Generation Z Consumers Hold Significant Buying Power

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Generation Z consumers hold significant buying power, and the retail industry understands this and now has a laser focus on this cohort, according to a recent report by the National Retailer Federation (NRF). Members of Gen Z (born 1995 and later) are still mostly in their teen and pre-teen years, but they're already exerting influence over household family spending and shopping behavior, NRF said.

Now that this age group is getting older, NRF said it has studied Gen Z trends to see how they influence household purchases, and discovered that four in five parents say they involve their children in purchases more than their own parents did with them. In addition, Gen Z is responsible for a fundamental shift in the way families shop and this is having an impact on the retail industry, according to the report

The key factors cited by parents for involving their children in purchase decisions, according to the NRF report, are: because they will be using the item (57 percent), because their opinion matters to me (57 percent) and to teach decision making (56 percent).

Nearly nine in 10 parents say their children influence at least some aspect of their purchases – either for household items or for the kids themselves.

One factor driving this trend is the continued evolution of retail. As one parent of a Gen Zer noted in the NRF study: “When I was little, they didn’t have the internet so we couldn’t research products ahead of time. Now my son looks at stuff online on his own and saves me the time by finding what and where to purchase it, plus the average price for the item.”

That might factor into why over four in five say they involve their children in purchases more than their own parents did with them. The involvement comes in a number of ways, but typically Gen Zers assist by looking at products online or in a store, gathering product information and even adding desired items directly to a parent’s shopping cart.

Also, many parents mentioned they include their children as a way to bond with them, and savvy retailers are tapping into this behavior. In fact, brands like Walmart, Aéropostale, Disney and Target have already launched strategies that help make shopping an all-inclusive experience.

Parents feel it’s most important to include their children in the earlier phases of the shopping journey, so this is where retailers can really help ensure shopping is as easy as possible for busy parents. Although a significant majority of parents already feel retailers make it easy to include their Gen Zers, eight in 10 wish retailers made it even easier and 84 percent are more likely to shop at a retailer that successfully does so.

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