Gen Z and millennials are increasingly willing to buy directly from brands: Report

More than two-thirds (68%) of Gen Z and over half (58%) of millennials have ordered products directly from brands in the past six months, compared to 41% on average across all age groups. This is according to a new Capgemini Research Institute report, What Matters to Today’s Consumer, which reveals the far-reaching impact of the pandemic on consumer behaviour and preferences. The report also revealed that only 37% percent of Gen X and 21% of boomer shoppers have ordered directly from a brand in the last six months. For those who have bought directly from brands, almost two-thirds (60%) cite a better buying experience as a reason for purchasing directly, and 59% cite access to brand loyalty programs.

Interestingly, almost half (45%) of all shoppers say they are willing to share data on how they consume or use products and more than a third (39%) say they are willing to share personal data such as demographic information or product preferences. However, 54% of all shoppers say that offers, deals, and/or discounts would make it more likely for them to share their data directly with brands.

Younger consumers’ willingness to go straight to brands when purchasing goods presents a real opportunity for consumer product companies, Tim Bridges, global head of consumer goods and retail, Capgemini said. “This enables them to collect consumer data and helps create a more mature direct-to-consumer channel. Being data-powered enables the consumer product and retail organisations to translate supply and demand trends into intelligent decisions on where best to stock their products, customise products and services, and enhance customer experience,” Bridges added further.

According to the report, the surge in e-commerce over the last two years due to safety concerns and the desire to avoid physical stores has now plateaued. The notion that online may replace in-store entirely has been disproven, and the majority of consumers (72%) expect to have significant interactions with physical stores after the pandemic subsides – exceeding pre-Covid numbers (60%). Globally, all age groups expect their level of in-store interactions post-pandemic to be higher than their online interactions. Boomers are the most likely to interact in-store (76%), and Gen Z the least likely (66%).

However, the nature of these interactions is changing as the distinction between online and in-store continues to blur, the report highlighted. For instance, post-pandemic, 22% of shoppers expect to have a high level of interactions with click-and-collect orders. This trend is highest for millennials (33%) and lowest for boomers (11%).

Furthermore, with convenience remaining a key priority for consumers, delivery and fulfillment are increasingly being transformed from a cost center to a growth driver for many organisations. In the health and beauty and grocery segments, shoppers place greater importance on delivery and fulfillment than in-store experiences. This is especially true for groceries shoppers across all age groups, where 42% percent of shoppers say that delivery and fulfillment are the most important service attributes.

The research also highlighted that convenience of delivery is a major factor that can push shoppers to try new and emerging models of shopping. Slightly less than half of consumers (47%) who have purchased products via subscription services do so for the convenience of home delivery. Post-pandemic, 22% of shoppers expect to have a high level of interactions with click-and-collect orders (ordering online and picking up in-store or curbside), indicating an enduring desire to interact with physical stores.

However, shoppers are less willing to pay a premium for fast delivery. Across all shoppers, 3.3% of the total cost is the average they would be willing to pay for two-hour delivery, down from 4.6% in 2019. While younger shoppers with children remain the most willing to pay a premium, consumers increasingly expect fast delivery as a standard part of the customer experience.

What’s more, health and sustainability look set to continue influencing consumer decisions going forward, and organisations should consider investment in empowering customers to make informed choices around these, cites the report. 44% of consumers are willing to pay a premium for grocery products that have sustainable packaging. This is more pronounced amongst Gen Z (64%) and millennials (54%) than older generations like boomers (30%).

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