Navigating the Generational Shifts in Consumer Behaviour

Gen Z, the first generation to be digital natives and the newest consumer, is turning retail on its head. In its latest edition of Retail Compass, international law firm RPC, takes a closer look at how the priorities of Gen Zers, a third of the global population, are shaping retail and consumer offerings.

Partner and Commercial Group Head of RPC, Jeremy Drew remarks: "As Gen Z emerges as a dominant force in the retail landscape, we're witnessing a seismic shift in consumer behaviour, but as always with opportunities, there are challenges. As part of our commitment to helping retailers and consumer brands navigate these generational shifts, all the while safeguarding reputations and consumer trust, Retail Compass provides an overview of what's hot now, and what to watch on the horizon."

• European Gen Zs lead the trend in purchasing pre-loved items, with 32% of their clothing being second-hand¹, driving a £7bn market in the UK alone². While luxury brands embrace recommerce, challenges arise in authenticity and brand reputation, evident in Chanel's dispute with resellers purporting to sell genuine Chanel goods which were in fact counterfeit, thereby misusing the Chanel brand. The Rise of Recommerce underscores the importance of prioritising authentication processes and partnerships to mitigate such risks. 
  
  
• By 2025, online transactions are projected to account for 20% of global luxury sales³, while a staggering 92% of Gen Z consumers⁴ already make app purchases frequently or occasionally. However, as brands accumulate vast amounts of consumer data, they become prime targets for cybercrime. In 2023 32% of retailers reported cyber breaches, compounded by the increasing use of AI by criminals and supply chain vulnerabilities like CTS and MOVEit. Retailers should look to enhance security measures to counter these evolving risks.
  
  • Gen Zers are more focused on their physical and mental health, driving the rise of the NoLo movement. In response to the growth of the sector, the ASA announced new rules and guidance on the advertising of alcohol alternatives. The rationale is that the advertising of NoLo beverages often use imagery redolent of alcohol and refers to drinking occasions despite the limited alcohol content in the products and can inadvertently promote the alcoholic product, thereby bringing the campaign within the scope of the advertising restrictions on alcoholic drinks.

Emerging generations are also driving change in the workplace with employers levelling up their diversity and inclusivity, 63% of workers would choose a company that prioritises DE&I over one that doesn’t⁵ . Drew adds: "It's this desire to support and work for brands that match their values that is one of the drivers for companies to manage their environmental footprint and stand up for, and do what's right."

The spring edition of Retail Compass addresses these challenges as well as what's happening at a governmental and regulatory level that will impact financial performance, compliance and future-proofing businesses for sustainable success. 

1. Amazon EU
2. Barclays Bank
3. McKinsey
4. BigCommerce
5. EY