Gen Z and Gen Alpha Consumers are Requiring Companies to Reinvent their Digital Commerce Strategies
Over the next decade one billion digital-first consumers are expected to join global ecommerce in eight countries. Global Commerce Lead at Accenture who conducted the study compares it to the massive consumer moves from landline phones to mobile.
The Accenture Song report titled, “The Next Billion Consumers: A Fast-growing Opportunity for Digital Commerce,” suggests that some of the traditional barriers of entry into these countries’ markets may be avoided via digital commerce. Also, penetration of these markets may occur more quickly given the large number of consumers who are already using digital technology, making them more receptive to trying ecommerce when presented.
The eight countries of Bangladesh, Egypt, Ethiopia, India, Indonesia, Kenya, Nigeria, and the Philippines offer companies around the world new growth opportunities with an important demographic: 36% of these countries’ populations are between the ages of 6 and 26—prime consuming years.
“These new consumers are relevant to companies that operate in these countries today as well as the multinationals looking to grow their footprint and balance their global portfolios,” said Fabio Vacirca, Global Commerce Lead, Accenture Song. “However, strategies based on the western model of consumerism—the steady evolution from brick-and-mortar to digital commerce models that occurs over decades—won’t work for these consumers. Companies will need to be digital-first, leapfrogging older legacy approach.”
Accenture views these consumers’ digital shopping behaviors as having the “potential to transcend boundaries and influence purchasing habits more broadly”. The global consulting firm surveyed 3,000 digital consumers across all eight countries and arrived at four core digital shopper archetypes: digital native purchasers, digitally savvy millennials, digital native content creators and digital alpha influencers who are Gen Alpha, Gen Z, and Millennials. Their findings include:
- 80% already use online channels such as search engines, social networks, and videos to research products or services before purchasing,
- 76% of these consumers’ online buying decisions are influenced by “Likes” and “good comments” on social media with over half preferring to shop on social media apps over other purchasing platforms,
- 63% of social commerce shoppers consider themselves as repeat customers,
- 65% prefer to use online payment methods with convenient delivery options as a factor in their decision as “click and collect” (73%) and free delivery (79%), driving their decision to purchase,
- 75% say their decisions are influenced by easy-return policies, and
- Over 75% take easy-return policies into consideration when making an online purchase decision.
According to Accenture Song’s study, global businesses will have greater opportunities based on the recent trend of digital commerce revenues quadrupling since 2017—equating to $211 billion in 2022. The youth consumer demographic combined with little to no competition from 40% of the world’s largest consumer brands who are not yet in these markets presents great opportunities. But, the report also suggests that companies need to revise their marketing strategies for these more technology-knowledgeable Gen Z and Alpha Consumers.
Vacirca describes the magnitude of these consumers shifting over to e-commerce and the advantages some companies will have if they aggressively enter these markets.
“This moment is similar to the tectonic shift the telecommunications industry had when consumers leapfrogged landlines to mobile or similarly in the movement from the theater to streaming services,” said Vacirca. “The companies that will gain first-mover advantage will recognize they need to be as digital on the inside as they are on the outside and reinvent their commerce model to meet the needs of their future consumer.”
Accenture’s report includes strategies to take advantage of the opportunities emerging in these eight countries that is most relevant to current-day consumers and the online experiences they seek.
Read more: Industry Ecosystems Enter Next Stage of Digital Transformation
