Zooming Into The Holidays: 6 Traits To Watch

Millions of young people became adults in 2022, and right now many of them are looking for the perfect gift. How they spend that gifting money is worth unwrapping.

That’s because many of these young consumers, all part of the 68.6 million members of Generation Z, are buying holiday presents for family and friends – some for the first time (and some may be starting before 18). And the choices they make, from the channels they choose to the tools they use, will help to determine the holiday economy.

Gen Z’s behaviors will also provide helpful groundwork for how retailers and brands should prepare for 2023. This holiday shopping season is, essentially, a lab test of how these incoming consumers respond to varying promotions and nascent shopping channels.

So far, some of their traits are surprising retail experts.

Remember, For Many Gen Zers, It’s All New

Makin’ A List Of Z-ehaviors

Gen Zers, also known as Zoomers, can potentially make some of the most influential choices determining this year’s nearly $950 billion holiday spending season. Consider: More than 60% were ready to splurge on holiday shopping for themselves and others way back in October, according to research by McKinsey & Co.

Based on other shopper research and anecdotal observations, Gen Z is making its holiday mark in at least six noteworthy ways.

1. Money is less of a barrier, but discounts still sparkle. Face it, they’re younger and pay fewer bills than older consumers, in part because many Zoomers are not raising kids or even out of college. Nearly one-third of young shoppers said they plan to go into debt to support holiday gift buying, Business Insider reports. Still, 28% of them are strongly motivated by coupons and promotional codes, according to the news outlet Insider Intelligence. Retailers and brands would do well to use language and imagery in their promotions with young shoppers in mind. Zoomers tend to say “fit” rather than “outfit,” for example, W for “win” and “slay” for doing something well, such as “This fit is slay AF, and 30% off – W.”
2. Their shopping is rockin’ round the social scene. Nearly one-third of shoppers aged 18 to 24 start their shopping research on social media, Kristen Classi-Zummo, an apparel industry analyst at the marketing research firm NPD, told CNN. And half of those who use social media go on to spend money on these platforms (Instagram being their top choice), according to Insider Intelligence research. But don’t discount TikTok. In early 2022, 49% of all TikTok users said they purchased a product after seeing it reviewed or promoted on the app, news outlet World Finance reported. One-quarter are getting their gift ideas from livestreaming videos, or real-time shopping events hosted by influencers and celebrities. Dick’s Sporting Goods is among the retailers that have launched such streams this holiday season, with its “Holiday Gift Guide Event” that features fashion experts and one big athlete.
3. But they’re also decking the malls, for social reasons. On Black Friday weekend, Gen Z consumers hit retail malls hard, choosing to make in-store shopping a fun, social activity with friends. For example, some of the strongest anecdotal sales reports came from leading Gen Z brands and department stores, according to major mall operator PREIT. Further, 25% of Gen Zers said they are very likely to shop at a mall sometime this season, more than any other age group. This appears to be a trend: Back in February, nearly half of Gen Z shoppers said they prefer shopping in-store to online, CM Group, an organization of marketing tech companies, found. Retailers would benefit from keeping stock of young shoppers’ favorite brands, which in June included Crocs, Dr. Martens, Nike and Columbia, L.E.K. Consulting reports.
4. They zoom into direct gift ideas. Regardless of their dedication to social platforms, most Gen Zers, if given the choice, would rather shop directly from a brand. Nearly 75% of Gen Z consumers prefer to buy from a brand’s web site, research by SimplictyDx s One year ago, in late 2021, 68% of Gen Z shoppers said they had purchased goods directly from brands within the previous six months, Capgemini Research Institute states. Why? Six in 10 of brand buyers said direct-to-consumer channels deliver a better buying experience, and an equal share cited access to a rewards program as the reason for choosing D2C. These direct sellers, meanwhile, gain cleaner, start-to-finish customer insights that can enable them to resolve potential issues faster.
5. They want to be rewarded for their behavior. One-third of Gen Zers are enrolled in at least one branded reward program, data from YPulse shows. Considering the youngest members of Gen Z are just 10, that figure represents worthy upside potential. So it’s essential that reward program designers include the features relevant to this base. In 2021, for example, 70% of Gen Z consumers belonged to at least one premium (or paid) reward program. This suggests that they perceive greater value and better treatment from a paid service. But it doesn’t have to be high-end – members of the paid Walmart+ fee-based program tend to be younger and more tech-savvy, the company recently reported.
6. For many, gifts are literally in the cards. Gen Z shoppers plan to increase their spending on gift cards by 57% this season, to $290 from $185 in 2021, Payments Journal reports. Merchants that include special incentives on gift card purchases – on their websites, direct communications, social channels and store entrances – will likely sell more of them. Take a tip from Delta Air Lines and Starbucks: They offered members who purchased $250 Delta gift cards free $20 Starbucks gift cards, taking advantage of the their loyalty partnership, launched in October. These gift cards will likely generate added sales: The average consumer spends $59 above the value of their gift cards.

Stock-ing Stuff: Gen Z Can Make The Holidays Brighter

These findings have surprised some experts, but really they shouldn’t be totally unexpected. Retailers and brands have had Gen Z, or a variation of them, on their radar for some time. After all, younger shoppers tend to retain common traits from generation to generation.

What changes is the surroundings that influence them, and the resources available. When retailers focus on these contextual changes, it becomes easier to keep up with the Zoomers. And they should keep up, because next year, a lot more will become adults.

This article originally appeared in Forbes.