Generation Z and the inescapable future of retail

Posted by Mike Butler on March 15, 2018
Generation Z and the inescapable future of retail

Surviving and thriving in retail is all about anticipating the needs of tomorrow’s consumer.  Which made Ken Hughes’ keynote presentation a perfect fit to kick off this year’s Retail Tomorrow conference.

One of the standouts speakers from Retail Tomorrow’s inaugural event last year was the irrepressible Irishman Ken Hughes: his presentation about “the blue dot” consumer pretty much blew people’s minds as it brought the event to a close.  He proved so popular that he was in fact the one speaker we invited back this year – this time to open our conference, and open our minds.

The main idea of his talk (I never know quite how to refer to Ken’s presentations as he’s one part stand-up comic, one part thought-leadership visionary, one part your cleverest friend who always articulates something better than you can) was that with Millennials having stolen the limelight for so long now, it’s actually time retailers turned the spotlight on the upcoming generation – ‘Generation Z’ – to really get on top of their future strategic planning.  But, as ever with Ken, the presentation included so much more…

The six ages of shopper-kind

While Shakespeare (in the “All the world’s a stage…” speech) identified seven ages of man, modern social commentators have it at six.  That is, the six tranches into which we find it helpful to categorise people:

  • Traditionalists
  • Baby Boomers
  • Generation X
  • Millennials
  • Generation Z
  • Generation Alpha

I’m going to assume that you’re comfortably familiar with the top four categories.  Ken’s focus was on Generation Z (“Gen-Z” to their friends), broadly defined as those born between 1996 and 2009.  In other words, the range that encapsulates most teenagers and students of today, and – which is all-important – those who are just now hitting the workforce for the first time.  In our CIC-driven world (Consumers in Command) it’s instructive to take a close look at Generation Z, both to be able to fulfil their expectations and to build a wider picture of what the future of retail will look like.

The ten pillars of Gen-Z

The Millennials were the generation that ‘switched over’ but Gen-Z are the ones truly native to digital commerce.  Ken proposed ten handy “lenses” through which to think about the Gen-Z cohort, based on what they like, and what they’re like.


Gen-X don’t take for granted the freedoms (economic, cultural and political) that previous generations (the Baby Boomers especially) fought hard for – they expect to defend and extend them.  They are an optimistic generation that see capability and opportunity everywhere.  They will be the first generation to grasp some of the new freedoms enabled by Artificial Intelligence, machine learning and robotics.

For Gen-Z it’s about access to not ownership of things – this is a huge challenge for retailers as things like mortgages and car ownership will be affected as well as much smaller concerns.  Gen-Z have little brand loyalty –which is why Freedom goes hand in hand with …


Gen-Z don’t do contracts, they want things on demand.  Whether it’s a mobile phone deal, a Netflix-type streaming service payable and cancellable monthly, insurance-on-demand or by-the-hour access to personal transport, they want it when they want it, but without having to be tied down.

Taking flexibility on board as a lifestyle choice is igniting many innovative and interesting business models in the retail space.  One example of this is Le Tote, who for around $75 a month will send you a box of clothing items and accessories picked out especially for you.  You can keep as few or as many as you like and return the others no questions asked, only paying for what you choose to keep.


The “sharing economy” is a key tenet of Gen-Z, and one key facet of this is the idea of co-collaboration.  This is a challenging one for retailers (and companies in many other sectors) to get their heads around as Gen-Z’ers expect to be able to collaborate, generate and create with you: Ken Hughes suggested that retailers should think of it as “co-ownership” of their business.


Gen-Z are quite commercially astute and entrepreneurial, and one effect of this is what Ken called the “side hustle” – they have ideas (and maybe business plans) that they expect to be able to work on in their work time.  This is a hugely challenging notion for many employers, but does have an immediate upshot as Gen-Z are very happy to answer work emails at 8pm.

They want and will actively seek out new, and digitally-differentiated ways of doing “old things”.  The seemingly unstoppable rise of dating apps and sites is just one result of this.  Above all they expect a seamless and frictionless journey to purchase.


This one may not be surprising, but it is surprising how many companies (across sectors) are losing out to upstart disruptors through failing to take it on board.  When something is desired, being able to get it instantly is critical- Gen-Z don’t want even to wait for buffering.  Relevant examples in this area include Amazon Instant pick-up and the general drive towards everything being quicker.

One – arguably – negative effect of this is an unprecedented level of impatience.  Gen-Z expect an answer to most things within 10 seconds.  One reason Facebook is dying for them is it’s not instant.


Gen-Z aren’t happy with next-best alternatives.  They’ve been brought up on programming like the “X-Factor” which tells them that “Everyone’s a winner” and everyone can be famous.  YouTube channel runners know they can reach anyone in the world, from their bedroom.  The world is indeed their oyster.  (Ken remarked however on the fact that, as Gen-Z are entering the workforce, companies are seeing 23-year olds who genuinely don’t understand why they can’t have a seat on the Board…)


It would be easy, but rather lazy, to say that Gen-Z have shorter attention spans than previous generations.  More helpful would be to give an example to consider how they think differently about time and responsibility.  Ken Hughes talked of the generation being one of “we’ll get it done, but in our own time and manner”.  What does that mean in practice for the modern workplace?  Consider the idea of project ‘Sprints’ – teams want to do projects with 90-day ends (rather than say 12-month-long, or continual), which they may start slowly and pace themselves for.


Gen-Z are inherently happy and relaxed with the blend of physical and digital worlds.  For retailers this may mainly mean that they are the first “born-omnichannel” generation, and that connected commerce will be their expectation.  Ken also – with a great deal of humour – gave the example of “Skype sex” and said that if people are now happy merging something as intimate as sex, then the phygital world is already a reality.


“The Fear of Missing Out” (FOMO) is a huge driver of the experiential economy.  In a permanently connected digital world of people constantly self-promoting, Gen-Z’ers hate to think there’s anything going on without them.  This is one reason why “pop-ups” are so popular, as people want the new thing, and they want to be the first to be there or first to tell about it.


There was unsurprisingly a lot of talk about personalisation at the conference as a whole this year so it was good to see this had made Ken’s Top Ten.  His point here was that, for how Gen-Z see it, customisation has already gone far beyond a “hygiene factor” and needs to make a real difference to people’s lives.  He gave the example of the new Hilton app which allows you to choose your own hotel room in advance and use your phone to open your door.


Gen-Z can smell manufactured mass-market inauthenticity a mile away.  They want it customised; they want it special, and they want it to be authentic.

Think different

Regardless of what generation we put under the spotlight, the goal for retailers should remain the same – to expect, satisfy, excite and delight their consumers.  But by focusing on the generation reaching maturity right now, one which has synthesised what they see as the best bits of the previous two generations and discarded others, Ken found a way of making us think differently about what the future of retail might really feel like and look like.

As a way of making us both focus on “thinking differently” and also putting ourselves imaginatively in the shoes of someone else (who might be of another generation to us, or who might have a disability which we don’t share) Ken finished by showing this extraordinary video and quite rightly said there shouldn’t now be a dry eye in the house.

That’s two years out of two for Ken Hughes at which he has, if not quite stolen the show at Retail Tomorrow then at least made a memorable impact.  I’ve not ruled out inviting him back next year so he can complete the hat-trick.