Gen Z and millennials are more willing to bypass traditional retail channels: Report

COVID-19 has transformed consumer behaviours and preferences, with Gen Z and millennial shoppers now more likely to order products directly from brands, while three-quarters of all shoppers expect to have significant interactions with physical stores once the pandemic subsides, according to “What Matters to Today’s Consumer” report by Capgemini Research Institute.

Why it matters

Most consumers who have bought directly from brands cite a better buying experience and access to brand loyalty programs, and are willing to share their data in return for these benefits, amid the growing importance of delivery and fulfilment services in the health and beauty, and grocery segments.

Key insights

• More than two-thirds (68%) of Gen Z and over half (58%) of millennials have ordered products directly from brands in the past six months, versus 41% on average across all age groups.
• Only 37% of Gen X and 21% of baby boomer shoppers have ordered directly from a brand in the last six months.
• Almost two-thirds (60%) cite a better buying experience as a reason for purchasing directly and 59% cite access to brand loyalty programs.
• In return, 45% of all shoppers say they are willing to share data on how they consume products and 39% say they are willing to share personal data and product preferences.
• But 54% of all shoppers say that offers, deals and/or discounts would make it more likely for them to share their data directly with brands.
• 72% of all shoppers expect significant interactions with physical stores post-pandemic from 60% pre-COVID, with Boomers most likely to interact in-store (76%) and Gen Z least likely (66%).
• With convenience remaining a key priority for consumers, delivery and fulfilment are increasingly being transformed from a cost centre to a growth driver for many organisations.
• In the health and beauty and grocery segments, shoppers place greater importance on delivery and fulfilment than in-store experiences.
• This is especially true for groceries shoppers across all age groups, where 42% of shoppers say delivery and fulfilment are the most important service attributes.
• Convenience of delivery is a major factor that can push shoppers to try new and emerging models of shopping, with 47% who bought via subscription services doing so for the convenience of home delivery.

Quote

“Younger consumers’ willingness to go straight to brands when purchasing goods presents a real opportunity for consumer product companies. This enables them to collect consumer data and helps create a more mature direct-to-consumer channel. Being data-powered enables the consumer product and retail organisations to translate supply and demand trends into intelligent decisions on where best to stock their products, customise products and services, and enhance customer experience.” – Tim Bridges, global sector lead, consumer products, retail and distribution, Capgemini.

Background

The Capgemini report surveyed over 10,000 consumers over the age of 18 in 10 countries – Australia, Canada, France, Germany, Italy, Netherlands, Spain, Sweden, the UK and the US.