The rise of e-commerce during the pandemic has led many people to believe that that physical retail stores will soon be a thing of the past. After all, e-commerce feels more convenient as you can shop from the comfort of home. Even Google has seen an increase in the number of people wondering whether brick and mortar stores are dying.
Many people are wondering if physical stores are dying
We’re glad to report that, like many future predictions, the reality is a lot less scary. As post-pandemic studies and recent data has shown, physical retail is still thriving and here to stay.
While e-commerce grew in popularity during the pandemic, post-pandemic statistics show that people are returning to their old ways. E-commerce sales in 2022 have slowed down. Some of this is likely pent up demand for shoppers who missed shopping in person during the pandemic. But according to research, 59% of shoppers do not trust internet-only brands. At the same time, e-commerce only companies continue to struggle to turn a profit. Many companies who bet on an e-commerce only future are now paying the price.
Brick and mortar retail stores are continuing to grow
Even after all of the COVID-19 lockdowns, brick & mortar retail stores are thriving. In fact, for every brick and mortar business that shut down, two more businesses opened up. On top of that, sales in physical retail have actually gone up post-pandemic. In-store shopping has seen a 13.7% boost compared to pre-pandemic levels. This growth doesn’t just apply to big names like Walmart, but to small independently owned businesses as well! In fact, over 60% of small businesses are expected to grow their revenue over the next year. This is a trend that can be seen from pre-pandemic statistics as well. Reports show that between 2016 – 2021, the revenue of smaller retailers grew at an average of 51.33%.
And certain consumers actually prefer in-store shopping. The majority of Boomers and Gen X customers say that they shop in-store “all the time”. In fact, younger people such as Gen Z (along with Gen X) are two generations that actually shop more in-person than online. For them, their entire lives are already digital and physical retail appeals to them as experiential shopping
Another key reason why brick & mortar stores still appeal to shoppers is because it is still by far a better shopping experience. At the beginning we mentioned how e-commerce provides a certain level of convenience that physical retail can’t. Yet when it comes to immediate consumption, this is something that only physical shopping can offer. There is a level of satisfaction one can feel shopping in-store and taking something home right away. This is why the term retail therapy exists.
But beyond immediate satisfaction, shopping at brick and mortar stores allows customers to get an engaged shopping experience that they simply can’t find online. Being able to physically hold a product and sometimes try it out before purchase is a big factor in deciding to buy something. 59% of consumers say that the ability to try, touch and feel a product is key for in-store shopping over online.
And when shopping in-store, one of the top priorities for shoppers is convenience, especially at checkout. After all, 97% of consumers have backed out of a purchase due to inconvenience. So if you are in or planning to enter the physical retail industry, be sure to offer easy checkout options. Things like self-checkout enhance the shopping experience for customers greatly.
The future is omnichannel
Throughout this post, it may have felt like we are saying that e-commerce is worse than physical retail. However, the future of the retail today is really a combination of physical and digital shopping. As we mentioned before, consumers want convenience. Omnichannel offers the most convenience to consumers as it allows them to shop from anywhere, 24/7. There’s a reason why 58.6% of retailers are heavily investing in omnichannel fulfillment and 70% of small businesses have adopted digital tools over the past year.
The benefits of omnichannel aren’t just for customers either. Retailers are able to have more control over their business and sell more when they offer omnichannel shopping. After all, retailers who don’t sell on multiple channels end up missing out on ~30% of sales.
Being able to serve your customers in a variety of channels will soon be the standard in retail. For e-commerce, store pickup or fulfillment of online orders from local stores support main streets, is better for the environment and get products to customers faster as delivery costs increase. In order to keep up with the future, your retail business needs to be an omnichannel one.
Now, more than ever, is the best time to invest in omnichannel! Make sure your business is future-proof by implementing software that can support your business over time. Check out TAKU Retail and ensure your business is resilient and able to serve customers the way they expect to shop today.
Invented in 1994, the QR code was originally made so that Toyota could track car parts in their manufacturing process. 28 years later, QR codes have become so much more. In particular, the COVID pandemic helped popularize the use of QR codes in businesses everywhere. Whether you’ve seen it being used by shoppers adding social media accounts or to view a digital menu, it’s an increasingly common tool that retailers can use to speed up service and improve customer experience. Here are 4 different ways QR codes can help retailers.
QR codes can look like a complicated barcode but they are actually an image of information. For example, you can store everything from phone numbers and documents to website addresses. But sharing websites and social media accounts is definitely the most common use for QR codes. By adding a QR code to any marketing materials or signage, you are giving shoppers the fastest way for them to access your website or social media accounts. Instead of typing addresses or searching for accounts, shoppers can simply scan the QR code with the camera on their phones and access your information in 1-click.
Expert Tip! QR codes do not need to be limited to physical materials. QR codes can also be placed on things such as email signatures, profile pictures, and social media covers.
By making it easier for shoppers to get access to your online storefront and social feeds, you will attract more shoppers to your business. After all, being found online or having an online storefront will not only increase your online sales, it helps drive foot traffic back to your physical store as shoppers have an easy way to stay up-to-date on new product launches, special offers, etc.
Another way QR codes help retailers sell is to make it easier for stores to sell things from their physical shopfront window. For example, adding QR codes next to products that are displayed in your shopfront window that link to each specific product in your online catalog. This gives shoppers an easy way to scan a product to find out more or even buy online, even when your store is closed. Doing this makes your storefront window more engaging and informative – both of which are important for good customer experience.
Many retailers today use QR codes to make it easier for shoppers to follow their social media accounts. Since QR codes are scanned as website links, shoppers can easily open your social media accounts with 1 click. Making it easier for people to find your accounts will increase the likelihood that they will follow you. Place these QR codes anywhere customers and business partners can see them (email signatures, profile pictures, in-store signs, counter stickers, etc.).
One of the best uses of QR codes is to give shoppers 1-click access to guest WiFi in the store. You can create a QR code that store visitors can scan to be automatically connected to your guest WiFi. This is a special type of QR code that automatically enters the network name and password into an iPhone or Android mobile phone. Shoppers love it as it means no more entering network names or long passwords. It is also better for your network security as you don’t need to disclosing the actual password.
If you want to encourage shoppers to browse, offering free guest WiFi is a great way to get shoppers to stay for a longer time in your store. It doesn’t cost you anything and it’s been shown that shoppers that stay longer in a store buy more things and spend more money.
Scroll down to learn how to create your own WiFi QR code.
How to create QR codes
QR codes are very simple to create. All you need is online QR code generator to make them. When using these platforms, creating your QR code is as simple as pasting the website address you would like customers to open. Then press the generate button, and congratulations you will have just made your first QR code!
For standard QR codes, we have three recommendations: QR Code Monkey, QR Code Generator and Canva. QR Code Monkey is a great free option. QR Code Generator offers a few more features and even has a premium membership. Canva is our favorite option of the three. Canva is already a very versatile and easy-to-use application for creating designs. Their QR code generator paired with their design tools can allow for some really creative uses of QR codes.
The main difference when creating QR codes for WiFi sharing is that the code generator needs to support WiFi information. A good tool for this is QiFi.org which was built specifically for this.
All you need to do is enter the SSID (network name) and password for your guest WiFi network. You may also need to enter the Encryption type, so check your Wi-Fi settings if you don’t already know this. Once all of the information is entered, click Generate to produce the code.
Expert Tips! 1. For better security, always create a separate guest WiFi from your main WiFi network so that you have separate password access. 2. For better security, always make sure that you hide the password so that it cannot be seen in the user’s phone. With QiFi.org, fill the Hidden checkbox before clicking Generate. 3. Always test your QR code on your mobile phone before printing any marketing materials or sharing it to make sure it is working properly!
Now you know some ways QR codes can help retailers. Time to start implementing this popular technology to your business. You can follow one of the tactics we mentioned, or get creative and try your own tactic. If you end up coming up with your own QR tactic, please feel free to share it below in the comments!
Don’t let uncertain headlines give you the wrong impression, we are most certainly heading into a recession. With the IMF reducing their global GDP forecasts, there are tough times ahead. This can be a worrying time for business owners. But going through a recession doesn’t have to be as scary if you can prepare your business for it. Recession proofing your business today will make it much easier for you to ride out the storm ahead. This is Part 1 of TAKU’s series on recession-proofing your business.
What exactly is a recession?
A recession is a drop in economic growth in a country for at least two quarters (or 6 months) in a row. The drop in economic growth is calculated by GDP. Some people say that GDP does not truly represent the health of an economy. However, it is still a good indicator when to expect a slowdown. If you look at the graph below, you will see that Jan 2022 to June 2022 were the first periods of economic decline since the start of the pandemic.
This chart shows that the 2 quarters of 2022 have had drops in economic growth – officially making this a recession. (Source)
Knowing that your business will face a decline in sales or a lack of access to outside financing, we can begin by developing a game plan to recession proof your business.
Find ways to save money during a recession
More and more businesses will have cash troubles as the recession continues. So it is crucial that you consider ways your business can save money. Here are some tips regarding saving during a recession:
As a retailer you may be paying for services and products that are not essential to your business operations. It is important to take a look at the costs for your business and figure out which things you don’t absolutely need to keep your business running.
While you will want to review every single expense, it’s important to remember that the best way to stay profitable is to focus more on tools or services that help you sell more or save more money. This means, if you have to decide between buying a scale or running an ad campaign, you’re better off spending on digital marketing to keep sales up and possibly even grow market share when your competitors are pulling back.
One of the few good things during a recession is that demand will fall on things such as marketing spend. This can be good for your business as your competitors are spending less while it will cost you less to run ads.
At the same time, as demand for some services or products fall, when it’s time to renew a contract, make sure to try to negotiate for better rates or at least lower increases during these inflationary times.
Debt is often unavoidable when you’re running a business. But in these times of higher interest, all debts aren’t equal. Make sure that you’re familiar with the interest rates, fees and due dates associated with the debt you’re carrying. When paying down debt, always pay down higher interest debt such as credit card balances first to minimize the amount of interest you’re paying.
Investments are always necessary to maintain and grow businesses. But similar to what we’ve said about debt, all investments aren’t the same. The most important thing for any investment is to consider the return on investment. Return on investment refers to how long it will take for you to recover the cost of the investment. And usually ROI is best on purchases that help you optimize profitability by increasing sales or reducing your operational costs.
Pay monthly instead of upfront
Another thing to consider is whether or not what you’re looking to purchase is available on a monthly basis. This is particularly true with technology solutions. While it can appear to be cheaper to make a one-time purchase when buying software, the reality is that technology moves quickly and technology solutions that charge on a monthly basis offers a number of benefits:
Significantly lower upfront costs. In these inflationary and recessionary times, cashflow is king.
Constantly updated technology so that you always have access to new features that work with the latest devices. “Resilience” was a keyword during the pandemic. And a recession is just as uncertain for businesses. Having the ability to adapt your business with the latest, flexible technology might be key to your survival.
The ability to try technology to make sure it is right for your business. Most installed software cost the equivalent of several years of subscriptions. And if you’ve paid that much money upfront, you won’t be able to switch even if it’s not working out.
Use automation to reduce operational costs
Everybody has heard about the staffing shortage in the retail industry after the pandemic. With record high inflation, hiring staff is only getting more expensive. Where possible, consider using automation technology to reduce operational costs. For example, if you’re a busy store, solutions such as self-checkout kiosks are an easy way to lower operational costs while improving customer experience and sales by speeding up lineups.
Understand consumer needs
The businesses best able to thrive during a recession are those that are constantly aware of what their consumers are looking for. Even though overall demand will decline during a recession, there are product or service categories where demand may stay the same or even increase. This happened during the pandemic and it will happen again during a recession as shoppers change their buying habits.
Recession-proof products and services
The performance of some product types during a recession (Source)
The most recession-proof products are the types consumers will always need. Things such as food and energy will always be in demand. Normally speaking, businesses selling non-essential items will have a harder time. The interesting thing with the current recession is that there is also a trend of shoppers looking for ways to improve their lives after several years of pandemic restrictions.
The best example of this are products with “lipstick effect”. When shoppers do not have enough money to spend on big-ticket luxury items, many will find the cash to purchase small luxury items, such as expensive lipstick. So while it can be expected that shoppers will spend less overall on “discretionary” products, they will spend money on things that increase their standard of living, especially if they are good value for money. In Part 2 of our Recession-Proofing Your Business series we will take a deeper look into current retail product trends and how retailers are successfully marketing products during a recession.
Trim your inventory
As mentioned, lower sales lead to more unsold stock on shelves. When you’re carrying more inventory, you will need to deal with more theft, damage, obsolescence, and increased storage costs. You will need to get on top of this by:
Purchasing products your customers are more likely to buy. Do this by staying on top of any changes in your shopper buying patterns. This means tracking your top sellers on a weekly or monthly basis to see. For example, buying products more likely to have the lipstick effect such as home spa kits is always a smart move during a recession.
Stocking less seasonal products unless you are sure that they will sell. The selling time for seasonable products is more limited vs. products that can be sold year-round.
Have a good relationship with your suppliers to optimize your purchasing lead time. As a retailer, it’s important to have products in stock when shoppers want to buy them. But you don’t want to stock too early or too late to avoid locking in your cashflow or not having products to sell. As the supply chain problems during the pandemic start to improve, make sure you’re working with your suppliers to receive products when you need them. Depending on their own situation, good suppliers will try to work with you, especially during a recession, as their business depends on your own success.
Consider your existing operations. Are there ways you could add new sales channels or add products to generate new revenue? A few ideas you could consider include:
Adding more recession-proof products
Distributing to other retailers if you make your own products
Starting an online store under a different brand to sell only discounted or clearance items
The important thing to remember here is that additional revenue streams are incremental sales. As long you’re not adding a lot of extra overhead costs, they generally have the lowest marginal cost as you would not have made those sales anyways.
Partnerships and alliances with other businesses can help strengthen your business. You can reach out to other businesses and see how you can help each other during a recession. Partnerships can help make your offerings more attractive to customers. For example if you sell homemade soaps, you could reach out to a local business to start selling from their store or sell kits together with them. This way you have more products to sell and/or another way to reach new customers cost-effectively.
Take the time to really deepen your bond with your customers. Focus on providing excellent customer service to improve loyalty. Obviously this is an important strategy during all economic conditions, but during a recession it can really help you keep your business afloat. Studies have shown that shoppers have continued to support local businesses more even after pandemic restrictions ended. When customers are loyal to you they will continue to shop with you despite hardships.
There will be tough times ahead for all types of businesses. But this does not mean it is all doom and gloom. Smart entrepreneurs will look for ways to make their business more resilient by optimizing their operations, pivoting based on consumer needs, and even finding ways to grow. You should take some time and evaluate your business’ position. If you are able to make good decisions during this time you may just come out of this recession better than before.
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You may have heard of the retail term “guideshop” in the last several years. Brands such as Bonobos have had great success with guideshop stores. This retail strategy is a throwback to the idea of “showrooms” and works particularly well for retailers in the age of ecommerce. In fact, running a guideshop is also known as “showrooming”. But what exactly is a guideshop and why should retailers consider it for their physical stores?
A physical store where customers can experience the products before purchasing it. The physical store only showcases the product for customer experience but do not sell any physical items. Customers place orders in the physical store [that] will be delivered to their homes.
It’s easy to understand why guideshops are also known as showrooming. After all, showrooms are traditionally physical locations where businesses display merchandise so that consumers can engage with products before ordering. One of the best modern examples is Dyson’s demo shop. Showrooms and guideshops typically carry little to no inventory for immediate purchase.
Who should consider this store strategy?
Showrooming and guideshops are traditionally best for retailers who sell products which customers prefer to take a look at, try on, or test out before purchase. Typically these products don’t sell as well if only sold online. In particular, showrooms are great when the retailer’s products physically take up a lot of space or are of high-value, both of which makes it hard to stock inventory in-store. Think of things such as appliances, furniture, jewelry, etc. With furniture for example, retailers have limited warehousing space since their stores need a lot of display space. But their shoppers often want to physically see how big a piece of furniture is, how comfortable it is, and how it feels in person before purchasing.
The change today is that non-traditional showroom products are also able to use guideshops to offer better customer service with smaller, more cost-effective shops. This is exactly how Bonobos guideshops work. They are smaller stores where customers can go in and try on the entire product line for delivery at home. But Bonobos has made an effort to provide above-average customer service by training employees to help customers find the right fit and size.
Not only are guideshop stores easier and cheaper to operate without the cost of carrying stock, better trained sales associates encourage higher sales per shopper. And naturally, because customers will have a profile setup for their pickup or delivery, all of the shopping data in-store and online is stored for better customer service and personalized digital marketing.
Another key market for guideshops are retailers that manufacture or sell their own private-label brands. When you sell a brand that cannot be found anywhere else, there isn’t a risk that shoppers will try on merchandise in-store and buy the products elsewhere. In this case, guideshops offer a cost-effective way to run more smaller physical stores without the carrying costs of traditional brick & mortar stores.
What kind of customers does this appeal to?
Guideshops tend to attract shoppers that enjoy touching, seeing or interacting with products before buying them. The slower, discovery process involved with customer service-driven guideshops and the inconvenience of carrying products around while shopping makes guideshops more attractive to shoppers in urban centers or walkable main streets. The strategy generally works even better for high value items where shoppers expect superior service and delivery may be considered more secure than walking around with a bag from an expensive store. For example, people often visit the Apple Store to test out new devices since they are expensive. But oftentimes during checkout, Apple shoppers will have their purchase shipped home to avoid carrying a bag around with the Apple logo on it.
Hopefully this article has helped you get a good idea on why showrooming is great. To recap, here are the benefits of using a guideshop store strategy:
Increase sales: People spend more money when they are purchasing in-store. Impulse purchases are more likely. If you are an e-commerce company or a store looking to add an expensive new product line, a guideshop approach will help you increase your average order size.
Lower costs: Carrying less inventory is the easiest way to lower the overhead costs of your business. Keep in mind, you can also offer store pick up options to keep costs lower!
Better experience for customers: Employees focus on helping customers find the perfect product for them and even upsell additional ones.
Sell more things: With less space required to stock products, showrooming allows stores to showcase more products. Retailers can sell products without having to stock anything and can simply order for delivery after taking payment.
Now that you understand what guideshops are, consider whether this could be a good strategy for your retail business. It is definitely a retail trend which will continue to change the way people shop.
Learning the ins and outs of retail is a journey. But it doesn’t have to be scary. TAKU is here for you. Check out our retailer’s glossary to read up on the 100 most essential terms in the world of retail! Click on the image below to learn more.
The metaverse is a term you’ve most likely noticed being tossed around on the internet in the last year or so. Many predict that the metaverse is the future of the internet. At the moment it is used primarily for entertainment purposes. While the metaverse may seem like a gimmick right now, it will become so much more than that. In the long term, the metaverse has the potential to transform the shopping experience, and create a more engaging and immersive experience for consumers.
You’ve probably heard that Facebook’s parent company changed its name to Meta. Facebook rebranded with the hopes of leading the metaverse’s development. But what is ‘the metaverse’? The term metaverse refers to a shift in how we interact with the digital world‘ The metaverse is the idea that there will be digital worlds that exist alongside the real world.
These digital worlds (where many will work and play) will be the next step in internet use. There have already been a number of concerts and events taking place in the digital space. While it’s still early days for the metaverse, retailers should get involved earlier, because the cost of entry is lower today.
During the early days of the internet, many businesses were quick to dismiss the idea of shoppers buying online. But the first businesses who started online stores ended up with a major advantage versus their competitors. So the question remains, how can retailers take advantage of the metaverse?
You can own a digital space for your business just like you can own a physical space for your brick and mortar store. A digital space allows you to interact with your customer and introduce them to your products.
When saying digital space you may be confusing it with an online website or ecommerce store. In this situation a digital space is a 3D environment on the metaverse where companies can actually create virtual stores. The virtual stores actually allow users to interact with product and see them in a 3D space. Whereas on an ecommerce store the consumer would only be able to see pictures and videos of the product.
The metaverse would allow you to create a new shopping experience for your customers. Forever 21 used the platform *Roblox to allow shoppers to create their own versions of digital Forever 21 stores. In these user-created stores, digital versions of existing merchandise were sold. The products were then actually delivered to the buyers’ real-life homes.
*For those unaware, Roblox is an online gaming platform which allows users to create their own virtual worlds/games. Similar to YouTube, where users create content for others to watch – in Roblox users create games for others to play.
Simply rehashing your existing store on the digital front will not be a successful way to deliver this new shopping experience. Sky Canaves, a senior analyst at Insider Intelligence says that there is no need to be stuck between 4 walls in the metaverse, she continues that metaverse shopping can be so much more experiential. Imagine shopping for a car and being able to drive the car around in the Italian countryside all from your home. This is the type of experience merchants will want to foster for their metaverse customers.
Merchandising’s new boundaries
Metaverse shopping will help push merchandising to new limits. Showcasing your products in the digital world will allow for new and exciting ways for customers to see your offerings. Similarly to the car example in the last paragraph, companies can allow consumers to test merchandise in the virtual world. Besides the virtual world, retailers can leverage the new technology associated with the metaverse to show off their merchandise. Back in 2017, Ikea introduced their app Ikea Placewhich allows customers to use their iPhone cameras to see what Ikea furniture would look like in their own homes before committing to a purchase. This use of AR (augmented reality) has become commonplace for many retailers.
How some companies envisioned early metaverse shopping (source)
The beauty of the metaverse is that unlike a traditional brick & mortar store, a retailer’s merchandising is not confined to the physical space available inside the store. Shopping on the metaverse allows retailers to showcase an unlimited amount of products in a limitless space. For example a hardware store could showcase every single type of cabinet, flooring tile, or whatever other product they have in a virtually infinitely sized warehouse. Furthermore searching for these products on a digital store will be much easier than a physical store. Users could hypothetically type in what they are searching for and have the product magically appear in front of them so they can inspect it before purchasing. For a better idea of what this could look like, check out companies’ early visions of metaverse shopping.
Marketing with the metaverse
25% of people will spend at least one hour a day in the metaverse to work, shop, attend school, socialize or consume entertainment by 2026. This provides a great opportunity for brands to get their foot in the door and build brand awareness with many people. We mentioned previously how Forever 21 is using Roblox to get an entry into metaverse shopping, well this does not only allow them to sell online in a new way but also to get their name out there to a whole new market. Let’s face it, it will be the younger generations who wholeheartedly adopt the metaverse. So metaverse shopping offers an opportunity to connect with a whole new audience.
Other marketing opporturnities
Besides building brand awareness, companies can hold other sorts of promotions in the metaverse. Brands can host special events in the metaverse such as classes, conferences, and workshops. For promoting the film ‘In the Heights’ Warner Brothers held a large block party on the Roblox platform. This made for an accessible way for consumers to partake in a promotional event.
Retailer can even start offering promotional exclusives on the metaverse. For example you could pair the sale of a shoe at a shoe store with a digital version of the shoe for an online game like Fortnite. In fact Nike has already filed patents to begin selling digital versions of their products.
A company who wants to succeed in the metaverse will be paying attention to the different ways big brands are interacting with it already. Take the lessons from the big players and see what you can change in your approach. We understand, the metaverse is still young and nothing is concrete yet. But by paying attention to what is going on in the digital space you may come up with the next big idea which will influence everyone else. There is some investment and technical know how needed to get involved in the digital world. Keep your ears open and your eyes peeled as the metaverse will continue to grow. The new digital front will provide a bunch of new opportunities. You don’t want to end up like the brands who dismissed the internet back in the 90s.
With TAKU Retail you can create an all inclusive and integrated omnichannel strategy that will get you ready to move your physical store to an online platform. Find out how TAKU Retail can help you achieve a seamless and successful omnichannel system for your business below!
Generation Z is an important customer base for retailers. Gen Z is the generation after millennials and includes anyone born after 1997. There are several ways in which Gen Z is different from previous generations.
Generation Z is more racially and ethnically diverse than previous generations. They are also on track to be the most well-educated generation so far. One of the biggest reasons that Gen Z is unique is because they are digital natives. This means that they have no memory of the world before the existence of smartphones.
As such, Gen Z prefers on-demand communication and entertainment. Members of Gen Z are heavy users of social media. They connect across multiple devices, such as phones, tablets, and laptops. Statistics show that 58% of Gen Z have bought something they found through social media.
It’s not just social media that’s important to Gen Z. Social commerce – the process of selling products on social media – is too. According to a Forrester report, 29% percent of people under 25 said they complete a purchase on a social network without leaving the mobile site or app at least once a week. Compare this with only 12% of people ages 45-54.
They also experience brands across multiple channels. A Pew Research report shows that 85% use YouTube, 72% use Instagram, and 69% use Snapchat. TikTok has become increasingly popular among Gen Z. A recent survey showed almost 40% of Gen Z say they’re influenced by products they see on TikTok.
Unlike other generations, those in Gen Z exist in an “always-on” technological environment. This means they are also “always-on” purchasers. A typical path for a Gen Z shopper might be like this:
They shop online, whether they are at school or home.
They see something they like but they don’t buy it yet.
They visit a brick-and-mortar store because they want the experience of browsing in the store.
Gen Z means big business for retailers. According to Forbes, Gen Z represents an estimated $143 billion in annual spending power. Gen Z also makes up more than 40% of all US consumers. The digital-first world of Gen Z is a big influence on other consumers. This means that the digital-first world of Gen Z will become the new standard.
Five ways retailers can attract Gen Z consumers
1. Flexible financial payment options
Offering Buy Now Pay Later options is an important way to attract Gen Z consumers. According to NerdWallet, one in five 2021 holiday shoppers used Buy Now Pay Later. Twenty-two percent of those shoppers were members of Gen Z.
Buy Now Pay Later appeals to Gen Z’s desire to purchase trendy items with easy-to-understand, no interest fee installments. It also appeals to Gen Z’s impulse to get those items immediately while they’re still “cool.” Giving Gen Z those options makes good business sense. In a PayPal and Netfluential study, 42% of merchants said that “buy now pay later” options reduce shopping cart abandonment.
Consider adding PayPal Credit which offers Buy Now Pay Later
2. Personalized experiences
Gen Z wants to feel “known,” not only seen and heard. This is why personalized product recommendations will attract Gen Z consumers. According to an international study, 75% are more likely to buy a product if they can customize it.
Care/of‘s personalized daily vitamin packets customized for individual customers (source)
Forty-one percent of Gen Z will provide their data to businesses if they receive a personalized experience in return. This is an excellent way for retailers to gather customer data. It also helps businesses target their online sales and marketing tactics to Gen Z consumers. If retailers don’t make sure to capture the Gen Z audience they risk losing that customer base. Forty-one percent of Gen Z consumers will leave a website if it doesn’t predict what they like, want, or need.
3. Entertainment and engagement
The digital natives of Gen Z spend a lot of time on the internet, with 65% seeking entertainment there. Social media apps are one place where Gen Z finds entertainment. According to studies, 20% of Gen Z spends more than 5 hours a day on TikTok. Since Gen Z also loves personalized content, it makes sense that they will look for organic content while they are scrolling online.
Kylie Cosmetics’ TikTok page with a built in catalog (source)
This desire for instant gratification means they want an easy, enjoyable shopping experience. Gen Z uses multiple channels for both entertainment and shopping. They also want their shopping experience to be frictionless across all of these channels. Gen Z loves to create so retailers should take advantage of this providing them with customizable content they can create and share.
4. Social responsibility
Gen Z is more invested in social responsibility than previous generations. Their interest in social responsibility shows in their shopping habits. Seventy-two percent of Gen Z are more likely to buy from a company that contributes to social causes. Gen Z will also pay more for products they think are socially responsible. Sixty-four percent of Gen Z consumers are willing to pay a premium for grocery products that have sustainable packaging.
There are many ways that retailers can make their businesses more sustainable. They can recycle old goods and source sustainable brands and products. Going paperless is a great way for businesses to reduce waste. Brick-and-mortar retailers can recycle old goods or even use refurbished or recycled materials for in-store displays and decor. Upcycling or donating unsold stock or samples are other ways that businesses can invest in sustainability.
Retailers can find ways to reduce their carbon footprint in shipping and logistics. They can also give customers the option to choose carbon-neutral shipping options. Above all, retailers should set sustainability goals and stick to them. They should be transparent with their customers about their processes.
For Gen Z, authenticity is more than a buzzword, it’s a way of life. Gen Z wants a quality product with positive online ratings and reviews and good customer service. They also want to feel like they can trust retailers’ advertising practices. Eighty-two percent of Gen Z trusts a company more if the images they use in their ads are of actual customers. You can entice Gen Z customers by emphasizing that your brand stands for something beyond making a profit and seeks to improve the world in some way. Retailers who are transparent and share information about their business processes and how they operate will be able to attract Gen Z customers.
TAKU Retail can help you attract Gen Z customers by providing a seamless shopping experience. You can market your products on social media and meet Gen Z customers where they live without any extra effort – simply use your existing POS data automatically! Our customizable in-store and built-in e-commerce options will offer Gen Z the flexible omnichannel shopping experiences they want. TAKU Retail also offers live chat so that Gen Z can enjoy a more personalized shopping experience.
