Generation Z doesn’t prefer to just shop online, making the in-store experience still a vital part of the business.

Despite what you’d think, the first digitally native generation actually prefers to shop at bricks-and-mortar stores, says a study released by IBM and the National Retail Federation. According to the study, 98 per cent of those in Gen Z shop in-store despite growing up surrounded by technology that encourages the switch to online shopping.

In fact, Gen Z may be the most demanding yet – at least in what they expect. Fifty-two per cent agreed that they would transfer their loyalty from one brand to another if the brand’s quality is not up to par, for example.

“Generation Z expects technology to be intuitive, relevant, and engaging – their last great experience is their new expectation,” IBM general manager of global consumer industries, Steve Laughlin, said in a statement. “This presents a significant challenge for retailers and brands to create a personalized, interactive experience with the latest digital advances or risk falling behind. This kind of innovation is not linear or a one-time project – it is a new way of thinking, operating, and behaving.”

By 2020, the global Gen Z population is projected to reach 2.6 billion, and the group will have tremendous buying power – $44 billion. Three quarters of those surveyed said that they spend more than half of the money that is available to them each month.

While that number will surely go down as the generation reaches adulthood, this represents an opportunity to capitalize on for retailers who stay on top of generational trends, especially given the study’s indication that Gen Z already has a significant influence over what the family as a whole spends its money on.

Customer experience is an especially important matter to Gen Z, and those consumers are more than willing to play ball with the brands who create an interesting and innovative experience. This generation has no qualms with getting involved in brand campaigns either. According to the study, 36 per cent would help create digital content for a brand, 42 per cent would participate in an online game for a campaign, and 43 per cent would participate in a product review.

With so much buying power at hand, retailers have to look past the often talked about millennial audience and start dialing Gen Z.

For more insights from the study, check out the infographic below (click for a larger version).

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