2019 has already proven to be a tumultuous year for retail. For every revolution, in the form of customer personalization, interactive mirrors and the promise of omnichannel, it seems another retailer is closing its doors for good. In April, Coresight Research reported that store closures in the United States in 2019 so far have already exceeded the total number that closed in 2018 . The firm stated that this year, U.S. retailers have already announced almost 6,000 (5,994) store closures, compared to 5,864 in all of 2018.
There is an apparent dark cloud lingering above the industry whereby brands are currently at crossroads; pushing them to either innovate or risk losing customers and joining the ranks of those who have closed their doors.
Over the years, a lot of brands have based their strategies on targeting millennials - seen to be one of the most influential demographics due to their disposable income and buying power. However, just as brands have gained insight on what makes millennials tick, a new demographic has emerged with the opportunity to change the landscape indefinitely.
We have seen the rise of Generation Z consumers, typically aged 20 and younger who predominantly use multiple channels, including social media platforms, to purchase. In addition to using social media platforms for direct purchases, Gen Z consumers are also heavily influenced by Youtubers and content creators. For instance, a recent report by Visual Objects identified YouTube as the most-visited website by Generation Z audiences .
It’s important that brands don’t discredit this new generation of consumers, since it is estimated that Generation Z will account for 40 percent of all U.S. consumers by 2020 . Yet, the demographic remains largely elusive.
A report by Accenture dived into the mindset of Generation Z to gain a better understanding of their buying habits. It found that, unsurprisingly, social media and digital channels are a key part of their shopping behavior with two thirds purchasing directly through social media.
A new demographic calls for a new brand strategy
With a new demographic swiftly gaining more influence, it’s never been more crucial for brands to shift their focus from the more “traditional” buying habits of millennials and develop strategies that enable them to reach this next generation.
