Global Study: Shopping with Generation Y and Z

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confidential © 2016Conﬁdential © 2016
June 2016

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SHOPPING WITH GENS Y & Z:
HOW TO BUILD BRANDS WITH RETAIL INFLUENCE

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1980-1995

1995-2010

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More than half the global population were
born post-1980.

By 2020, Gen Z alone will account for
40% of all consumers.

Gen Z in the US alone have $44bn of
annual disposable income and inﬂuence
$600bn of family purchases.

They are the mouthpiece for the
internet and increasingly have the
power to make or break your brand.
IGNORE THEM AT
YOUR PERIL

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A HOTBED OF DEBATE IN THE MEDIA

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SPECIFICALLY, WE SOUGHT TO
UNDERSTAND HOW THEY SHOP

What are the key differences and similarities
between the two cohorts?

What are their desires, needs and shopping habits?

What are the best channels to reach them to
inﬂuence their purchases?

And how should brands engage them throughout
the shopping process?

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METHODOLOGY
Online Quant:
Measuring purchase
behaviour trends
(900 respondents)
Qualitative self-
ethnography and in-
the-purchase-
moment diary over 6
weeks
(45 respondents)
Social Intelligence
listening across
social media
(1.1m social
interactions)
Research conducted amongst Gen Y (28-30) and Gen Z (17-19)
4 categories: tech, fashion, food and lifestyle

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PEOPLE LIKE THESE
Bruno, Brazil, Gen Z
Rafaela, Brazil, Gen Y
Gautam, US, Gen Y
Brittney, US, Gen Z
Sian, UK, Gen Y
Daniel, UK, Gen Z

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EXECUTIVE SUMMARY
EXECUTIVE SUMMARY

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SHOPPING FOR
GENERATIONS Y & Z
IS WHERE CULTURE
MEETS COMMERCE

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‘BRANDS WITH
RETAIL INFLUENCE’
BRAND
SHOPPERS
INFLUENCEINFLUENCE

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‘BRANDS WITH
RETAIL INFLUENCE’
BRAND
SHOPPERS
PEER GROUP
INFLUENCE
INFLUENCE
INFLUENCE

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FROM LINEAR ‘PATH
TO PURCHASE’
TO A FLUID, SOCIAL
CYCLE OF
INFLUENCE AND
INFLUENCING
BRAND
PEER GROUP
SHOPPERS
ACTIVE
OWNERSHIP
COMPLETE
PURCHASE
PURCHASE
CHANNEL
INSPIRATION
VALIDATION

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BRAND
PEER GROUP
ACTIVE
OWNERSHIP
COMPLETE
PURCHASE
PURCHASE
CHANNEL
INSPIRATION
VALIDATION
THE ‘INFLUENCE
EXCHANGE’ FUELS
EVERY STAGE OF
THE CYCLE
Influenced by their personal
relationships, trusted sources and
influential brands and retailers.
They seek opinions and share
discoveries, gaining status
through what they know and
their potential choice.
The big moments for brands to
authenticate themselves, provide
reassurance and reinforce the decision.
On-going need for approval of their
choice via feedback from peers.
They look to exert influence by
showing off ownership.
Assessment of the brand is still
influenced by what others think.
The act of transaction itself must
deliver a positive experience and
encapsulate the brand’s behaviour.

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THE SHOPPING BEHAVIOURS OF GENS Y & Z:
UP CLOSE AND PERSONAL

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BRAND
PEER GROUP
ACTIVE
OWNERSHIP
COMPLETE
PURCHASE
PURCHASE
CHANNEL
INSPIRATION
VALIDATION
On-going need for approval of their
THE ‘INFLUENCE
EXCHANGE’ FUELS
EVERY STAGE OF
THE CYCLE

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They are more inclined to herd behaviour
than independent behaviour

TRUTH OR MYTH?

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They are more inclined to herd behaviour
than independent behaviour

TRUTH OR MYTH?
TRUTH:They invite and embrace inﬂuence
from trusted and collective sources

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GEN Y TEND TO INVESTIGATE ON THEIR OWN,THEN CONSULT OTHERS
GEN Z ARE GUIDED BY SOCIAL INFLUENCES FROM THE OUTSET

Inspiration
Most likely to discover new
brands by browsing IN STORE
(32%) and ONLINE (30%)
Most likely to discover new brands
and products via PEOPLE THEY
KNOW, FRIENDS AND FAMILY (36%)
“I’ve been looking for a stylish pair of boots
for a while now after seeing someone
wearing something similar, I’ve found these
and looked at them in the store and
constantly look at them online and have
shown them to friends on WhatsApp“
Giovanna, Brazil, Gen Z
Q5 All Markets, Base: 161
“I’ve been looking for new trainers
for a while now and have seen a lot
of people wearing these and they
appear on Instagram too. I like the
classic style so want to get them”
Ollie, UK, Gen Z
“A lot of the time I may browse online and look for
items that I may buy, when I actually buy them I go in-
store and in between this I’ll often speak to friends.“
Louisa, UK, Gen Y
“When I want to buy something,
the ﬁrst website I use to search is
Google Shopping and the second
is ‘Buscape’, a website that gives
you an overview of prices for the
item and where to buy”
Rafaela, Brazil, Gen Y

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BOTH GENS Y & Z HAVE TRUSTED SOURCES AND ‘GO TO’ BRANDS

Inspiration
“I first discovered Etsy through my Pinterest app. I found
it a very unique source to find nice gifts, clothes and
decoration objects. I have suggested it to friends when
looking for something cool to give someone a gift or
when you want to get ideas.“
Katrin, UK, Gen Y
“I have certain brands that I will go to first for
inspiration and see what they have. I like to get ideas
from them and look further to see what else is out
there. Makeup Addiction is one of those ”
Emmy, UK, Gen Z

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BRAND
PEER GROUP
ACTIVE
OWNERSHIP
COMPLETE
PURCHASE
PURCHASE
CHANNEL
INSPIRATION
VALIDATION
Ongoing need for approval of their
THE ‘INFLUENCE
EXCHANGE’ FUELS
EVERY STAGE OF
THE CYCLE

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They are ﬁckle and impulsive: the ‘swipe-
right’ generations

TRUTH OR MYTH?

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They are ﬁckle and impulsive: the ‘swipe-
right’ generations

TRUTH OR MYTH?
MYTH. They hardly ever make impulsive
purchases: they ALWAYS seek to purchase
something they have had the chance to
screen and vet

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GEN Y INVARIABLY VET ONLINE AND THEN ASK FOR ADVICE
GEN Z ACTIVELY INVOLVE THEIR PEERS FOR IMMEDIATE APPROVAL

Validation
“I think that one of the most
important things is seeing
what people like me think
about it, that they like the
brand too. In the end I want to
get a product that other
people will admire.“
Lorenzo, Brazil, Gen Z
“There are times when
I’ve seen something I
liked on Instagram and
I’ve tagged people in
the comments just to
ﬁnd out what they
think.”
Brittney, US, Gen Z
Brazil favour more direct routes via WhatsApp and email
In the UK this is done via snapchat or Instagram
The US favour Facebook, Instagram and Pinterest.
0%
of the Gen Zs we spoke to said
they make impulse purchases
“If I see something I
like I will spend a good
amount of time ﬁnding
out more about it and
then, when I feel that I
have a good
understanding of it, I’ll
speak to friends who
might already own it
or know about it and
see what they think.”
Beth, UK, Gen Y
Q11, Base: BR 84 , US 83, UK 66

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BRAND
PEER GROUP
ACTIVE
OWNERSHIP
COMPLETE
PURCHASE
PURCHASE
CHANNEL
INSPIRATION
VALIDATION
THE ‘INFLUENCE
EXCHANGE’ FUELS
EVERY STAGE OF
THE CYCLE

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They care less about physical retail
experiences and prefer to execute their
shopping online

TRUTH OR MYTH?

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They care less about physical retail
experiences and prefer to execute their
shopping online

TRUTH OR MYTH?
MYTH. They are still heavily invested in the
physical retail experience: it’s where
expectation needs to meet reality

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BOTH GENS Y & Z WANT TO EXPERIENCE HOW THE BRAND BEHAVES,
BUT IN-STORE OFTEN UNDERWHELMS

Purchase
Channel
“I’d like to think that in-store is going to be a lot more
interesting, maybe more learning about the product or
the history than you can do now…to give you
something to tell others.“
Fabio, BR, Gen Y
“I like it when stores have brands
separated out and merchandised
well because it helps you get a
vibe for what each brand is
about, like if it is young, trendy,
ﬂashy or retro”
Daniel, Gen Z, UK
In-store experience is the
most important factor for
inﬂuencing their purchase:

•  34% of UK Gen Z
•  29% of US Gen Z
•  22% of BR Gen Z
Q17, Base: BR 68, US 80, UK 66
“When I bought my Samsung VR, I
couldn’t try it in the store and no-one
seemed to know that much about it,
but online you could get more
information about the product and
sort of see it working so you could
make a better decision.”
Taylor, US, Gen Z
48% of Gen Y made their purchase in-store
46% of Gen Y made their purchase online
Q9 All Markets, Base:223, 215
53% of Gen Z made their purchase in-store
46% of Gen Z made their purchase online
Q9 All Markets, Base:233, 201

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BRAND
PEER GROUP
ACTIVE
OWNERSHIP
COMPLETE
PURCHASE
PURCHASE
CHANNEL
INSPIRATION
VALIDATION
THE ‘INFLUENCE
EXCHANGE’ FUELS
EVERY STAGE OF
THE CYCLE

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They just want the moment of purchase to
be as easy as possible

TRUTH OR MYTH?

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They just want the moment of purchase to
be as easy as possible
True for Gen Y, but Gen Z want a reward
from the outset…

TRUTH OR MYTH?

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GEN Y PRIORITISE A FUNCTIONAL, FRICTIONLESS TRANSACTION
GEN Z WANT TO CELEBRATE THE PURCHASE

Purchase
Complete
“Once I decide I am ready to buy, the money will burn a
hole in my pocket until I make the purchase.“
Gavin, US, Gen Y
“If I see that other people want it or like it then that
reassures me I’ve made the right choice and in some
cases I’ve been lucky to get it.”
Lowri, UK, Gen Z
Adidas Ultra Boost – Share how you wear it

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BRAND
PEER GROUP
ACTIVE
OWNERSHIP
COMPLETE
PURCHASE
PURCHASE
CHANNEL
INSPIRATION
VALIDATION
THE ‘INFLUENCE
EXCHANGE’ FUELS
EVERY STAGE OF
THE CYCLE

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Post-purchase, they proudly display their
spoils via social media

TRUTH OR MYTH?

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Post-purchase, they proudly display their
spoils via social media
They warily share purchases as the need
for validation reaches its peak

TRUTH OR MYTH?

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GEN Y REVEAL & RECOMMEND TO RECEIVE INDIRECT APPROVAL
GEN Z TENTATIVELY SEEK OUT DIRECT FEEDBACK

Peer-to-Peer
Feedback
“A lot of people used to really show off what they
have gotten recently, like dresses, cameras and
phones but now I think everyone has got a bit tired
of that and it’s nice to get a more direct comment
from someone… I still post pictures but make sure
that the picture is of the product in context, like
wearing a new dress to an event.“
Allison, US, Gen Y
“This is my new camera. I
haven’t really shown it to
anyone yet as want to learn
how to use it and make sure
I’ve made the right decision.”
Vitoria, Brazil, Gen Z
“So, I got the trainers! I’m
really pleased with them and
quite a few of my friends
have made good comments
about them which is always
nice to hear.”
Ollie, UK, Gen Z

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PURCHASE JOURNEY SUMMARIES

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BRAND
PEER GROUP
ACTIVE
OWNERSHIP
COMPLETE
PURCHASE
PURCHASE
CHANNEL
INSPIRATION
VALIDATION
SUMMARY:
GEN Y
PURCHASE
JOURNEY
They investigate on their own
before consulting with others.They
have go-to sources for inspiration.
They invariably vet online before
going in-store.They will also directly
request guidance from the experts
in their social spheres.
They need to check the brand ﬁts with
them and get the story to tell about
their new product.
They reveal and recommend in
order to receive indirect approval.
They are conscious of oversharing
and diluting the impact of what
they post and talk about.
They want the product as
conveniently as possible,
without compromising on the
quality of the experience.

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BRAND
PEER GROUP
ACTIVE
OWNERSHIP
COMPLETE
PURCHASE
PURCHASE
CHANNEL
INSPIRATION
VALIDATION
SUMMARY:
GEN Z
PURCHASE
JOURNEY
They love to research, often because
they can’t afford to buy straight away.
They use their social group to discover
and share.Trusted brands often serve
as a starting point.
They actively involve their peers for
immediate approval.They indulge
in ‘virtual ownership’ and show off
their discoveries to determine if
their choice will be accepted.
They want to experience how the brand
behaves to ensure it ﬁts their lifestyle.
They will buy via the channel that best
meets their needs.The store experience
plays a big role in reassuring them but
also the one that feels the most ‘broken’.
They need reassurance that they
have made the right choice, but
won’t shout about it instantly.
If it doesn’t meet immediate
approval they will ‘bury it’ and may
even seek to save face by warning
others away from it.
They want to celebrate the purchase.
They like brands to re-validate their
choice, demonstrate the reasons
they bought it and help them turn
their purchase into social currency.

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THE 5 BIG IMPLICATIONS TO BECOME
‘A BRAND WITH RETAIL INFLUENCE’

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1. NURTURE COMMUNITES OF SHOPPERS BY
FUELLING INFLUENCE WITHIN THE PEER GROUP

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GLOBAL EXAMPLE?
2. BALANCE SHARED, COLLECTIVE EXPERIENCES WITH
PERSONALISED OWNERSHIP FOR THE INDIVIDUAL

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3. BALANCE PRODUCT PUSH WITH CULTURAL
PULL VIA INFLUENTIAL PARTNERSHIPS

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4. DELIVER FRICTIONLESS BUYING WHILE
REINFORCING ‘BRAND FOR ME’

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5. DELIVER THE GRATIFICATION OF OWNERSHIP:
BEFORE, DURING AND AFTER THE PURCHASE

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Global Study: Shopping with Generation Y and Z

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