SheerID, the global leader in identity verification for commerce, announced the findings of a survey of Gen Z consumers. Fielded by Centiment on behalf of SheerID, the survey sought to gauge Gen Z’s feelings on the economy, better understand their purchasing preferences and discover how brands can meet the current needs of this influential cohort. The survey also explored the role that exclusive offers and rewards play in driving shopping behavior. Respondents included a total of 1,761 people aged 18 to 26 (“Gen Z”) from the United States and the United Kingdom, half of whom are currently enrolled university students. The survey was fielded between March 1 and March 14, 2024.
Worries about the economy impact Gen Z spending
Despite recent reports about improving economic conditions, just 30% of Gen Z consumers are optimistic about where the economy is headed relative to a year ago. As a result, Gen Z is shopping with increased frugality. Gen Z college students have an even dimmer view of the economy with just 22% stating they’re optimistic about the future of the economy while 71% plan to actively stretch their budgets and seek discounts.
When asked how the current economy has changed their spending habits, groceries and mobile phone/wireless were the only two categories where Gen Z is spending more than they have in the past. Take-out/food delivery, gaming, electronics, and online news experienced the greatest pullback in spending, with 36% or more of Gen Z saying they are spending less in these categories.
What makes a brand stand out from its competitors
The survey also asked Gen Z how a retail brand can get their attention in the current economy. Strikingly, 91% of Gen Z college students reported they research exclusive brand discounts before making a purchase, indicating that brands that invest in this approach will generate revenue growth. In addition, 86% of college students and 69% of Gen Z overall indicated an exclusive offer would increase the likelihood of a purchase. Exclusive offers outperformed other tactics to drive purchasing such as: buy-now-pay-later financing, longer return times, and better customer service.
How Gen Z learns about new brands
The number one way in which Gen Z is choosing their preferred brands is through social media with 68% of Gen Z and 77% of Gen Z college students learning about a new brand through platforms such as Instagram, TikTok and Snapchat. Gen Z also relies heavily on the recommendations from people in their respective communities – a.k.a. word-of -mouth – with nearly half of Gen Z college students hearing about new brands through a recommendation from a friend or family member.
How exclusivity drives purchase behavior and loyalty among Gen Z
29% of Gen Z and 40% of Gen Z college students said they would switch their loyalty from one brand to another, if they were given an exclusive discount. And, 68% of Gen Z and 73% of Gen Z college students would be more likely to join a loyalty program in exchange for receiving a discount. 56% of Gen Z and 73% of Gen Z college students also stated that they feel more emotionally connected to brands that give them an exclusive offer.
The types of offers that generate interest from Gen Z
More than 40% of those surveyed said they like both an “occasional 20% discount” and “10% off every purchase.” However, Gen Z was most attracted to freebies. When asked what kind of exclusive offer would be appealing, 52% said a free gift and 60% stated free shipping drive their decisions to buy.
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