Deciphering Online Shopping Behaviors of Generations Y and Z

Reviewers

Dr. Scott Downey and Masie Keshavarz

Article

Determining behavioural differences of Y and Z generational cohorts in online shopping by Durgesh Kumar Agrawal

Source

International Journal of Retail & Distribution Management, Volume 50 Issue 7

Summary

It’s no surprise that consumer buyers have been shifting from shopping at traditional stores to online channels in the past two decades. Online shopping continues to grow, driven particularly by tech-savvy consumers who belong to Y and Z generations. Previous studies have indicated that Gen Y (Millennial) is a very powerful consumer group with huge consumption potential and spending power. On the other hand, the Gen Z group is beginning to make their mark as well.  The next generation of workers and buyers have distinctive ways to research, evaluate, purchase and use products. Therefore, it is critical to understand how Gen Z and Gen Y are behaving differently when it comes to online shopping.

Buying behavior and purchase decisions are driven by utilitarian (practical) and hedonic (pleasure) motives. Utilitarian motives refer to rational thinking and purchase decision making based on instrumental and functional aspects of the product, like quality, service, price and other practical benefits.  While hedonic motives refer to purchase decisions that are non-functional in nature and difficult to justify, often related to personal and social motives such as fun, fantasy, arousal, sensory stimulation, enjoyment, sensory experiences, social attraction, association, interaction and communication.

This study looked at the differences between Gen Z and Gen Y online shopping behaviors and preferences. To do that, the study researchers investigated the actual shopping behaviors and measured the significance of key elements of utilitarian and hedonic motives and associated perceived risks in online shopping.

Based on the study results, Gen Y customers’ online shopping behavior and preferences are primarily driven by utilitarian motives and are listed below.

1. One of the main reasons for Gen Y customers to shop online is “easy information search on attributes of competing products”. This indicates that Gen Y group shop online to make rational purchase decisions by comparing quality, services and prices of products.
2. They also prefer “interaction and communication on social media during shopping journey” to obtain friends and family thoughts and their shopping experiences and incorporate them in their purchase decision making.
3. They like the convenience of “anywhere and any-time shopping” which enables them to save cost of market visit such as time, energy and transportation.
4. The “low and discounted price” of online products is another motivation for them to shop online.
5. They perceive a higher risk in online shopping, specifically financial risk, and prefer to avoid electronic payments.

Gen Z customers’ online shopping behavior and preferences are primarily driven by the personal hedonic motives and are listed below.

1. The “fun, entertainment and enjoyment” motive is one of the main reasons for them to shop online which means they have fun and pleasant time by online browsing, visual cues and visual engagements.
2. Also, they prefer the “unbiased reviews and ratings by previous customers” of the online products which indicates that theyvaluereviewsandratings for afairassessmentofproducts/brands.
3. Gen Z look for e-solutions and convenience for almost everything, thus they like the “easy access to wide product choice” and convenience of “anywhere and any-time shopping” to avoid hassles of driving/travelling, parking and waiting in line.
4. They like to explore the “additional discount/freebies/cash-back offer,” but they are not willing to sacrifice quality for the price.
5. They are not very social in their online journey.
6. They perceive a higher product and performance-related risk in online shopping; hence they do not run after the cheapest product. Regarding finical risk, they feel it is safe and prefer electronic payment for faster transactions.

What does this means for food and agricultural business?

While there are some similarities between Y and Z generational customers, they also have major distinctive online shopping behaviors. Organizations that want to serve these generations need to develop more effective marketing strategies to serve both the cohorts based on their unique characteristics and distinct behaviors.  It’s important to remember that for many agribusinesses, the issue isn’t SELLING online it is helping their buyers SHOP online.

Currently, agribusinesses mostly cater to utilitarian shopping motives, which align with Gen Y online shopping motives. Serving this group means online sellers have to make their websites easy and hassle-free to navigate. Since this group is social and exchanges shopping opinions and experiences on social media, companies may want to ensure their web presence connects with social media platforms to capitalize on Gen Y’s extensive social network for further growth. Millennials are moving into their peak buying years.  While some agribusiness firms have been able to treat their web efforts as an afterthought, it will have to be a core part of the communication strategy within the next ten to fifteen years.

Gen Zs are just beginning to take on shopping roles in agribusiness.  They EXPECT convenience and faster transactions, but they also won’t tolerate experiences that aren’t fun and pleasurable. Often today, farm buyers DON’T HAVE A CHOICE other than to call someone to get goods for their farm.  Online-only sellers in agriculture have struggled, but that doesn’t mean that online SHOPPING paired with trusting relationships isn’t going to own future generations of buyers.  The best marketers will seek to integrate these for Gen Z buyers as their influence grows.  An example might be high-tech virtual events to hangout and discuss the business of farming as they see it.  “Fun, entertainment and recreation” is a high bar, but frankly there aren’t many easy options in today’s competitive ag marketplace.

The implication of this review isn’t that relationships are going away. The message is that agribusinesses can’t ignore the “experience” expectations of newer buyer generations and should begin considering how they will address these differences before they are too late to the party.  And, according to this research, a party may be what Gen Z is looking for.