Gen Zs live the digital life and still like bricks-and-mortar stores.

That’s the surprising finding of a study conducted by IBM and the National Retail Federation, and released exclusively to WWD.

“Just as Millennials overtook Gen X, there’s another big buying group retailers need to plan for, and it’s even larger: Generation Z,” said NRF president and chief executive officer Matthew Shay. “They appreciate the hands-on experience of shopping in a store. With technology constantly evolving but some shopping habits remaining the same, retailers need to be agile enough to serve both needs. Retailers are constantly focused on experimenting with new innovations both online and in-store to remain relevant to evolving consumer demand.”

Gen Zs are considered to be those born in the mid-Nineties and the early 21st Aughts and the first  “digitally native” generation. The global Gen Z population is expected to reach 2.6 billion by 2020.

“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. “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.”

The “Uniquely Gen Z” study conducted by the IBM Institute for Business Value polled more than 15,000 consumers aged 13-21 from 16 countries.
Among the key findings:

  • 67 percent of Generation Z shop in a bricks-and-mortar store most of the time, with another 31 percent shopping in-store sometimes, indicating 98 percent of Gen Z shop in store.
  • Gen Z has access to $44 billion in buying power, with 75 percent saying they spend more than half of the money that is available to them each month.
  • There’s little brand loyalty: 52 percent of Gen Z consumers will transfer loyalty from one brand to another when the quality is lacking.
  • 66 percent say product quality and availability are the most important factors in choosing a brand over another; 65 percent focus on value.
  • 74 percent of respondents spend their free time online, with 25 percent online five hours or more daily.
  • 73 percent of Gen Zs use their phones primarily to text and chat socially with family and friends, but members are willing to extend their conversations to brand relationships.
  • 36 percent would create digital content for a brand, 42 percent would participate in an online game for a campaign and 43 percent would participate in a product review.

The study also showed the Gen Zs won’t tolerate or deal with an app that’s hard to navigate, and are very concerned about how personal information is used by websites.

IBM IBV lead researcher Jane Cheung, Stores Magazine editor Susan Reda, and two Gen Z students from the Fashion Institute of Technology’s Fashion Business Management program, will participate in an online discussion of the study’s findings at 11 a.m. Eastern time Friday.