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Articles & Research

06/25/2019

Location Data Revelation: Gen Z Returning to Physical Stores

The retail industry is on the cusp of a major paradigm shift. If you’re thinking that it’s the collapse of physical retail — think again.

Generation Z, the first generation of true digital natives, is currently coming of age. They account for about 25% of the population, and they’re expected to make up 40% of consumers in the US by next year.

They’re a huge market force and, contrary to generations before them, they’re showing a quite a preference for shopping in-store as opposed to online.

Gen Z Flips the Script

Generation Z has always existed in a world with the internet. It’s been a given for them their entire lives. Yet despite the huge eCommerce infrastructure they’ve always had access to — which developed as the Millennial generation grew up — a whopping 80% of Gen Zers enjoy shopping in physical stores.

*Casper showcases their mattresses and other accessories in cozy cabins to draw visitors in*

What’s fueling such a drastic shift in shopping preferences in this upcoming generation? It’s a combination of three main driving factors:

Gen Z strongly prefers to experience products, test them out in person to see if its the right fit for them, before making a purchase
They are looking for shopping experiences that are more personalized to them, their interests, and their needs
They expect brands to engage with them on a deeper level than just at the surface

Interestingly, the second two factors here are things that Gen Z learned on the internet — where personalized ad and shopping experiences are common, and brands can easily and authentically engage with customers.

Despite the huge eCommerce infrastructure they’ve always had access to, a whopping 80% of Gen Zers enjoy shopping in physical stores.

Gen Z shoppers are now looking for those internet-born characteristics in their physical shopping scenarios, which throws a second curveball into the traditional retail formula.

Traditional Stores Won’t Cut It

Because Gen Z grew up on the internet, they learned to expect highly personalized shopping experiences and unique, innovative, immersive branding efforts. The web is awash with them; your run of the mill store, with its “pick an item off the shelf” format, is not.

What Gen Z is looking for, then, is more than just in-store shopping — it’s in-store shopping experiences. And perhaps the most interesting part of all of this is that the brands who seem to really be in sync with Gen Z are not traditional physical retail outlets, but companies that were born and raised on the internet.

What Gen Z is looking for, then, is more than just in-store shopping — it’s in-store shopping experiences

We used Ubimo’s Polaris, our self-service location intelligence platform, to track and analyze Gen Z’s behavior compared to generations before them, particularly Millennials. We took the real-world behavioral data of these two generations and mapped them against older brands with traditional physical retail presences and younger, digital-native brands that are only recently emerging into the physical retail space. We then analyzed the data to determine four key metrics: lift, efficiency, affinity, and exclusivity. Here’s a peek at of our findings:

For more data on Gen Z’s unique shopping preferences, the brands that are successfully adapting, and the role location intelligence plays, download our Gen Z Report for free today.