Retail reality check: capturing Gen Y & Gen Z shoppers online

Craig Smith
19 February, 24

Capturing the attention and loyalty of Gen Y and Gen Z shoppers is an ongoing challenge for ecommerce brands: both demographics are shrewd, hyper-aware of their value to advertisers and unwilling to passively absorb commercial messaging. And in the current economy, they don’t have huge amounts of disposable income at their fingertips to spend on non-essential items: over 50% of Gen Z report feeling insecure about their finances.

Amidst the challenging economic period, consumers are turning to ‘small treats’ to boost their mood, a phenomenon that Estée Lauder’s Leonard Lauder coined the ‘lipstick index’. So while shopping remains high on the agenda for both generations, brands and their CMOs need to be conscious of the context in which they shop, what they’re looking for from brands, and how to market themselves accordingly.

Advertising is out – influencing is in

Twenty years ago, brands were relying on television to build brand awareness and loyalty. Nowadays that means precisely targeted advertising via streaming services and smart TVs. However, owing to the endless distraction posed by smartphones and social media, younger generations rarely find themselves sitting through an ad break. Today, TV ads only generate a 25% increase in brand recognition, while social media was found to improve brand awareness by 35%, in no small part due to the power of influencers. Where TV targeted a mass market, influencers target people at an individual level.

The influencer market was estimated to be worth $21.1 billion in 2023. Influencers have shifted the way Gens Y & Z approach shopping so that it feels like they’re buying from a person, rather than a faceless corporation. This goes a long way to build trust and emotional connections between brands and shoppers. The sheer size of the market means that an influencer can be selected to align perfectly with your brand values and provide organic entry to your demographic’s social feeds in a way that’s more targeted than ever. This first requires getting to know your customer demographic at a granular level (for which there are countless tools to assist).

Influencer channels of all shapes and sizes can benefit your brand – and the larger followings don’t necessarily reap the largest results. ‘Micro’ influencers – those with a follower count of 10,000-100,000 – have been found to provide the highest engagement rates. The important thing is to understand exactly what you wish to enhance about your brand before building your database of influencers and opinion leaders in order to secure the right people for the job.

The power of personalised experiences

As digital natives, Gens Y and Z are routine ‘channel hoppers’, shopping on desktop, mobile and social media interchangeably. Even though 53% of Gen Z still chose physical storefronts as their preferred shopping channel in 2023, only 35% looked to brick-and-mortar stores first when making a purchase, and 92% of both Gen Z and millennials report shopping via mobile apps in tandem. With no strong affiliation to one channel over another, it makes it harder for brands to know where to focus their efforts, underlining the importance of an omnichannel approach, whereby each platform is optimised for a personalised user experience.

To maximise conversion rates, every touch-point should be personalised to meet each customer’s individual preferences. Websites should be primed for product discovery, meaning that the moment shoppers visit the home page, they are seeing tailored products based on their online shopping and browser history. Checkout processes can also be optimised for individual user experiences with convenient features such as cross-device basket synchronisation, which allows your customers to begin their online shopping stroll on one device and complete it on another. Checkouts can be streamlined further by offering pre-configured payment methods that are tailored to local preferences and user-specific needs, removing any roadblocks that could get in the way of that crucial final leg of the journey.

Future proofing your tech stack for smooth operations

Ecommerce brands are only as successful as the infrastructure their platforms operate on – this means there’s a need to continuously evolve their tech stacks as today’s new technology will rapidly become tomorrow’s standards.

To stay competitive, brands need to establish a tech stack that is flexible, customisable, scalable and primed for all manner of integrations. Headless architecture – which separates the front and back-end of the platform – has paved the way for this approach and been widely adopted by the most successful brands.

The separation is especially valuable when designing user experiences for different channels because it means one back-end system connects to multiple front-end user interfaces (in the form of websites, mobile apps and any other points-of-sale) simultaneously, and these can be modified freely without impacting the behind-the-scenes operations (things like order fulfilment, inventory and pricing).

Gens Y and Z will always favour ecommerce players that best speak their language on their preferred channels and, upon arriving at the platform, provide a seamless shopping experience. As outlined above, brands looking to capture this audience should put their efforts towards an influencer marketing program, a bulletproof UX across all channels and adopting and maintaining the right tech stack to make sure everything runs smoothly in the background.

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