Meet the New Shopper in Town: Generation Z

There is a great deal of discussion about the purchasing power and lifestyle habits of Millennials—those individuals who were born from 1980 to 1996. And it’s no wonder—there are 75 million Millennials, contributing roughly $200 billion in retail sales each year in the US alone.

However, there’s a new kid in town. 

And that new kid is the “Centennial” or “Gen Z.” These are children—indeed, they are mostly still children—who came into this world from 1997 to the present. Collectively, Centennials contribute $44 billion in U.S. retail purchases, which is expected to reach $200 billion by 2018—a key reason that retailers sit up and pay attention.1

Who are the Centennials?

As mentioned earlier, this generation of buyers are basically today’s teenagers and their younger siblings. They make up 25% of the population and may be 40% of the population (80 million) by 2020. They are the children of Gen X-ers like myself. I have three of them living in my house and was intrigued to discover that many of the studies about Centennials ring true.

As the first mobile-native generation, these kids have had access to mobile devices, such as smartphones and tablets, since they were toddlers. In addition, Centennials literally cannot remember a time when there was: 

  • No Internet
  • No Facebook or other social media channels
  • No discussion of the post-9/11 world or the "war on terror"
  • A booming economy, like we had before the "Great Recession"
Centennials are described as much more optimistic, hopeful, and happy compared to Millennials. In addition, they are known to be altruistic, compassionate, individualistic, and very accepting of differences, such as a broad spectrum of racial and gender identities.  As a confident, ambitious generation of young people, they also express interest in entrepreneurial pursuits and someday starting businesses.2

Nevertheless, due to growing up in the edutainment age, they have a very short attention span—about 8 seconds!3   Therefore, they expect information instantly and seek out data constantly to help them make decisions.4

The Gen Z Shopper

Most members of this generation take their time to make purchases; they research product information and pricing and read product reviews. And most of this research is done online—more than one-third of the time on smartphones—more so even than millennials. Centennials appear to value product quality over price and frequently rely on product reviews to decide on and validate purchase decisions.4

Reaching Centennials Where They Are

On average, Centennials have access to five different screens, which may include laptop computers, mobile phones, and iPads. However, Centennials use smartphones considerably more than Millennials and they use laptops considerably less. In addition, they watch TV less often than all other generations. They favor social channels such as YouTube, Snapchat, and Instagram, compared with Millennials who prefer Facebook, Twitter, Google+, and Pinterest.5

Although Gen Z shoppers like to browse online as shoppers, they still prefer brands that have a brick-and-mortar presence—brands such as Nike, American Eagle, and Urban Outfitters—over those that just sell through eCommerce. Although they are fine shopping on, they shun mass retailers.

What Does This Mean for you?

Understanding the priorities of the Gen Z shopper will help you to develop strategies for meeting their buying needs. 

  • As the first omni-channel and mobile-native generation, Centennials expect cross-channel purchase opportunities. This means that you must be sure that your product information is complete and accurate across all your retail channels.
  • Centennials rely heavily on product reviews to validate their purchase decisions. In fact, they prefer reviews over recommendations from athletes or celebrities.6  Therefore, be sure that reviews can be easily found and include all relevant feedback, even feedback that is negative. These young shoppers are skeptical of reviews that are all positive and include no constructive information.
  • While conducting research, Centennials look for opportunities to engage with the web site and the brand. For retailers, this means providing a method for shoppers to ask questions or obtain additional information. Some retailers targeting this demographic use gamification and special offers to attract attention and engage buyers.
  • Provide visual content, such as images and videos. Centennials are used to watching a lot of videos, even on their small screens. They are eager to see how people interact with the product.7
  • Tell stories about your products, making them fun and compelling. Some retailers have been successful with short serials on social media and video that engage shoppers and encourage them to return frequently to the web site or social media channel. Make sure you are using the social media channels that are most popular with Centennials.8

Be Ready to Change Your Strategy

Centennials are still very young and just coming into their own with respect to the purchasing power they wield. Therefore, as they get older, not only will their lifestyles change, but also the technologies and tools they adopt. As they move from middle and high school into college and career, they may find themselves to be more or less busy, more or less financially secure, and with very different priorities from their current circumstances.

Therefore, as retailers, you must be ready to change too. Keep your eye out for this independent and confident generation, as they navigate the changes and challenges that are sure to face them in the coming years.

This blog post was written by Kathryn Zwack, Content Manager at inRiver.


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