E-commerce

The reasons why merchants should prioritize the Gen Z buying experience

55% of Gen Z customers are interested in an AI assistant that would streamline product discovery and anticipate their wants and preferences, and a staggering 88% of them think AI can enhance the online shopping experience. Additionally, 51% of respondents express interest in AR and VR retail experiences.

Retailers investing in AI, AR, and VR will find this welcome news, and all businesses developing AI, AR, and VR tools and technologies will find it reassuring.

The data comes from a poll that was done by Rokt and Harris Poll with the goal of figuring out how today’s customers’ expectations are evolving. 6,023 consumers between the ages of 18 and 78 from the United States, the United Kingdom, France, Germany, Australia, and Japan participated in the May survey.

Stephen Rivera, senior director of customer success at Rokt, is not particularly surprised by the results.

“Gen Z is a digitally native generation that has lived their whole lives with high expectations about technology and how it can make life easier and more efficient, so it was surprising to see that they were the demographic with the highest belief that AI could improve the online shopping experience,” Rivera said in a telephone interview. “AI is the next big opportunity in technology, and it makes sense that Gen Z would see applications for this in their shopping experiences as much as in other parts of their lives.”

According to the Rokt survey, e-commerce customers’ top objectives are cheap pricing, relevant promotions, and a customized shopping experience, especially at the checkout.

Who is Gen Z?
It’s critical to comprehend the consumer segment’s position within the global and American population in order to comprehend the possible influence that the Gen Z customer base will have on the adoption of AI and the adoption of AR and VR.

As of January 2023, the estimated population of the United States was 334,233,854. According to the United Nations, there were 8 billion people on the planet as of November 2022. According to the Annie E. Casey Foundation, there were around 70 million Gen Z customers in the United States as of 2022. Gen Z consumers were defined as individuals who were born between 1997 and 2012. The group is slightly smaller than the 72 million American millennial consumers.

According to Statista, which characterizes the Gen Z consumer segment as the “most racially and ethnically diverse” of all the generation groups, “many group members will not be able to remember a time before smartphones and social media,” and represented 20.66% of the U.S. population as of this summer.

What Generation Z anticipates from AI
Gen Z consumers listed the top five ways AI will enhance purchasing in the Rokt/Harris survey:

Examine costs (47%).
Look for discounts (45%).
Get product recommendations and offers that are pertinent to you (41%).
Get individualized support (37%).
Look for reviews (28%).
Additionally, the survey found that 20% to 29% of customers will abandon their cart, the brand, or the experience if their shopping experiences don’t feel individualized.

When it comes to Gen Z, the checkout procedure is particularly important because 73% of Americans say they have experienced some kind of annoyance or obstacle there and dislike advertisements and suggestions for unrelated products.

Customers may take action as a result of this frustration. 40% of American customers have changed their minds about a purchase or taken things out of their cart, 37% have abandoned their cart, and 22% stated that the unpleasant experience damaged their opinion of the company.

For retailers, none of it is good news. Particularly when there are other Gen Z consumer data points involved.

One significant factor is that, according to Business Insider, Gen Zers are predicted to make up 40% of customers in the United States. The study also stated that market research indicates that Gen Zers presently have $143 billion in purchasing power.

What Gen Z consumers desire
Given that Gen Z consumers have a substantial purchasing power of $143 billion, it is imperative for the retail sector to comprehend and meet their needs.

According to an Insider Intelligence analysis, Gen Z will soon surpass all previous generations of customers as the “largest cohort of consumers,” and companies hoping to capitalize on this market must “understand their tendencies and digital expectations.”

According to a McKinsey analysis, these expectations include spending on easy online transactions, mobile pay, app-based services, and experiences that enhance daily life. Although Gen Z consumers prefer physical stores over millennials, they still demand an excellent online buying experience.

“By 2026, many members of Generation Z will have enormous purchasing power, making them the most important generation for the future of retail. Retailers and brands must begin building relationships with Gen Zers immediately in order to gain a share of this expanding group, according to the Insider Intelligence research.

The bottom line
“There is a clear message for retailers and brands given all the consumer statistics regarding the Gen Z shopper,” said Rivera of Rokt.

“Retailers should look to make incremental improvements to the shopping experience by leveraging AI,” he stated.”Some key components for retailers to consider are how they can make the online shopping experience more personalized and relevant and which businesses they can partner with to help drive efficiencies.”