What do tomorrow's shoppers think and feel about retail?
For any kind of commercial business, staying ahead of the curve when it comes to market trends is a prerequisite for ongoing success. If you want to keep sales high and profits healthy, you need to keep delivering goods and services that customers want. This means remaining alert to changes in their tastes and expectations, as well as looking out for what competitors and new market entrants trying to disrupt things are up to.
By and large, retailers and brands tend to think about such market trends in the short to medium term - what are my customers looking for right now that I need to be aware of to prop up performance over the next 12 months? What can I do to get a headstart on my competitors over the next two to three years? How do I remain competitive against marketplaces like Amazon?
We spend less time thinking about long-term trends, about what our market might look like in 10 years’ time or more. This is partly because there are inherent difficulties in making predictions so far ahead, and partly because the pressing concerns of the present more than occupy our time and energy.
But in the interests of staying one step ahead of the competition and planning to keep on top of shifts in consumer habits, it pays to keep an eye on the way things are shaping up further in the future. That is why, for the first time, Wunderman Thompson Commerce has decided to do something new to complement our regular series of Future Shopper consumer market surveys. As well as taking a deep dive into the habits and attitudes of current digital shoppers, and gleaning what we can about consumer trends in the short-to-medium term, this year we have also taken a longer view, commissioning our first in-depth study of what tomorrow’s consumers - today’s 6 to 16-year-olds - think and feel about shopping.
There are, of course, some challenges to extrapolating accurate market forecasts from the opinions of under-16’s. People change as they get older, what young people say about shopping today might alter considerably by the time they reach adulthood and have their own disposable incomes to spend. But from a strategic point of view, today’s youngsters represent an untapped market that will have a significant impact on retail in a decade’s time. So-called Generation Alpha - the first born and raised entirely in the 21st Century - has grown up at a unique time in human history. It is the first generation fully immersed in digital technology since birth, whose first memories as consumers will involve shopping via websites and mobile apps, delivery-to-the-door being as common as going to the shops, Amazon and multichannel discovery options.
Understanding this generation will be a key piece of the jigsaw for brands and retailers as they look to shape business strategies heading into the next quarter of this incredible century of change. So let’s start with a simple question - what do today’s children, the consumers of tomorrow, think and feel about retail, and what can brands takeaway from that?
In compiling our Generation Alpha study, we surveyed 4000+ 6 to 16-year-olds split evenly between the UK and the US. We asked them a range of questions covering topics such as what influences them to want to buy things, how and where they like to/would like to shop, their preferences when it comes to shopping and what they would change if they could. All of these provide valuable insight for any brand and retailer interested in a glimpse of what the lucrative young adult market of 10 to 15 years’ time might expect from retail experiences. Let’s take each of them in turn.
Video stars as social builds influence
Looking at influences on purchasing decisions, two stats leap out from our survey results - the role of social media and online video. In our Future Shopper 2019 survey, we found a sharp generational divide in the role social media plays in digital shopping journeys, with 49% of 16-24 year olds and 43% of 25 to 34 year olds using it to find inspiration for a purchase, compared to just 20% of 45-54 year olds and only 12% of over-55s. In our Generation Alpha survey, a third of 13 to 16 year olds (32%) said social content was already an influence on their shopping habits, while a consistent quarter of participants across all under-16 age groups said social media influencers have the biggest impact on them wanting to buy something.
The message to brands is clear - social media will continue to have a huge impact on the shopping behaviours of young people, and the time to get your social strategies right is now. But where Generation Alpha might represent a departure from what has gone before is the role so-called online influencers have to play on their decision-making. More than half (55%) said they want to buy something that their favourite YouTube or Instagram personality wears, uses or recommends.
Today’s 6 to 16-year olds have grown up with YouTube, and it is this DIY alternative to traditional broadcasting that has allowed celebrity figures such as PewDiePie to rise to prominence. Starting out as a gaming commentator, PewDiePie’s videos have now amassed 23.2 billion views and he boasts 101 million YouTube subscribers. On the back of this stardom, he has been able to launch a merchandising brand worth some $30m.
What is particularly interesting is that this collision of social media and online video seems to have the biggest impact on the youngest Alphas. Overall, online video content came out as the most significant single influence on children wanting to buy a product, cited by 24% of our survey participants. The figure was higher among six to nine-year-olds (27%) and 10 to 12-year-olds (29%) than young teenagers (16%). Perhaps we could conclude that the popularity of YouTube stars wanes as youngsters get older. But another message for brands would be that video is the content of preference for young people, and it is having a significant and direct impact on how they look at shopping.
From technology to the shop floor
From the results of our survey, there is no doubt that technology will play a key role in how today’s children shop in the future. When asked how they would most like to shop in 10 to 12 years’ time, a third (34%) said they would like to see new technology that made shopping easier, again weighted more towards 6 to 9-year-olds (39%) and 10 to 12-year-olds (38%). This was also a more popular proposition in the UK (37%) than in the US (32%).
In terms of specific technologies, one in five (21%) said they would most like to shop via a screen of some sort, while one in 10 said they would prefer to use a voice assistant. VR and AR were top of the class for 8% and automated re-ordering via machines for 6%. One in five (22%) said they were excited by the prospect of using a VR headset to virtually visit their favourite stores.
So it seems that, in preparing for the shoppers of tomorrow, brands and retailers will have to continue their journeys towards multi-channel diversification, adopting new technologies to deliver an ever-growing range of touchpoints and experiences for young shoppers. But it would be wrong to see this as an entirely digital journey. One of the most fascinating findings of our Generation Alpha survey is just how important the in-store shopping experience remains for today’s children.
Physical retail is an experience that Alphas enjoy
Three-quarters (76%) said they liked going into an actual shop, with almost as many (74%) saying they would like to be able to find the same products online and in store. Only 13% said they would like a future where everything could be bought online without the need to go to shops.
But most tellingly of all, going to a physical shop came out second only to using a screen as the most popular preference for shopping in the future, mentioned by 19% of our survey participants. We saw a clear gender gap here, with 22% of girls saying they’d most like to shop in-store in the future compared to 15% of boys, who seem more keen on their tech. There were similar gaps between young teens (25%) and mini-Alphas (16%), and between children in the US (21%) and the UK (17%).
Overall, the key takeaway for brands and retailers would be that any sounding of the death knell for in-store retail seems very premature indeed. In our Future Shopper 2019 report, we found that half of digital shoppers (48%) prefer to shop with brands that have both a physical store and an online presence, while 70% said they liked to research purchases online before going into a store to buy a product. With three-quarters of under-16s saying they enjoy ‘going shopping’ in the traditional sense, and a quarter of young teens saying they expected to shop mainly in store when they reached adulthood, brands and retailers should be thinking in terms of consolidating and improving their in-store offers in conjunction with their digital channels, not replacing them. (By the way, here’s a report we wrote on this very subject).
From fast delivery to freebies
Finally, order fulfilment is something that really matters to today’s youngsters. As mentioned, they are the first generation that have grown up viewing home delivery as anything like on a par with going to a shop yourself and buying something there and then. And what is clear is that the speed with which they get their products really matters to youngsters.
An overwhelming majority (83%) said they wished goods would arrive more quickly after they had been ordered, and a third (32%) said if they could change anything about shopping online, it would be to have all orders delivered within two hours. What can perhaps be inferred here is that youngsters, having grown up with online ordering and shopping in store existing in parallel, would like to blur the distinctions between the two, for example by combining the convenience of digital shopping with the immediacy of buying it in person.
Tellingly, a third of our respondents told us that they lose interest in items if they cannot have them immediately. Where possible, more than half (57%) said they would prefer to download a product than have to wait for a physical item to be delivered. Digital technology has put so much right at our fingertips, there to access in the moment through our various devices, that it makes sense that the first generation of digital natives should grow up with little inclination towards waiting. This is a challenge digital commerce will have to resolve one way or another.
If the modern youngster has high expectations over fulfilment, these are mirrored in how they view other aspects of the customer experience, too. On product discovery, they show a similar impatience for anything that is too difficult to find. Two thirds (64%) told us they would prefer it if products were easier to find online. This is an opportunity for the ongoing development of AI-driven commerce. And in terms of service, Generation Alpha sees incentives as a big motivation to shop with a certain brand or retailer - 30% said the biggest thing they would change is retailers sending them things for free, even if they hadn’t asked for them.
In short, tomorrow’s consumers want it all, and they want it now.
Want to explore this further?
If you’d like to discuss any of the themes raised in this article, you can connect with our specialist eCommerce experts. Simply fill in the form here. Alternatively, for information on our services to help you connect with this new wave of consumers, visit our Services page.
A note about the report “Generation Alpha” by Wunderman Thompson Commerce
Research for this report was conducted by independent research consultancy Censuswide. A total of 4,003 children aged between 6-16 were interviewed online during July 2019; 2,002 in the UK and 2,001 in the US.