This article originally appeared on Forbes as part of the Forbes Business Council, by Cymbio CEO Roy Avidor.
Gen Z is on track to become the largest and most powerful consumer generation in history. Comprising 32% of the global population and 40% of global consumers, Gen Z’s shopping preferences are more than just viral, fleeting trends: they are the driving force of growth in retail commerce.
No generation has held more commercial sway—or been harder to pin down—than Gen Z. As the first generation raised on endless shopping options—whether in-store, via BOPIS (buy online, pick up in-store), on digital marketplaces, social platforms, brand websites, and beyond—determining where to reach them is a challenge in itself. To unlock Gen Z’s staggering $12 trillion purchasing potential, brands must position themselves on the digital channels where this generation scrolls, interacts, and shops.
Where is Gen Z Shopping?
The largest generation in history is shopping on marketplaces and social platforms. These digital storefronts allow third-party sellers to use the real estate of the platform to sell their products, while ultimately handling product shipping themselves.
For Gen Z, marketplaces such as ASOS, SHEIN, TikTok Shop, and Amazon have been wildly popular, leading to three out of four Gen Z online shoppers globally making purchases on online marketplaces in 2022.
Marketplaces are not only extremely popular with consumers currently—they’re gaining momentum. By 2030, marketplaces are projected to deliver over 50% of the growth in the U.S. e-commerce sector, solidifying their dominance in the digital retail landscape.
Why Is Gen Z Flocking to Marketplaces?
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Their Natural Habitat is Online
It’s no surprise that these lifelong digital natives feel more comfortable shopping online. Over half of US Gen Z prefer to shop online than in-store, and the vast majority (96%) make purchases online at least once a month.
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Watching their Wallets
32% of Gen-Z claim they are driven to purchase based on the lowest price. This cost-consciousness has led Gen-Z to turn to online marketplaces, where they can easily compare a wide range of products from different brands to find the best fit for their budgets. With marketplaces perceived by consumers as outperforming traditional e-commerce sites in terms of pricing, they have become extremely popular with this budget-savvy generation.
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Same-Day Delivery Offers the Whole Package
The option for same-day delivery is critical in determining where nearly all Gen Z consumers (96%) shop—10% more than the average consumer. Same-day delivery, popularized by the most popular online marketplace in the US, Amazon, is a feature that typically only the infrastructure and scale of marketplaces can manage. Marketplaces are typically rated higher than other e-commerce platforms in offering attractive delivery options, gaining the attention of convenience-focused Gen Zers.
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Seeking One Stop Shops
Having grown up with endless information at their fingertips on the internet, Gen Z values variety in their shopping experiences. A notable 43% of Gen Z prefer to purchase a wide range of products or brands within the same category—59% more than Gen X. This preference aligns with the nature of marketplaces, which offer a diverse assortment of products from multiple brands, making them a natural fit for Gen Z shoppers.
Scrolling, Searching, and Shopping
One specific kind of marketplace has taken off particularly with Gen Z over other generations: social commerce platforms.
Spending an average of three hours a day on social media—33.3% more than millennials and 50% more than Gen X—has led Gen Z to spend more time shopping on these platforms than other generations. In fact, Gen Z makes purchases on social media marketplaces four times more often than older generations.
Gen Z is increasingly turning to social media for the entire shopping experience—starting with product discovery and ending with purchasing. A remarkable 97% of Gen Z consumers cite social media as their top source of shopping inspiration, and 54% of Gen Zers prefer social media to online searches when it comes to product discovery.
Platforms like TikTok have evolved into defacto product search engines for Gen Z, with 43% starting their product searches on TikTok over traditional sources such as Google. As a result, 50% of shoppers on TikTok have made purchases from brands they first encountered on the platform. For brands looking to reach Gen Z, selling on social commerce platforms ensures they will be discovered by this demographic, without the need for ad spend.
Social commerce’s surging growth, projected to increase by an average of 31.6% annually until 2030, is a testament to the power this generation holds. With 70% of Gen Z having made purchases on Instagram and 63% on TikTok—well ahead of any other generation—their shopping habits are shaping the future of the industry. The rise of social commerce serves as a clear indicator of Gen Z’s formidable economic power.
Meet Them Where They’re Shopping
To reach Gen Z it’s critical to meet them where they’re at—or where they’re shopping. Today, Gen Zers are gravitating towards marketplaces and social commerce platforms for their shopping needs.
As such, selling on these channels—or multiple of these channels for maximum potency—is the most fruitful and cost-effective way to reach Gen Z in one fell swoop. By capitalizing on a platform’s built-in reach to Gen Z, brands can minimize their advertising spend while acquiring a new base of Gen Z customers.