How Gen Z is Reshaping the Path to Purchase in Retail and eCommerce

Generation Z is reshaping the retail landscape, transforming the traditional path to purchase into a complex, non-linear journey that challenges brands to adapt their strategies. As reported in an eTail Insights research report on advanced personalization in retail, retailers are increasingly employing unified engagement platforms and creating deeply personalized experiences to meet the unique expectations of this digitally-native generation.

However, the report also found that the personalization systems of most retailers (87%) couldn’t accumulate intelligence over time and then tailor the shopping experience based on billions of data points. This capability will be crucial to meeting the needs of Gen Z customers.

In this article, we explore what the path to purchase looks like for Gen Z customers, as well as how retail and eCommerce organizations can adapt to them.

The Hourglass Marketing Funnel

The traditional marketing funnel, shaped like an upside-down pyramid, has become obsolete over the past several years. The new model is in the shape of an hourglass, both in B2B and B2C contexts. According to a report by Forbes, this model allows retailers to create and maintain more meaningful relationships with customers "beyond the point of sale.”

Importantly, this new model emphasizes the importance of engaging customers not only during the initial stages of discovery but also post-purchase, fostering loyalty and repeat interactions.

This reimagined funnel addresses Gen Z's preference for authenticity and instant gratification, as highlighted by Matthew Tilley of RRD at eTail Boston 2024:

"Gen Z values authenticity, expects instant gratification, and demands social responsibility. They want what they want right now. You need more than just a broad sense of your audience; you need true insight into what they care about.”

By focusing on continuous engagement throughout this hourglass journey, brands can create meaningful connections that resonate deeply with this generation.

The Top of the Hourglass Funnel

At the top of the hourglass, we see a wide opening representing the vast array of touchpoints where Gen Z encounters brands. Unlike previous generations, Gen Z's initial interactions with brands are often through social media platforms, influencer content, and peer recommendations.

This expansive top requires brands to cast a wide net of engaging, authentic content across multiple channels.

The Middle of the Hourglass Funnel

The middle of the hourglass narrows, symbolizing the focused research phase where Gen Z consumers delve deep into product details, compare prices, and seek out user reviews.

It’s critical to create immersive experiences that cater to Gen Z's desire for authenticity and engagement. However, according to eTail Insights’ report on advanced personalization, 71% of retail leaders at the time only agreed somewhat that they could identify the optimal pathway to purchase for every shopping session.

The Bottom of the Hourglass Funnel

The bottom of the hourglass widens again, representing the post-purchase phase where brands must continue to engage and delight customers. The report found that most retailers are somewhat effective at this stage.

For example, according to the advanced personalization report, only 5% said they were very effective at re-engagement messaging, and only 4% said they were very effective at cross-selling and upselling.

To effectively implement this model, retailers must leverage advanced personalization techniques, such as adaptive, personalized content,

Social Media’s Shopping Influence

Social media has become the heartbeat of Gen Z's shopping behavior, serving as a hub for discovery and inspiration. Platforms like Instagram, TikTok, and YouTube are not just entertainment spaces but pivotal points of influence where brands can connect authentically with this generation.

Here are some of the ways social media is reshaping the retail and eCommerce landscape for Gen Z:

• Discovery and Inspiration: Gen Z relies heavily on social platforms for product discovery, with visually driven content on Instagram, TikTok, and Pinterest serving as primary sources of inspiration.
• Influencer Impact: Peer recommendations and influencer partnerships play a crucial role in shaping Gen Z's purchasing decisions, as they value authenticity and relatable content.
• Social Commerce: The rise of in-app shopping features on platforms like Instagram and TikTok has blurred the lines between social browsing and purchasing, creating seamless shopping experiences.
• Community Engagement: Brands that foster active communities on social platforms can create loyal customer bases among Gen Z consumers.
• Real-Time Interaction: Social media enables direct communication between brands and consumers, allowing for immediate feedback and customer service.
• Trend Acceleration: The viral nature of social media content can rapidly propel trends, requiring brands to be agile in their product offerings and marketing strategies.

As Shanna Goldstone, Founder of Pari Passu, noted at eTail Boston 2024, "With the rise of social media and everyone vying for our attention constantly, the table stakes are now so much higher."

This sentiment underscores the need for retailers to create compelling, shareable content that resonates with Gen Z's values and aesthetics.

Gen Z’s Demand for Details

If there’s one aspect of Gen Z consumers that has changed how marketers must engage them is their appetite for detailed information about products and brands as well as real-time, personalized experiences. This generation's demand for specifics goes beyond basic product descriptions, extending to intricate details about materials, manufacturing processes, brand values, and even how products can fit into their unique lifestyles.

Retailers and eCommerce leaders agree. According to the 2024 eTail Insights report "Future Customer Journeys: How Customers Themselves are Driving the Next Big Changes in eCommerce,” most leaders believe that content personalization (84%) and artificial intelligence-crafted digital experiences (77%) are very important to their ability to support the customer journey.

User-Generated Content

User-generated content (UGC) and reviews have become invaluable resources for Gen Z consumers seeking authentic, unfiltered information about products. Retailers are increasingly incorporating UGC into their marketing strategies, recognizing its power to influence purchasing decisions.

According to Forrester Research, across generations, more than half of U.S. adults say they are particularly likely to consult customer reviews for high-consideration purchases, as well as for experiences like dining and travel. Forrester also says consumers trust other consumers’ reviews "for everyday purchases like beauty and skincare products, clothing, and even groceries.”

Value and Price Consciousness

Much of the attraction of UGC is an extension of Gen Z's price consciousness and value-driven mindset. This has led to a more thorough research process before making purchases. This often includes:

• Extensive price comparisons across multiple platforms, including Amazon
• Scrutiny of product specifications and materials
• Investigation into brand ethics and sustainability practices
• Analysis of user reviews and ratings

More Insightful In-Store Experiences

The demand for details extends to the in-store experience as well. Retailers must create physical spaces that offer unique, information-rich experiences that can’t be replicated online.

For example, this could involve interactive displays that allow shoppers to learn about a product’s origin or sustainability credentials or offering personalized consultations with knowledgeable staff who can provide tailored recommendations. By integrating technology like augmented reality or QR codes linked to detailed product information, physical stores can serve as hubs of discovery and engagement, ensuring that customers leave with a sense of satisfaction that goes beyond mere transactions.

Retailers that successfully create these dynamic environments not only draw customers into stores but also foster a deeper emotional connection with their brand.

Creating Infinite Engagement Loops with Gen Z Customers

In conclusion, the traditional linear path to purchase has evolved into an infinite loop for Gen Z consumers, requiring brands to maintain a consistent presence at every stage of the customer journey. This transformation emphasizes the importance of post-purchase interactions and ongoing engagement across multiple channels.

To meet the demands of Gen Z, brands must deliver inspiration at key moments throughout the customer journey. They must create adaptive, personalized content, and an engaging and rewarding post-purchase experience that fosters loyalty in an omnichannel shopping environment.

To learn more about how you can engage Gen Z customers, don’t miss eTail Palm Springs 2025. It’s happening from February 24 to 27 at the JW Marriott Desert Springs, in Palm Springs, CA.

Download the agenda and get tickets today.