to return to their pre-COVID habits — a mix of digital and in-store purchasing.
Both Gen Z and Millennials mentioned convenience, security and the simplicity of price comparisons as their primary motivations for shopping online, but they also listed the drawbacks of long delivery periods, the unpredictability of fit, and delivery and return costs.
2. Younger Shoppers Make Purchases Based on Their Beliefs
It’s no secret that younger shoppers buy based on their social values. However, as we emerge from a turbulent year, the value of sustainability and inclusive social perspectives has only risen.
According to the poll, 82% of Gen Z and 76% percent of Millennials support environmental sustainability, and 78% of both groups feel companies should promote diversity. Taking it a step further, 70% of young shoppers would pay extra for clothes from sustainable or socially aware companies, and members of both age groups reported abandoning a purchase because the brand didn’t match their values.
With the rise of new sustainable brands and socially conscious businesses, all retailers should rethink about openly connecting their business operations with social problems that matter to their customers.
These activities can range from supporting underrepresented perspectives on social media to publicly updating the corporate policy on employment and inclusion, as well as enhancing product source transparency and providing more sustainable delivery alternatives.
3. Buy Now Pay Later (BNPL) is Fast Becoming a Preferred Financing Option
54% of the Millennials and 50% of Generation Z, are the most likely to use buy now pay later payment option when making purchases.
Of course, the tendency might be linked to the digital nativity of these generations.
Worldpay’s Global Payments Report 2020 indicates that BNPL services are fast becoming one of the most used services for online payment methods and will account for over 24% of international e-commerce transactions for physical goods by value by 2026.
In fact, the BNPL market is expected to grow at a CAGR of 21.2%, with the APAC region leading the growth.
Customers seeking to spread out the expenses of items without being subjected to exorbitant interest rates and payment conditions have increased as a result of the pandemic.
Young people have recognised the advantages of flexible, inexpensive, predictable and convenient payments, so it’s no surprise that they are driving the payments revolution and becoming more smart spenders as a result.
4. For Retailers, New Habits and Priorities Lead to New Strategies
As the purchasing power of Gen Z and Millennials grows in the next years, it will become increasingly vital to reach out to them.
These digitally savvy generations are eager to accept new purchase alternatives like shop now pay later, even though they still recognise the importance of their pre-COVID shopping habits and yearn for them.
Both Gen Z and Millennials prioritise online and in-person social interactions, pricing and delivery convenience, and societal good on a range of issues.
Retailers who apply what they’ve learned over the last year to create the greatest overall experiences for these omnichannel customers will win now and in the future.
Increase Gen Z and Millennial Brand Loyalty
Younger consumers with less money in the bank and in no possession of credit cards are apt to have a greater need for solutions that can assist them in buying large-ticket items that they cannot easily purchase in one go.
Retail brands that want to increase engagement with the Gen Z and Millennial customers must have robust social good and flexible payment solutions. BNPL offerings are thus positioned particularly well to suit Gen Z and Millennial shoppers’ current needs.
BNPL gives consumers the option to stretch their Ringgit and get more out of their budget by providing flexible payment option in a form of two, three or six affordable monthly repayments, in the case for myIOU, at zero interest.