Klarna has released new research into consumers’ shopper behaviour – specifically amongst the Gen Z and Millennial generations in the US. The research surveyed more than 1000 consumers, finding that people of all ages value seamless, personalized, and flexible shopping experiences. Let’s go through some of the insights that merchants need to consider to optimize their e-store.
Millennials and Gen Z are spending big online
- US shoppers buy clothes and accessories online on average of 10 times a year. But this is much higher for younger shoppers at 18 times per year for 16-24-year-olds and 14 times for 25-35-year-olds. This compares to just 8 times a year for those over 55.
- Nearly a quarter (23%) of 16-24-year-old shoppers admit to shopping online for fashion and accessories 1 to 3 times per month.
- People buy clothes or accessories online as a gift for someone else an average of 6 times per year, rising to 9 times for 16-24-year-olds.
Letting customers try before they buy could encourage higher online spend
Shoppers are clearly making a lot of fashion and accessories purchases online, but this has meant they miss being able to touch, feel and see what they look like in reality before committing to buying. Online retailers could be losing sales to High Street stores unless they make it easier for shoppers to see and try products:
- Almost half (46%) of US shoppers say they like to touch and try items before they buy them, so they will tend to buy more expensive items in store so they can do this.
- A third (29%) of shoppers prefer to browse for a new purchase online and then actually buy it in store. Interestingly, this is highest amongst about 16-24-year-olds at 43%.
- 42% say having the opportunity to try an item and decide if they want to keep it before having to pay would make online shopping a better experience for them.
- Nearly a third (29%) said an easier mobile/online browsing experience would make shopping for clothes easier so they can clearly see clothes and accessories.
Solution: Sitting room to fitting room, using things like Pay later will help customers see their items in reality (just like visiting a store) before they buy.
Consumers love luxe and payment flexibility to support this
US shoppers like buying high-end, but retailers need to think about removing some of the barriers that prevent consumers from buying from their favourite designers or more expensive ‘treat’ fashion items. Have more flexible payment methods would help shoppers buy higher ticket items and could be the difference between them choosing to shop with another retailer:
- A quarter of shoppers (25%) favour luxury or well-made, more expensive fashion or accessories over cheaper fast-fashion.
- But, nearly a quarter of shoppers (23%) say they have to save for several months before they can buy a fashion item. This is highest amongst gen z and millennials at 35% and 30% respectively.
- And nearly a quarter (22%) say they struggle to afford the latest trends and would like the option to pay in installments or later to counter this – increasing to 37% of 16-24-year-olds and 30% of 25-34-year-olds.
- A third said having the option to pay for their online fashion purchases in four equal payments would help them matter manage their finance and a quarter (24%) said it would mean they could buy more high-end products they wouldn’t usually afford. A fifth (21%) said it would allow them to spend more.
- 12% said a lack of flexible payment options would stop them shopping with a retailer again – rising to 25% 16-24-year-olds.
Smoooth process just like every other aspect of their lives
US consumers demand a simple and smoooth online experience when shopping for clothes. Having a standout online/mobile browser, free/simple returns and smoooth checkout might seem like a hard investment to justify but not having these things will damage retailers’ bottom lines:
- The top reasons for US shoppers abandoning a clothes purchase online are; the retailer not having a good returns policy (36%), the checkout process taking too long (31%) and not wanting to enter their payment details in public (19%).
- 61% say a bad website functionality would stop them off spending with a retailer again.
- Over two-thirds (66%) say a free and easy returns policy is one of the top 2 things that would improve the online shopping experience for them, and
- 53% said a slow and expensive returns experience would stop them shopping with a retailer again.
- A fifth (20%) said not being able to receive deliveries quickly would stop them shopping with a retailer.
- The outside world might tell us that fashion is driven by celebs and high-end fashion, but the average American shopper is more likely to be influenced by items reaching the end of their life-span or seasonal sales:
- Men are frugal fashion spenders, with two-thirds (60%) of men said they are most likely to buy new clothes when an old item wears out and they need to replace it – compared to 52% of women.
- Other reasons US shoppers said they buy new clothes are summer or winter sales (44%) and big events like a work party or wedding (30%).
- High fashion and celebs don’t have as much influence as the industry might think; only 2% say they’ll buy clothes because a celeb/influencer has worn it and only 2% are influenced to buy after fashion week.
…But for younger shoppers, social spending is key
- For the ‘want it now’ Gen Z generation, 25% say they are most influenced to buy when they see an item trending which is likely to sell out, and 26% when they’ve seen something on social media.
- 4% of shoppers have bought something direct through Instagram – rising to 11% of 16-24 year olds. For those that are buying/are influenced to buy through it – a third (31%) are buying 1-3 times per year, with a third of 12-24 year olds buying 4-5 times per year.
- 11% have bought something direct through Facebook – rising to 16% of 16-24 year olds. And a fifth have seen something on there and then bought it from a store/online – rising to 27% of 25-34 year olds and 23% of 35-44 year olds. 41% say they’ve bought something or been inspired to buy something 1-3 times per year.
- Men are more likely to take inspiration on fashion shopping from Twitter, with 28% likely to buy something either direct through it or afterwards on the retailers website 1-3 times per year. Compared to 19% of women.
Bricks and clicks: shoppers still like stores
- Two-fifths of shoppers don’t think that physical stores are old fashioned or dated and 73% think that shopping in-store offers a human experience that can’t be replicated online.
- Only 14% think that shopping in store feels more impersonal than shopping online.
- But, 52% miss the personalised offers and discount codes they get online and 55% think that shopping online is more convenient.
- Consumers want to bring some of the human touches to online shopping – 34% want online chats so they can talk to someone about an item before buying. So retailers need to recreate some of what shoppers love on the high street online and accept that consumer still love physical stores.
Online retailers should be investing for the future
- Shoppers want tech: 49% want technology that takes their measurements so they can be sure something will fit. Nearly a quarter (24%) want augmented reality or VR – the ability to see items without trying them on. Rising to 40% for 16-24 year olds.
- 26% want smart mirrors that make recommendations on what to buy based on what you try on.
- 18% want AI driven personalised offers and recommendations.
- Ethics will be important: 21% want tracking tech do they can see where their item came from and if it is ethical.
Here are some key takeaways from the study: