The new retail:Generation Z sets thepace

02/01/2024

4mn

Over the last decade, the e-commerce boom, along with new ways of imagining shopping experiences and the growing influence of content creators, have given our consumer habits a makeover, and young people are driving the change. So what can we expect in the years to come? What will consumers be turning to? In this Explorer, Géraldine Chevallier, who helps businesses in their transformation endeavors as Director of Business Development Consumer & Retail at KPMG shares the major trends ahead.

One-click shopping – in just a few years, this deceptively simple concept has revolutionized our purchasing processes. Whether it’s consumer goods, catering services, textiles, home furnishings or entertainment services, the path from browsing to delivery has been distilled down to its most essential steps.

“Brands have very much understood this,” points out Géraldine Chevallier, a passionate advocate of innovation and an expert in the sector’s many developments. “The fluidity of the purchasing process has become crucial – for consumers, who are constantly seeking to minimize effort and save time when making purchases, it is a prerequisite.” In short, buying must be easy, quick and intuitive.

Anywhere, anytime, at any speed

“The search for instantaneous relationships is a global trend,” explains the expert. “The digitalization of exchanges and the omnipresence of smartphones have made us impatient.” The COVID pandemic has also given e-commerce a new impulse: just in France, for example, such sales increased by a further 19% between 2021 and 2022. According to the Fédération du e-commerce et de la vente à distance (Fevad), the 200 billion euro mark should be achieved by 2025.

Buy now/try now, pay later: spontaneous, intuitive payments

There’s a mighty new player in the e-commerce arena: mobile consumption: “m-commerce continues to attract new enthusiasts, with 75% of young people adhering to it. This practice is not to be taken lightly, as these 14-to-25-year-old digital natives will represent a quarter of the workflow in just five years’ time. A study carried out in collaboration with Fevad demonstrates that brands better take an interest in the aspirations and reflexes of this population.”

Being born into a legitimate digital environment that is taken for granted establishes a relationship of trust with mobile tools. As Chevallier explains, “while the over-40s and over-50s are concerned about the security of their data, and are learning to adapt to practices that are new to them, younger people are less worried. Online payment is not a problem for them, on the contrary. And having access to ‘buy now, pay later credit’ is a real expectation, inspiring new practices such as ‘try now, pay later,’ as practiced by Zalando.” The principle is simple: you order, you try and then you pay, usually within 30 days.

A consistent, experiential relationship, no matter the channel

In spite of all these trends, human interaction still has a central place in retail. Consumers of all ages are still looking for consistency when moving from one channel to another, and in-store experiences should be cohesive with a brand’s website and social networks.

“In this respect, the challenge for brands is to bring the same type of familiarity, closeness and quality to the digital experience as they would to the in-store one, which, it must be noted, is still important to digital natives. The difference is that the younger generation expects differentiating activations and new types of interaction with sales assistants, as well as web3 and augmented reality.” The quest for omnichannel customer intimacy has become a strong marker of differentiation, and brands are currently in a phase of accelerating these digital and physical interactions: “today, you can visit a store and enjoy a live shopping experience, while interacting on the brand’s e-commerce site or with specialized content creators. This call for experiences is slated to intensify.”

Sharing best practices across sectors

Consumers are more informed today than ever before, and want the best from all sectors combined: the best service, the best customer relations, the best practices – and the best experience. This drives brands to borrow good ideas from other sectors. The consumer practices of fashion and banking, for example, are coming together to create an enhanced customer experience, and sector-based trends are fading into each other, engendering a host of win-win situations.

Social commerce in the conversation age

In the United States, 97% of Gen-Z say that social networks are their main source of new product discovery. Information sharing, the influence of content creators, conversations, sessions with a personal shopper: these interactions between brands, their customers and their universe (of which influencers are a part) are intensifying, and have given rise to solid, well-established communities. “Social commerce is a very different way of selling. As the act of buying is carried out directly from a social network, the brand is expressed through the topics it raises and the values it defends, and the universes it occupies. This leads to more authentic, transparent and straightforward exchanges. We no longer hesitate to question brands and executives, and to talk about the subjects that are dear to us.” With this in mind, it’s hardly surprising that 49% of brands plan to increase their investment in social commerce in 2023 (Shopify).

Sustainable consumption is here to stay

The proximity mediated by social networks allows consumers to demand ever more from their favorite brands, such as more integrity, more transparency in their practices, and more accountability. To wit, 66% of Europeans5 say they have purchased products from the circular economy in the last 12 months (Oney x CSA). “This quest for integrity is not a recent phenomenon, but it is consistently growing. Brands’ CSR commitments – be it production relocation, product carbon footprint reduction, eco-design and circular economy implementation – are scrutinized by loyalists and detractors alike. In France, over 80% of online shoppers6 have already purchased refurbished or second-hand products – an interesting disruption! 61% of cyber-consumers and 69% of 18 to 25-year-olds want to increase their purchases in this market: “from refurbishing products to creating new platforms, brands will undeniably have to adapt to this new trend,” Chevallier concludes.