Retailers seeking to capitalise on the growing influence of younger consumers must emphasise their sustainability credentials and social media engagement, according to a new report by leading data and analytics company GlobalData.
The report: Demographics in Retail and Apparel, highlights the distinct expectations of Gen Z and Gen Alpha consumers, particularly in the apparel and health and beauty sectors.
These younger generations are increasingly influenced by product sustainability and social media engagement when making purchasing decisions.
“Younger consumers, particularly Gen Alpha, discover brands online first via social media and expect a personalised shopping journey," said Oliver Maddison, retail analyst at GlobalData.
"This leads them to favour premium retailers such as BIRKENSTOCK and Space NK, especially in apparel and health and beauty where purchases are more personal.”
The report also explores the 'Sephora Kid' phenomenon, where premium health and beauty products have gained popularity among under-14s due to influencer marketing on platforms such as TikTok.
Brands such as Glow Recipe and Bubble have successfully catered to this market with fun and colourful packaging, demonstrating the significant buying power of Gen Alpha, both through their own pocket money and parental spending.
Sustainability is another key driver for younger consumers, particularly Gen Z.
GlobalData's How People Shop survey found that sustainability is the second most important factor for buying second-hand clothing and footwear, after price.
Retailers must prioritise their sustainability credentials to capture spending from this demographic.
To address this demand for sustainability, many retailers have launched their own second-hand offerings.
IKEA, for example, has introduced its Preowned platform in Spain and Norway and plans to expand it globally in December this year.
While sustainability and social media engagement are crucial, price remains a significant factor for all consumers.
“There is nonetheless more to Gens Alpha and Z than just these two key motivations," added Maddison.
"Younger consumers are, like everyone else, motivated by price, which can be seen in the success of Shein amongst the youngest UK consumers - 52.6% of 16-24-year-olds ordered from abroad in the year to October 2023, of which 40.8% bought from Shein.”
