How Gen Z Is Changing the Retail Market and Potential Pitfalls Businesses Need To Be Aware Of
As the first generation of Digital Natives enters the professional space, the importance of E-Commerce Platforms has reached a new level. Gen Z customers are more likely to purchase through social media platforms. What impact does this have on the consumer products industry?
Some of the biggest social media platforms utilized by Gen Z include Instagram, TikTok, and Facebook. Depending on the service industry, some social media platforms could be of more importance than others. Based on a study article entitled: The Pandemic Year in Mobile Apps from Global Wireless Solutions, Gen Z users of lifestyle applications spend more than twenty-eight minutes per day shopping on these applications and 20% more time on social media applications because of the COVID-19 pandemic and its lockdown in 2020.
This has presented a new marketing avenue for retailers around the world. A significant advantage to utilizing these platforms as a marketing tool is that they are free and provide a platform to introduce different types of businesses to millions of users. Whether it is a small business that has little to no advertising budget or a large company looking to become publicly traded, these platforms provide opportunities for all types of companies and businesses to showcase what they have to offer to Gen Z customers.
The report, Mastercard SpendingPulse, showed an 8.5% increase in retail sales over the holiday season, defined as Nov. 1 – Dec. 24, compared with last year. The figures exclude automobile sales. Sales in stores were up 8.1% compared with last year, while e-commerce sales were up 11%.Compared with 2019, before the pandemic brought about an explosion of online ordering, e-commerce sales jumped over 61%. Online sales made up 20.9% of all retail sales this year, according to the Mastercard report. In 2019, online sales accounted for just 14.6% of all retail sales, underscoring how the pandemic has accelerated the shift to e-commerce (Swanson, 2021).
With respect to the retail industry, within the past year, Instagram and Facebook have expanded their partnerships with Shopify to transform posts and stories into shopping experiences for customers by including product tags or links to online stores. Also, TikTok has revamped its ad-service program to become more cost-friendly to brands.
Those in the retail industry are using social media to grow their brand by doing the following:
- Instagram now provides a simple, consistent in-app shopping experience from product discovery to checkout without having to leave the app.
- Facebook now allows you to create and schedule social media posts, link Shopify products to your posts, and add links to discount codes to help convert followers into customers.
- TikTok now provides affordable in-feed ads and a self-service platform that allows you to set your budget and TikTok’s Artificial Intelligence bids on advertising slots on your behalf. These ad campaigns can be purchased for as little as $50.
Read more about how to expand your social media reach through Shopify.
While offering more online platforms for customers to generate new sales would be advantageous, it also provides hackers and spammers with more avenues to hold your business hostage, making cybersecurity an ever-growing priority for business owners around the world. Here are some ways to keep your business safe and prepared for a potential cyber security breach:
- Penetration Test: A penetration test mimics a hacker’s tactics, techniques, and procedures. It demonstrates which attack combinations can be successful in and against your network, something a vulnerability scan can never tell you. The goal of the penetration test is to discover as many successful attack combinations as possible in the time allotted. The penetration test will take your ability to reduce organizational risk to the next level.
- Vulnerability Scan Subscription: This is an external and/or internal scan of all assets connected to your enterprise network. An external vulnerability scan covers your websites, remote access services (ex. VPN), or any other servers or services exposed to the outside world. An internal vulnerability scan covers all workstations, servers, network infrastructure devices (ex. switch, firewall), and any unknown system on the internal corporate network. You will learn which systems are vulnerable to which public vulnerabilities, but of all the assessment types available, a vulnerability scan alone will provide you with the smallest reduction in organizational risk. If you are currently doing nothing, vulnerability scans are better than nothing.
- Business Continuity Plan Assessment: Data loss can result from many things, from computer viruses, ransomware, and hardware failures to file corruption, flood, fire, or theft. If you are responsible for your business’s data, a loss may involve a substantial impact on financial, customer, and company data and on your reputation. Having reliable data backup is often not enough. A well-developed Business Continuity Plan that has been independently verified to address modern, evolving cyber threats is critical. This will minimize disruption to the health of your company’s financial and operational stability, as well as to its reputation from today’s devastating cyber impacts.
In conclusion, as the age of social media continues to evolve at a rapid pace; e-commerce platforms are becoming an asset to building brand recognition among Gen Z customers. However, these new platforms could come at a potential cost if you do not take the appropriate steps to protect your business.
Author: Michael Tiplady, CPA | [email protected]