Case Study:
Identifying retail and digital
opportunities in the Gen Z era
Our Research process began with examining the retail trends of Gen Z consumers: How they discover, build affinity, and ultimately trust brand experiences.
The mindset of Gen Z is one fraught with anxiety and stress. crisis fatigue due to global issues is compounded by the amount of time spent engaging online and with social media. Young people are seeking out comfort in nostalgia for perceived “simpler times” the Y2K era, and retro style aesthetics.
There is a desire for honesty and transparency from public figures and brands in an environment where so much is uncertain or AI generated. the values of a given brand or product should be immediately clear: High quality, inspirational, impactful.
Key Takeaways
Embracing Social Commerce
Gen Z is actively engaging with social commerce making it essential for brands to connect with them on social platforms.
Social Proof Drives In-Store Shopping
Gen Z trust voices on social media to influence their in-store purchases.
Algorithmic Discovery
Gen Z’s product discovery landscape is shifting, primarily on TikTok, where algorithm-based recommendations make it easier for consumers to discover products.
Inspiration Over Research
Gen Z relies on social media for inspiration, not research in comparison to older generations, guiding their next purchase.
Hands-On Shopping
75% Gen Z consumers are motivated to shop in-store to touch and feel products firsthand.
Immersive Sensory Delights
84% of Gen Z seek immersive experiences, emphasizing the importance of sensory pleasures that put customers at ease for a fun shopping journey.
Inspiring Merchandising
Gen Z is looking to be inspired and craves merchandising / messaging that sparks creativity and fuels imagination.
Operational Tech
Gen Z vales tech that enhances the efficiency and convenience of in-store experiences, such as self-check out and buy-online-pick-up-in-store.
Curated Brand Pop-Ups
They are drawn to curated brand pop-ups within larger stores, embracing unique experiences.
Looking towards the future
It I not enough to understand the current trends, we must look to the future at Gen Alpha:
The oldest among them at 13, they are growing up faster due to exposure to global problems and digital media from a young age. Gen Alpha is even more tech-reliant than their predecessors, with 63% prioritizing the latest technology. They spend most of their digital time gaming or consuming video content. Gaming is a creative outlet, with 94% identifying as video game enthusiasts. A significant portion of this generation doesn’t prioritize gender distinctions, extending to toys, clothing, skincare, and personal care products.
Exploring opportunities
DIGITAL SOCIAL CLUBS
WEB / APP / IN-STORE
Wren selects the Art Club and is encouraged to buy new pens and stickers to make the DIY of the Week. After they create an account, they can officially join the club to get personalized recommendations, rewards, and access to product launches and events.
WHY IT WORKS
Gen Z expects personalization as a baseline, so clubs for each of Five Below’s merchandising “worlds” let users browse the website & app by their favorite hobbies and interests. This light touch of personalization that doesn’t require inputting personal information aligns with Gen Z’s preference for exploring eCommerce primarily for inspiration rather than research.
MYSTERY REWARDS
WEB / APP / IN-STORE
In the store, Wren is excited to see a sign that shows how they’ll earn a surprise reward for purchasing gel pens and a notebook. At checkout, the cashier lets them pick a free novelty eraser - perfect for working on their new journal!
WHY IT WORKS
The “thrill of the hunt” is a key reason why customers return to Five Below. Enhance the excitement of discovering unexpected products with mystery rewards that are linked with purchasing specific items.
CREATOR STATIONS
IN-STORE
Wren loses track of time getting hands-on with products at the Creator Station. They scan the QR code to see other people’s spin on the DIY project. They plan to return to Five Below soon to have another relaxing, tactile experience.
WHY IT WORKS
Gen Z is more likely to go in-store when they know they can have an enjoyable, hands-on experience. Creator Stations would give shoppers the instant gratification of being able to explore products in a tactile way. Swapping products out on a regular basis to provides a surprising experience that inspires return trips.
Use Creator Stations and imaginative in-store displays to inspire customers to share their experience with others by providing a QR code to share their own creations on the Five Below app and/or social media.
REDEEM REWARDS
IN-STORE
At checkout Wren is given a selection of novelty erasers to choose from for completing the in-store treasure hunt. Wren selects one they like, and the employee says they can track their rewards and earn more online and in-app by joining Five Belong - the Five Below loyalty rewards program.
WHY IT WORKS
Gen Z appreciates when loyalty rewards are immediate and meaningful. Rewards can be inexpensive and low-lift, such as candy and other bulk-bin items, but tailoring them to customers’ interests is key.
Connecting loyalty rewards to interest groups it taps into Gen Z's desire for gamified, personalized experiences, giving them the ability to freely explore different interests available in Five Below’s merchandising "worlds.” Tiered rewards and badges are gamified to keep them motivated to return.
EVENTS & GAMIFICATION
WEB / APP / IN STORE
At home, Wren shares the photos from their shopping trip with their friends. They check their status on Five Belong and play a Halloween-themed game to earn more rewards points and can’t wait to return to the store.
WHY IT WORKS
The gamified rewards program builds loyalty across blended virtual and physical experiences. Customers can play themed games to earn rewards points, with tiered levels motivating them to stay engaged with Five Below’s gamified experiences.
In-store events draw Gen Z shoppers back and inspires virality as they bring friends along. These events hosted by Five Below associates add the element of social trust that Gen Z values and keeps them digitally connected to their local Five Below store in a low-effort and fun way.
