5-minute read

When it comes to winning over Gen Z adults and younger Millennials (born between 1997-2012 and 1990-1997 respectively), should retailers be considering ways to take the ‘invisible’ customer experience (CX) further? Consumers are searching for moments of magic when shopping, but when responding to their needs, retailers need to balance fun with digital and payment safety.

Great CX: balancing ‘wow’ moments

Where delighting Gen Z and younger Millennials are concerned, it’s important to note that ‘wow’ moments must be balanced with practicality and reassurance alongside safety, or retailers risk quickly losing trust. Our research of 500 individuals from this audience found that 62% feel safest shopping in-store, 36% online, and just 2% feel safe shopping via social media.¹

While digital approaches – including augmented reality (AR), virtual reality (VR) and social commerce (purchasing via social media channels) – may be great ways to engage the audience, there are reservations about remaining on board with these experiences through to the point of transaction. Payment safety is a key factor, as with only 10% wanting the option to buy via a social media channel, variety and convenience is crucial.¹ Offering a preferred way to pay – e.g. digital wallets or buy-now-pay-later (BNPL) – is important for 12% in encouraging them to shop with a particular retailer.¹

Ready to be immersed

Despite being somewhat cautious, this audience doesn’t need convincing about immersive brand experiences. Data proves they are not only open to them (27% expect to engage with a retailer in the metaverse over the next 12 months)¹ but are actively seeking them out.

The metaverse allows retailers to build complex and engaging digital worlds that shape consumers’ experience of a brand, from virtual stores to digital catwalks where shoppers can ‘model’ clothes. However, its reliance on consumers owning appropriate hardware, such as VR headsets, can be limiting. Although, simpler, yet still high-tech, approaches are also likely to engage these audiences using the technology they carry in their pockets.

AR – the ability to bring digital elements into the real world through smartphones and other digital devices – has been used effectively in retail for some time now, but Gen Z and young Millennial audiences show no signs of fatigue. The audience desires an enhanced experience, but also indicates the need for retailers to offer variety and use digital solutions as a means of showing product depth, where physically showcasing a full range isn’t possible.

Blending in-store and digital immersion

Kirsty Morris, MD of Client Experience and Market Development, Barclays Transaction Banking, highlights how there is a need to “recognise that successful strategies for enhancing the shopping experience will blend the physical and digital world seamlessly”. With 11% of 18 – 34-year-olds agreeing in-store entertainment would encourage them to shop with a particular retailer,¹ and 16%, knowing that a certain portion of a store’s space was devoted to pre-loved or resale items would be a key draw¹– it is clear there is a need for integration.

Gamification for engagement

While integrating game-like elements into the shopping experience adds elements of fun, they also create engaging experiences that could drive sales. For retailers, gamification is only limited by imagination and could play a role in loyalty programmes, customer rewards, and interactive online challenges. For example, beauty retailer Sephora’s ‘Swipe it. Shop it’ campaign took inspiration from the swipe left/right interactivity of dating app, Tinder, with customers swiping to get the look they wanted. This playful element created more than an enjoyable shopping experience. It allowed Sephora to capture deeper insight into customer tastes and preferences.

Personalisation for engagement

Younger consumers also value experiences tailored to their unique preferences and lifestyles. Retailers can harness data analytics and artificial intelligence (AI) to personalise shopping experiences based on what customers say and do. Online styling service ‘Stitch Fix’ stands out as an example of retail personalisation – using an algorithm to create unique clothing recommendations based on customers’ answers to a detailed style quiz and ongoing feedback. When a curated ‘Fix’ arrives on a customer’s doorstep, it blends the personal touch with convenience – perfectly aligned with the needs and aspirations of the audience.

The shopping list for brands

Younger millennials and Gen Z consumers are looking for engaging and immersive retail experiences. They value payment flexibility and safety, and the absence of these can harm a brand's reputation. Retailers have seen positive results using gamification and augmented reality (AR) to delight customers.

Barclaycard Payments is enhancing its end-to-end capabilities to meet the expectations of these consumers for a seamless omnichannel experience. This includes offering flexible payment options, fraud protection, and regulatory support across all touchpoints, from in-store to mobile commerce.

¹Barclaycard-commissioned Maru poll of 500 UK consumers (February 2024).

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