As the digital landscape becomes more accessible and engaging—and as digital natives themselves—the retail store is quickly losing its luster for Gen Z consumers. Fewer than 36 percent of consumers under 40 prefer to visit stores when interacting with retailers, compared to more than two-thirds of shoppers 57 and older, according to new research from consumer engagement firm Verint—and understanding the shifting shopping habits of younger consumers is vital for retailers as they refactor their customer engagement strategies in the post-pandemic era.
The firm’s predictive model quantifies how improvements to customer satisfaction (CSAT) will impact desired business outcomes, such as purchasing, recommending, returning and trust in the retailer. The most recent retail study shows that CSAT improvements will impact the likelihood to recommend and trust the most.
The survey reveals that Gen Z and Millennials have more complex purchase journeys, with over 75 percent using at least one other digital resource—such as ratings websites, influencers, and social media—to help inform their purchasing decision.
“Digital experience”—second only to price—is the biggest driver of customer satisfaction for Gen Z, whereas factors such as the appeal, quality and variety of merchandise hold greater importance for older generations.
The survey shows Gen Z does place a value in the retail store in the buyer journey, seeing its utility as a click-and-collect depot for merchandise. While 28 percent are making purchases via the retailer’s website or app, 51 percent either collect in-store or via curbside pick-up.
Shoppers under 40 are also more concerned with retailers’ environmental practices, rating eco-friendly packaging at least 15 points higher than Gen X and older consumers.
Of the biggest 25 U.S. retailers, Amazon, Publix and Costco top the CSAT rankings, with Costco, Aldi and Lowe’s topping the Net Promoter Score (NPS) rankings. However, the researchers note that the average NPS rating for the top 25 retailers fell by more than 5 points over the past year, to 37.1.
Gen Z is pushing the envelope of digital experiences
The research found that younger customers were more likely to experience difficulties completing a task during their first interactions with retailers; 44 percent of Gen Z shoppers and 43 percent of Millennials expended more effort than expected to complete an interaction. This may indicate that younger generations have higher expectations for digital experiences.
“Since Gen Z is the age group most likely to use digital solutions for some, or all, of their purchases, retailers need to ensure their digital experience provides a wide range of suitable products, with seamless purchase processes, to stand the best chance of retaining their business,” said Verint’s Jenni Palocsik, vice president, marketing insights, experience and enablement, in a news release.
“Gen Z are by no means the only demographic that brands should focus on to adapt and enhance the customer journey, but since they are most likely to engage digitally, seamless experiences are the biggest drivers of better CSAT, NPS and repeat business,” continued Palocsik.
“Connecting every customer touchpoint and surfacing information from traditionally siloed departments can drive decisions for improved customer experience,” she added. “By collecting regular feedback around factors such as merchandise, pricing and loyalty programs, retailers can continually enhance and improve shopping experiences.”
The Verint Experience Index for Retail Report 2022 ranks the omnichannel experiences of the top 25 largest retailers in the U.S. based on revenue as determined by National Retail Federation (not including quick service restaurants). The Index features a panel sample of 6,648 respondents in total, with at least 250-275 responses per brand. Responses were collected from Nov. 23-30, 2021. The Verint Experience Index is an episodic study including respondents who interacted with the brand in the last 30 days; scores are not comparable to continuous studies.