Survival Guide to the Future Retail Environment
Before understanding the future of retailing, we must first know who tomorrow’s shoppers are. By 2030, the new Generation Z is expected to take over from the Millennials and Generation X as heads of households. You may wonder, how exactly are Generation Z different to Millennials and Generation X? The simple answer would be that Gen Z are those born between 1980 and 1995, while Millennials and Gen X are those born before that.
A whole new world for tomorrow’s shoppers
Here are several key traits that define Generation Z – our future customers. Firstly, they live and breathe technology and can handle many screens at the same time, here at Euromonitor International we call them “Digital Natives”.
Secondly, they live in a society that embraces individualism and are keen on doing things their own way. Tomorrow’s shoppers are also pragmatic, as they are more realistic and mindful of financial issues in a world where living costs are constantly rising. As interracial marriages reach an all-time high, we learn that this future generation is more open minded than ever in tolerating and accepting diversity.
Finally, being socially responsible is another factor that defines Generation Z as, according to Euromonitor International’s lifestyle survey, 28% of 15- to 29-year-old shoppers are inclined towards buying eco and ethically conscious products to make the world a better place.
Major shifts in future households and consumption patterns
Let’s take things a step further and think about the types of families Generation Z is likely to form. With tomorrow’s shoppers likely to postpone starting their own family and prioritise personal interests such as education and career, they are bound to be more mature homemakers. As gender roles and stereotypes begin to fade, retailers are expected to cater to a much larger and unconventional audience base.
Let’s forget about the picture of Mum, Dad, and two kids, Generation Z’s families are multicultural and not necessarily heterosexual. Brands really need to avoid any sort of clichéd advertising as there will be more than one decision-maker in the household. Now, as a result of COVID-19, we are also expecting to see the cocooning trend to grow much quicker. Home is the new hub – for work, for socialising and for entertainment. Despite their young age, Generation Z is already starting to save up in order to purchase comfortable and smart homes.
Digital transformation goes beyond the device
So, what are some of the key implications for retailers? The application of technologies in a smart way to address tomorrow’s shoppers will help to equip companies for the future. Up until now, most of the digital revolution was focused on the device, yet, for the next few years, we expect the device to fade and the intelligent assistant to lead the way, according to Google’s CEO Sundar Pichai.
Let’s think about Alexa in the US or XiaoAI in China as examples, moving forward it will be more than just Amazon Echo, but rather the core technology driving it. We’re already seeing Alexa being integrated into smart amenities in the home, such as doorbells, lights, and locks. As for XiaoAI, we are seeing it transform into a type of computer mouse with a built-in intelligent assistant, microphone, and speaker.
In the report and upcoming presentation on “Shopping Reinvented: How the Retailing Industry Can Safeguard its Future in the Decade Ahead” at Retail Asia Conference & Expo, we will dive deeper and use examples to illustrate how today’s retailers are creating advertising campaigns to reach tomorrow’s customers. We will also look at how brands apply digital technologies to cater to the unique core values of future homemakers in order to create long-term value and embrace the sharing economy.