Retailers: Gen Z Values Brick and Mortar Stores More Than You Think

By Bob Phibbs

Oracle NetSuite and I partnered on a survey to find out exactly where the disconnect between shoppers and retailers is occurring by generations and how those findings could point the way forward for brick and mortar retailers.

Retailers have fallen behind in offering in-store experiences that balance personalization and customer service, but now there’s an opportunity to take the reins back. The expectation from consumers is clear and it’s up to retailers to offer engaging and custom experiences that will cater to shoppers across a diverse group of generations.

Gen Z Values Brick and Mortar Stores More Than Their Parents or Grandparents Anecdotal thinking is that since GenZ and Millennials are on their phones more than any other generation, and they would be the least likely to go into a store, but the survey results tell us otherwise with GenZ and Millennials the ones most likely to do more in-store shopping.

But there’s caution too as GenZ values interaction with retail associates less and report feeling more annoyed with in-store interactions. I believe this is a result of the growing trend of untrained customer service that has taken over the retail marketplace over the last two decades.

That’s important to note because the Generational survey reveals Millennials, Gen X, and Boomers really want store employees to help them.

With nearly every respondent reporting that they value brick-and-mortar stores, now is the time to stand out by crafting every in-store interaction with the goal of keeping all shoppers coming back.

Survey Says…

Retailers Struggle to Keep Stride with Generational Shoppers

Personalization is key to winning with shoppers in digital and physical experiences.

Today, 42% of consumers are willing to pay more for a product in order to have a more personalized shopping experience. This is particularly evident with Millennials, with 63% noting they would be willing to pay more for a personalized experience.
Despite this, retailers are struggling to personalize the experience offered to different generations. In fact, almost half of retailers admit they have not made progress in tailoring the in-store shopping experience to cater to different generations.
One example of how expectations differ among generations is the types of in-store interactions expected. 56% of Millennials, 44% of Gen X, and 43% of Boomer generations all noted they would feel more welcomed by more in-store interactions. Gen Z valued in-store interaction the least with 42% saying they would feel more annoyed from increased interaction with retail associates.

OK, let’s unpack that last one…

Someone running after you telling you what is on sale, like I had recently at a GAP store, or hounding you to interact with them by pulling out shirt after shirt, as I had at a Robert Graham store, would be annoying to all generations.

To read more about NetSuite’s insights into the report’s finding visit NetSuite’s cloud blog.

The key is for the retailer to come up with a branded shopping experience that delivers a wealth of customer service from the more basic, being there to show someone where a product is, to the more advanced ability to compare and contrast the benefits of one product versus another, and on to the ability to add-on things the shopper hadn’t thought they needed.

And I’m not surprised younger consumers would feel annoyed interacting with staff…

Most of GenZ and Millennials have experienced bad service their whole lives since service levels in retail, like I said, have been dropping for decades. Just because your associate has a tablet doesn’t mean they will be more personal, and it can often be just the opposite.

In short, the youngest generation doesn’t know what good customer service they’ve been missing because so few retailers are delivering it anymore.

Beauty is in the Eye of the Beholder: Building A Generationally Inclusive Reality in Retail

The in-store shopping experience remains an important part of the retail environment for all generation groups, but the progress retailers are making to improve the in-store experience is being viewed differently by different generations.

Despite the stereotypes of being so called digital natives, 43% of both GenZ and Millennials are most likely to do the most in-store shopping this year followed by 29% of GenX, and 13% of Baby Boomers.
That means retailers have every right to hold onto a more optimistic outlook on the future of retail, with 50% of executives expecting consumers to engage in more in-store shopping throughout the year.
The progress retailers are making to improve the in-store experience is being viewed differently by different generations. Of all the generations surveyed, 57% of both GenZ and Millennials found most retail environments inviting followed by 40% of Gen Xers, but only 27% of Baby Boomers.

GenZ and Millennials have responded to the massive investment in new store designs and capabilities. Boomers are the generation most concerned with service over style.

Insta-Famous Brands Reach GenZ and Millennial Consumers

98% of retail executives think that engaging with shoppers on social media is important in building stronger relationships, but what do different generations think?

65% of GenZ consumers and 62% of Millennials believe that social media has an impact on their relationship with brands.
But older generational groups have distanced themselves from interaction with brands on social media. More than half of Baby Boomers and 29% of GenX consumers do not engage with brands on social media.
38% of GenZ shoppers are much more likely than other generations to engage with retailers on social media to get to know the brand compared to just 25% of Millennials, 27% of GenX and a paltry 21% of Baby Boomers.

So since GenZ is the most likely to want to come into your brick and mortar store, if you’re an older generation who have stopped using social media - that’s a problem. GenZ is driving online-only microbrands like Showpo and Frank and Oak who are using social media to amass a loyal customer base too.

Due to an engaging social presence, those younger shoppers feel it is their brand as much as Boomers used to feel Macys or Nordstrom were theirs. You must engage on social media if you hope to draw these younger consumers into your stores and then make sure they can find products found on social media in your brick and mortar stores.

Retailers View Emerging Technologies Through Rose-Colored Glasses

Emerging technologies like AI and VR are increasingly playing a role in crafting intuitive retail experiences but these technologies are not yet widely accepted across all generations of shoppers.

Retailers have high expectations for emerging technologies with 79% believing AI or VR technology in their stores will increase sales.
Adoption of emerging technologies varies by generational group. Emerging tech is most attractive to Millennials, with 50% noting they are more likely to go into a retail store if it prominently features AI and VR technology. Emerging tech was not as attractive to GenZ shoppers and was even less attractive to GenX and Baby Boomers.
Consumer perceptions of VR varied widely across different generations too. 58% GenZ feels VR would have some influence on their purchase decisions, while 59% of Baby Boomers said VR would have no influence on their purchase decision.

In Sum

GenZ is looking to increase shopping in brick and mortar stores this year, but remember, they look for authentic connections with brands through social media first. GenZ makes up one quarter of the U.S. population and by 2020 will account for 40% of all consumers.

This generational difference can lead to a conflict in your store’s retail customer service experience.

Due to decades of diminishing customer service in brick and mortar stores, Gen Z is the least likely to want in-store interactions, yet the Millennials and Boomers they will be waiting on want a more personal and engaged in-store experience.

With less and less training of retail employees, your GenZ-er will bring their distaste of engaging with a shopper to your salesfloor thus making many of your new store designs useless and your retail store becomes just a warehouse store where your shoppers have to do the work of trying to engage an employee to help them.

Yet GenZ needs interaction when they come into your store so when they come in to find Kim Kardashian’s newest beauty products they saw on her Instagram feed, you have to have employees trained to build quick rapport to show them where it is and how to use it.

And until retailers train their GenZ employees on what engaging and personal customer service looks like, those employees will be squandering the renaissance of interest in brick and mortar stores by denying the other three generations of shoppers the customer service they expect in order to purchase.

And none of that can be replaced with AI or VR…that’s your hope.

Note: For this survey, 1,200 consumers and 400 retail executives were surveyed by Wakefield around the overall retail environment, in-store and online shopping experiences and advanced technologies. Both retailers and consumers were surveyed from three global markets including the U.S., U.K. and Australia with retail executives representing organizations between $10-100 million in annual sales.