Generation Z to make big retail impact
Jul 7, 2015 | Market Research | Comments Off on Generation Z to make big retail impact
New challenges lie ahead for retailers in Asia as Generation Zers embrace technology and earn more.
In its newly released report How We Like to Shop Online, CBRE says Generation Z is expected to have significant influence over the retail market in the coming years as their income levels are set to increase rapidly upon joining the job market.
Generation Z refers to people born after the Millennial Generation, loosely defined as from around 2000.
“Having spent most of their lives using the internet and other related technology, Generation Z’s demographic of consumers has distinct shopping behaviors in comparison to other demographic segments,” says Jonathan Hsu, head of occupier markets research, CBRE Asia Pacific.
“Key aspects of their online shopping habits include stronger trust in online information; more activity on social media; and needing a sense of differentiation. These factors demonstrate the increasingly important role of technology in shaping the decision-making process of consumers,” said Hsu.
In order to remain competitive in the digital age, retailers and landlords need to be proactive in reaching out and engaging with their consumers. Mobile shopping is most prevalent in emerging markets, and in many places, smartphones are the first – and sometimes only – point of internet access for many consumers, therefore, are playing a key role in driving the growth of online retail.
Smartphone apps and social media can provide valuable information and insights into consumer behavior, for example, push notifications for smartphone apps or social media platforms based on consumers’ shopping history, location and preferences can help personalise their shopping experience.
“Landlords and retailers need to be more digital-savvy, keeping pace with the latest trends in smartphone applications and social media so they can build a stronger relationship with consumers especially those from Generation Z,” said Joel Stephen, senior director, head of retailer representation, CBRE Asia.
“These digital platforms are two essential mediums of online retailing, which should be integrated into retailers’ omni-channel strategies in order to capture Online-to-Offline (O2O) business opportunities.”
With around 70 per cent of consumers in Asia Pacific collecting their online orders in-store – and 90 per cent of them purchasing additional items when picking up their online order – click-and- collect services are also an effective way to drive in-store sales, creating a synergy between both online and offline platforms.
CBRE says landlords should thus collaborate with tenants to help merge their online and offline offering by providing the necessary facilities and regular renovations.
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