Department stores and online marketplaces have many things in common – they both cater to multiple verticals, and both aim to be a one-stop-shop for their consumers. As we enter a new era of retail, will they be able to convince Gen Z?
Over the last few years, retailers have faced unprecedented circumstances that made us question what the future of retail would look like. Now, those who weathered the storm are gearing up for the next generation of consumers.
When it comes to Gen Z shopping, one thing is for sure – young consumers love speed and convenience. That’s one of the reasons why department stores and online marketplaces have stood the test of time with Gen Z, because being able to secure products from multiple verticals all in one place is a big bonus for today’s consumer.
But which department stores are set to keep up this momentum as more Gen Zs gain their independent consumer status? John Lewis, Macy’s, Etsy and eBay have all survived the escalated growth of Amazon and the high-street downturn during the pandemic, placing them in good stead to win the hearts of Gen Z consumers going forward.
But how exactly are they doing it? Let’s explore.
Leading with campaign activity – John Lewis
The first John Lewis store was opened in 1864 on Oxford Street, London, and has since expanded to have 35 stores across the UK, concessions in Ireland and Australia, and an online store.
John Lewis is a household name for Gen Zs in the UK. It presents an element of nostalgia for anyone who used to follow their parents around the 3-floor department store in their early years.
In the present day, John Lewis has certainly made an impression on this generation with their campaign activity. The brand’s iconic Christmas ads rival even the Coca Cola Christmas commercial, with its quirky characters and heartfelt choice of music that instantly makes Gen Z’s Spotify playlist. The brand has also boosted its Gen Z marketing via its Freshers campaigns in recent years, with the most recent one involving a university checklist showcasing essential homeware items and affordable storage facilities sold by John Lewis.
It’s a two-prong approach that works well with Gen Z consumers. On one hand, the ubiquitous Christmas adverts are hard for digital natives to ignore – but by targeting young consumers as they return to university, John Lewis avoids being dismissed as “just another” department store brand.
Building loyalty – Macy’s
Long-standing US department store chain, Macy’s, is a favorite among US Gen Z consumers due to its Christmastime extravaganzas. Taylor, a public health nutrition student, told Student Beans: “Macy’s comes to mind when I think of the holidays because they have the most gorgeous trees I’ve ever seen around the store and I know that Macy’s is always there if I need to get something Christmassy.”
For students living in New York, like pre-athletic training student, Christian, the annual Thanksgiving parade, which is hosted by Macy’s, is always one to remember. “You can’t do the holidays without that Macy’s Parade here in New York” he says. “It’s become a huge staple of the festive season – some people wait by the railings before the sun comes up just to get a good view of the full parade.”
Macy’s annual Believe campaign that benefits the Make-A-Wish foundation around the holidays is another initiative that taps into Gen Z’s ethics and values; a trait that impacts a lot of their purchasing decisions and brand loyalties.
As well as its efforts around the holiday season, Macy’s has also implemented a year-round loyalty program called Star Rewards, where members earn on every purchase and gain benefits like special perks, savings and surprises. As a financially sensible generation that enjoys gamification and exclusive deals, Gen Z is the ultimate target market for this initiative.
Tapping into personalization – Etsy
Specializing in vintage and handmade items, shoppers can make, sell, buy and collect items via online marketplace, Etsy. Its niche in cute crafts and vintage goods has made the brand a go-to for Gen Zs looking to find the perfect gift for their loved ones, or a treat for themselves. Alyssa, a physical therapy student from Kentucky, explains: “I love Etsy. I think it’s a great platform that supports small businesses. It’s more personal, meaningful, and it’s high quality.”
Our research shows that Gen Z consumers are becoming more and more interested in buying products that are sustainable and personal. Last Black Friday, almost half of the students we surveyed said they are prioritizing products with personalization. A further 44% listed sustainability as a top priority when making purchases throughout Cyber Week and the holiday period.
Resale, a growing market for Gen Z – eBay
We know Gen Zs as a financially-savvy generation. As a buying and selling platform that taps into this key Gen Z characteristic, eBay has become a top contender for young consumers across a number of sectors – especially within fashion.
In fact, according to eBay’s ‘Recommerce Report’, Gen Z drove global sales of its second-hand fashion last year, putting eBay in good stead for the year ahead.
eBay’s targeted marketing has helped build its appeal to the Gen Z demographic. Just last year, the brand launched new tools such as modernized interfacing and personalized shopping algorithms within the collectibles and sneaker categories, with an aim to drive more business with Gen Z buyers and sellers.
Research by Cowen reveals that the online resale market is set to reach $23 billion by 2023. According to eBay’s recent survey, Gen Zs are at the very heart of this growth. So, with the resale space set to become an even massive hit with Gen Z going forward, now is an exciting time for contenders within this space – but knowing what creates a winning strategy will be the key to success.
The bottom line
Department stores and online marketplaces have a huge role to play within the changing retail landscape; Gen Z shopping is already being influenced thanks to the convenience and slick user journey of online marketplaces, combined with the brand narrative and consumer-focused experience of department stores.
All of these elements speak to the potential they both have to win big with the next generation of consumers. But in order to maintain a solid momentum with young consumers in 2022 and beyond, department stores and online marketplaces can learn from each other to really embrace the ‘phygital’ retail experience being led by Gen Z digital natives, and to boost their overall Gen Z strategy.
Retail is changing – and it’s all at the hands of Gen Z consumers. Understand how your brand can win the hearts of this demographic today.
