HOW AND WHERE YOUNG CONSUMERS ARE SHOPPING
CONTENTS
Gen Z is steadily coming of age, with growing purchasing power and interests that diverge from older generations. Across five different surveys studying more than 5,000 multi-generational respondents, Tinuiti has learned a lot about what Gen Zers want in 2023 and beyond. Here we unpack some of the key takeaways surrounding this up-and-coming generation using data from across the surveys, conducted between February and April 2023.
Social Media Drives Gen Z Product Discovery, Especially TikTok
When it comes to discovering new CPG products that they later went on to purchase, Gen Z is most likely to credit social media as the channel through which they first saw or heard about products across the beauty, food and beverage, and over-the-counter (OTC) health categories. By comparison, Boomers were most likely to choose television across all three categories.
Where do you recall seeing or hearing about a new product that you later went on to purchase in the past year? Share selecting social media or television for each product category.
A similar disparity in generational preferences surfaces when zooming in on which social platform respondents said they were most likely to discover new products on. TikTok won out across CPG product categories for Gen Zers, but Facebook reigned supreme for Boomers. Instagram was the second-most influential social media platform for Gen Z product discovery.
On which social media platform do you most often discover new products? (Average across beauty, food and beverage, and OTC health)
Gen Zers are naturally much more likely to use TikTok than older generations, with 64% of Gen Z daily internet users saying they use it at least monthly, by far the highest share of any generation studied. Greater use of TikTok has also instilled a greater sense of trust in the platform for Gen Zers, as 13% chose it as the social platform they most trust to protect online consumer privacy, compared to just 3% of Boomers.
Share of daily internet users who:
Within social media, influencers are a key part of how Gen Zers find new products that they later go on to buy. Among beauty, food and beverage, and OTC health shoppers, more than ¾ of Gen Z respondents recalled buying a product in the last year based on the recommendation of an online influencer, far outpacing other generations. In the case of beauty and food and beverage products, that share was more than 85%. As such, influencer marketing is a hugely important channel for reaching new Gen Z customers.
Share of Gen Z shoppers who have bought products based on the recommendation of an online influencer in the past year.
Gen Zers Much More Likely to Use QR Codes and Social Media for Research
When it comes to researching online for everyday essential products, Gen Z is most likely to first turn to Amazon and Walmart, much like other generations. However, the relative popularity of Target among Gen Z is stronger than other generations, with 12% on average selecting it as the place they’d most likely start an online product search across the three CPG categories studied.
Online, which website or app are you most likely to start a CPG product search on? (Average across beauty, food and beverage, and OTC health)
CPG shoppers often research products while they’re shopping in-store. Gen Zers were fairly similar to other generations when it comes to searching for products on search engines like Google or Bing while in-store, but were much more likely to search for the brand or product on social media. Gen Z was also more likely to use QR codes to learn more about CPG products while in-store.
Which of the following actions have you taken in-store to learn more about a CPG product? (Average across beauty, food and beverage, and OTC health)
In terms of what Gen Z is looking for when researching products, at least part of the answer is centered on the values and beliefs of the brands they’re considering. 74% of Gen Z CPG shoppers across all three product categories studied said that the values and beliefs of CPG brands were at least moderately important to deciding which products to purchase, the highest share of any generation.
Share of each generation that say that the beliefs or values of a CPG brand are at least moderately important to their decision to purchase its products. (Average across beauty, food and beverage, and OTC health)
Aside from being more interested in the values and beliefs of brands, Gen Z also has unique preferences when it comes to which aspects of product detail pages (PDP) they find most useful. Gen Zers far outpaced Boomers in identifying photos and videos as PDP features they find among the most helpful when deciding whether or not to purchase CPG products.
Which features of product detail pages do you find most helpful when deciding whether or not to purchase a CPG product online? Select all that apply. (Average across beauty, food and beverage, and OTC health)
Gen Z Wants Relevant Ads, and Will Allow Tracking to Get Them
When asked what kinds of ads they would prefer to see for CPG products, Gen Z was the least likely to select ads that appealed to the most people, and instead showed relatively strong preferences for ads that were personalized based on past actions or for offers that were created to appeal to people with similar demographics or interests. As such, effective Gen Z marketing requires strong targeting combined with tailored creative, even as changes in online tracking and targeting aimed at protecting consumer privacy make it more difficult over time.
If you had to see an ad for CPG products online, which of the following would be your preference?
Luckily for marketers, there is reason to believe that Gen Z is more likely than older generations to opt in to tracking when presented with prompts like Apple’s App Tracking Transparency (ATT). Gen Zers were three times as likely as Boomers to prefer to allow tracking to receive more relevant ads when using online news and media sites, rather than opt out of tracking and receive less relevant ads.
Would you rather opt out of tracking that advertisers use to target ads – and receive less relevant ads – or allow tracking and receive more relevant ads when using online news and media platforms?
This comfort with personalization appears to also affect how likely Gen Zers are to take some actions to protect their online privacy which could interfere with advertising. Gen Z was less likely than older generations to clear browser cookies or use ad blockers, though they were more likely than older cohorts to deploy a VPN.
Have you ever done any of the following for privacy reasons? Select all that apply.
Much like other generations, Gen Z respondents chose email as the channel through which they’re most comfortable receiving personalized messaging from businesses that they’ve interacted with before. That said, Gen Z was much more open than older generations to receiving personalized messaging in other key channels like text messages and social apps/websites, and marketers should make sure they’re taking advantage of these communications in addition to strong email strategy to ensure they’re effectively speaking to Gen Z customers.
In which of the following environments would you feel comfortable receiving personalized promotional messaging from businesses that you've interacted with before? Select all that apply.
Both in Store and Online, Gen Z’s Purchase Preferences Stand Out
When it comes to purchasing everyday essentials, Gen Z was more likely to buy in-store than online, much like other generations. But the specifics of their preferences meaningfully stood out compared to older cohorts.
For beauty products, Gen Z was less likely than Boomers to make purchases at big-box stores like Target or Walmart, and were more than twice as likely to buy from beauty stores like Sephora or Ulta. Looking at food and beverage purchases, Gen Zers were nearly four times as likely as Boomers to use a delivery service like Instacart or GoPuff. Fewer than 60% of Gen Z said they make food and beverage purchases at grocery stores, compared to more than 70% of every other generation. And for over-the-counter health purchases, Gen Z was more likely than any other generation to buy these products at a grocery store or online from a large retailer like Walmart or Amazon.
In the past month, where have you bought the following product types?
Looking at food and beverage purchases, Gen Zers were nearly four times as likely as Boomers to use a delivery service like Instacart or GoPuff. Fewer than 60% of Gen Z said they make food and beverage purchases at grocery stores, compared to more than 70% of every other generation. And for over-the-counter health purchases, Gen Z was more likely than any other generation to buy these products at a grocery store or online from a large retailer like Walmart or Amazon.
Zooming in on which website/app respondents chose as the most likely destination for online purchases, Amazon and Walmart were tops across generations. However, Gen Zers were more likely to select Target than any other age group across beauty, food and beverage, and OTC health products.
Which website or app are you most likely to complete a CPG product purchase on? (Average across beauty, food and beverage, and OTC health)
Deal days are a big enticement for Gen Z shoppers, and just 14% of Gen Z Prime members said that Prime Day was not at all important to their decision to be an Amazon Prime member, the lowest of any generation. 61% of Gen Z Prime members say that Prime Day is a better opportunity for shopping on Amazon than Black Friday and/or Cyber Monday.
How important is Prime Day to your decision of whether or not to be an Amazon Prime member?
61% of Gen Z respondents consider Prime Day to be a better opportunity for shopping on Amazon than Black Friday and/or Cyber Monday.
61% of Gen Z respondents consider Prime Day to be a better opportunity for shopping on Amazon than Black Friday and/or Cyber Monday.
Inflation Drove Up Gen Z Loyalty Membership, but Keeping Them Loyal Isn’t All About Discounts
Gen Zers are frequent participants of loyalty programs, with at least ¾ of those studied across beauty, food and beverage, and OTC health surveys saying they’ve joined at least one loyalty program. Gen Z was also among the most likely respondents to say that they’re part of at least four CPG-related loyalty programs.
Including grocery store and similar rewards programs, how many different loyalty programs do you belong to related to your CPG purchases? (Average across beauty, food and beverage, and OTC health)
At least part of the appeal of loyalty programs for Gen Z stems from the effects of inflation over the last couple of years. On average across all three CPG product categories studied, 28% of Gen Zers said they had joined more loyalty programs to get special offers or discounts as a result of product price inflation, the highest of any generation.
Share who have joined more loyalty programs due to CPG product price inflation (Average across beauty, food and beverage, and OTC health)
That said, discounts aren’t the only thing that appeals to Gen Z when it comes to loyalty program perks. Gen Zers were more likely than any other generation to say that early access to new products is the loyalty program feature they find most valuable, and were also the most likely to choose the chance to win a large prize as the most valuable feature. As such, brands should look beyond just discounting strategy when it comes to keeping Gen Z loyalty members happy.
What feature of a CPG product loyalty program would you find most valuable?
When it comes to attracting new loyalty members, only 10% of Gen Zers said they wouldn’t provide an app or website with an email address in exchange for rewards.The two most attractive perks to Gen Z were free shipping and coupons/discount codes, with 64% of Gen Z respondents selecting one of these two options as the benefits they’d most likely provide an email address for.
For which benefit or perk would you be most likely to provide an app or website with your email address?
Brand social accounts are another way to communicate with loyal Gen Z customers, and Gen Zers were more likely than any other generation to say they follow brands on social media across beauty, food and beverage, and OTC health products. Gen Zers were most likely to follow food and beverage brands because they’re entertaining, but were most likely to follow beauty brands to hear when new products come out.