SAN FRANCISCO – Gen Z consumers are not turning out to be the online shoppers many thought they would be according to a new study from online marketplace Faire.
In a twist, the latest research shows that the world’s first digitally native generation has an increased preference in-store shopping. In a survey of 1,000 U.S. consumers ages 18-26 conducted by Wakefield Research on behalf of Faire, 61 percent of Gen Z adults reported they are more likely to shop in-person than online compared to a few years ago.
Financial incentives for in-store shopping
With $360 billion of disposable income that “will accelerate in the coming decade as the younger cohort reaches financial maturity,” per Faire, Gen Z consumers are becoming retail’s next big focus. But, entering the workforce amid the COVID-19 pandemic, mass layoffs, war and nationwide cost of living concerns, has impacted what and how they spend.
According to Faire’s survey, more than 90% of Gen Z reported the rising cost of living has impacted how they shop, 56% are seeking deals and discounts and checking the price of items more often than before, and nearly 50% are following a stricter budget.
The results also reveal why in-store shopping may be so appealing to the budget weary generation: It helps them be more discerning shoppers. According to Faire’s survey, half of Gen Z adults reported spending more wisely when shopping in-person, and 40% say they are more confident in purchases made in-store. Three in four responders also admitted to buying things online that they don’t need simply because it is easy to purchase, and one-third spend more money than they are comfortable with when shopping online.
“Gen Z shoppers have consistently led the charge against monolithic consumerism. They purchase based on their values and prioritize sustainability more than any other generation,” said Lauren Cooks Levitan, Faire’s chief financial officer. “Shopping in-store makes it easy for them to keep those same principles and be more fiscally responsible during this difficult economic period. This leads to an overall more meaningful shopping experience than they are able to find online.”
Hunger for brick-and-mortar experiences
In addition to its monetary effects, entering adulthood amid a crisis prompts emotional changes and shifts in shopping motivation. Research has shown that nostalgia is particularly potent during times of crisis, and for Gen Z, the so-called loneliest generation per Statista, offline experiences help them socialize and connect post-pandemic.
According to Faire’s survey, 34% of Gen Z make a full day of it when they shop in-person, and 32% prefer to shop in person because they would rather be with their friends and not shop alone.
“Younger generations have long gravitated to in-person shopping experiences for community, self-expression and the joys of real-life discovery,” explained Kirsten Green, founder and managing partner of venture capital firm Forerunner Ventures. “This was once centralized around malls, but now boutiques and independent retailers — from home accessory concept stores to third wave coffee shops — have become gathering hubs.
“Gen Z is, sadly, a generation that’s proving prone to loneliness and isolation, often driven by technology. But they are also highly individualistic. It makes perfect sense that they see brick-and-mortar boutiques and independent retail as modern outlets for connection and experimentation.”
E-commerce as the new showroom
While online continues to be a shopping destination for Gen Z, e-commerce plays a very specific role to the generation that dedicates itself to extensive “search and discovery” phases, per Faire.
Recent data from consumer investment firm Forerunner Ventures revealed that three quarters of Gen Z consumers reported spending between a few hours and a few days researching an item before buying. When shopping for enjoyment, 41% of Gen Z also say they gather inspiration by browsing online, despite mostly not executing or completing their purchase there.
This hesitancy to execute online is “seemingly at least partly due to the fact that online shopping doesn’t guarantee quality,” according to the Faire survey, which found that 43% of Gen Z have returned part of an online shopping order due to quality issues, and 52% tend to shop online from retailers they already know and trust.
What are Gen Z’s shopping plans this holiday season?
Overall, these distinct differences towards offline and online channels will affect how Gen Z shops this year and beyond. This year though, the Faire survey found that the majority of Gen Z adults plan to shop for gifts with a combination of online and brick-and-mortar retailers this holiday season.
Additionally, nearly one-fourth plan to shop mostly in-store, and 20% plan to find inspiration online and then purchase in-store.
Faire’s survey was conducted by Wakefield Research among 1,000 nationally representative U.S. adults ages 18-26 between Aug. 3-9 using an email invitation and an online survey. This survey was designed by Forerunner’s survey was conducted online June 29-30 among 524 adults ages 18-27 living in the U.S.