The aim of this article is to determine the impact of product characteristics on the online shopping behaviour of generation Z and millennials. The conceptual framework framed through the literature review identified four main factors affecting online shopping decisions:
- Personal Characteristics
- Product characteristics
- Website Characteristics
- Demographic profile
The research methodology explained the primary data collection and analysis procedure to answer the aim. This article presents the thematic analysis of responses received from interviewees regarding their perspectives on the impact of product characteristics on the online shopping behaviour of millennials and generation Z. The product characteristics considered for the analysis are:
- Product benefits
- Information availability
- Product characteristics (appearance, quality, availability)
- Price/ cost
A total of 7 interviewees from different medium and large-scale eCommerce companies participated in the interview round.
Product characteristics affecting the online shopping behaviour of Generation Z and Millennials
Millennials and Generation Z share distinct characteristics with respect to preferred product characteristics while shopping online. For instance, millennials look for products that are designed for a life of domesticity supporting their home and family. These purchases include furniture and consumer durables.
Product quality is one of the four pillars that make brand equity. It is the foremost factor influencing loyalty. In the case of millennials, products should be visually appealing, have a distinct personality, have a good market reputation, and be trendy. It is challenging to appeal to millennials with products which are already saturated in the market.”Interviewee E5
He further revealed that millennials are ready to bear a higher price for the quality of the product and service. Product quality for them is how durable the product is while the quality service for them involves how much the product delivered matches the product description. Thus, the overall superiority and excellence of the product promote customer satisfaction online.
On the other hand, in the case of generation Z, an additional trait, company values is relevant. According to the interviewee, company values are often included as a part of ‘product characteristics’ while considering a buying decision online. Moreover, the ease of product use is also important.
The design of the product should be friendly. This gives us a dual advantage. It makes our product visually appealing and also prompts impulsive buying. In fact, half the sales we make from generation Z are impulse purchases driven by product characteristics like appearance and ease of use.Interviewee E6
In this regard, sensitive topics should be avoided while creating the product.
Generation Z, as well as millennials, are not likely to buy products which are offensive to their state, culture or religion. So we take care to restrict the sale of clothes with slogans that are not universal or images that touch upon sensitive issues, such as labour and sexual orientation, particularly since human interaction is absent in case of online selling.Interviewee E6
He raised the example of Pepsi, whose recent ad campaign starring global icon Kendall Jenner faced severe backlash for portraying the Black Lives Matter campaign comically. Pepsi was forced to withdraw the ad immediately after gen Z and millennials shunned the brand globally. Thus, it can be ascertained that there is a commonality in product characteristics that influence generation Z and millennials. These include the consideration of cultural factors and the environment while designing a product and selling it online.
E1 stated that for generation Z, a product is high on quality when “it helps them to define who they are”, what is important to them and what they value in their lives also describes the product quality for them. This generation wants to be seen, and known thus marketers that invest in a relationship through empathy, deep understanding and insight will prevail.
Gen Z is quite comfortable while shopping online. They are often considered forerunners who are always aware of new trends. Interviewee E3 discussed the product availability and according to him;
The generation Z buyers wants to try as soon as something is launched thus product availability highly affects their satisfaction levels.Interviewee E3
For generation Z, timely availability of the product and speedy delivery are important.
Employee E3 while talking about product quality said that in order to improve this their company has adopted
Integrated electronic data interchange system. This system delivers the ultimate service quality, improves the performance and the productive capacity of the business to support high demands.Employee E3
He further elaborated that a three-staged model is used where the integration starts at the inter-organizational level which is followed by the local integration and finally the full integration of the internal and the external system.
Information availability is an important product characteristic
In the absence of physical examination of products, information availability plays a key role in influencing the online shopping behaviour of consumers. For instance, in the case of generation Z, they do not proceed with a transaction unless they have all the necessary information regarding a product. Interviewee E1, whose eCommerce platform deals with clothing items, revealed that the importance of information availability is a substitute for visual merchandising.
The experience of touch and feel is absent in case of online selling. Generation Z wants to see the details of the fabric, colour, and fit before purchasing an item of clothing online. It is thus a challenge for us to present the product in its best form on our website. If done well, it promotes impulsive buying.Iterviewee E1
Millennials give considerable importance to the availability of information online. According to interviewee E3, if they do not find the desired product information on the eCommerce site, they will browse through online catalogues and search engines for it. It helps them compare alternative products as well.
For example, if my website sells a bakeware item that does not match the dimensions of a customer’s oven, he or she would like the dimensions information in advance to avoid unnecessary returns.Interviewee E3
It helps them feel a sense of security. In the case of generation Z, the availability of product information helps in improving their satisfaction in two stages:
- Information search stage and,
- product decision stage.
Using the kinetic and the static image of the website makes the product information even more interesting thus motivating people to make purchase decisions.
Price sensitivity is one of the defining characteristics of Gen Z. This generation was unequivocally termed by all the interviewees as “thrifty”. According to interviewee E2, they do not want to pay the full price quoted for anything online. He further defines them as “fiscally pragmatic and practical” with their money and trying to gain full value from their purchases.
The interviewee revealed that when they conducted a survey online of their customers during a six-month period, it was found that ‘price’ was the biggest factor in deciding whether to purchase a product online, beating value and social media influence.
Due to this, they are not loyal.Interviewee E2
On the other hand, in the case of millennials, the price was less important than online reviews. They, however, search online for discount coupons before proceeding with an online transaction.
Millennials do not shy from spending good money on unique experiences. We have to be careful about how we portray our prices to them because if they do not find it convincing, it will dissuade them from online shopping. Their trust quotient when it comes to online shopping is relatively low as compared to gen Z.Interviewee E5
Another behavioural trait driven by the price sensitivity of millennials is that of the purchase decision duration. Interviewee E3, while explaining this correlation, explained that the higher the price of the product, the longer a millennial consumer will take to make the purchase decision. This sometimes ranged from 3 to 7 days.
We found this while tracking our regular customers’ browsing and purchasing behaviour based on their age. After extracting this pattern, we started to employ online marketing strategies that would prompt the customer with reminders and reviews of the product in related websites.Interviewee E3
The influence of discounts and pricing on millennials holds true only for certain product segments, particularly those that are purchased on smartphones.
Particularly, women, shoppers prefer discounts on home appliances and clothing while purchasing on mobile apps.Interviewee E3
The interviewee has studied the millennials’ online shopping patterns over a two-year period to come to this conclusion.
|Category||Sub-category||Defining category||Statement fitting category||Major impact on|
|Product characteristics||Product and service quality||How does product quality affect the buying decision||Product quality is one of the four pillars that make brand equity. It is the foremost factor influencing loyalty. In the case of millennials, products should be visually appealing, have a distinct personality, have a good market reputation, and be trendy. It is challenging to appeal to millennials with products which are already saturated in the market.|
-it helps them to define who they
-integrated electronic data interchange system. This system delivers the ultimate service quality and improves the performance and the productive capacity of the firm for supporting the high volume of business demands.
|According to the study, this factor has a major impact on millennials’ online shopping decisions.|
|Product availability||Product availability at different online platforms affects the online buying decision||Generation Z buyers want to try as soon as something is launched thus product availability highly affects their satisfaction levels||According to the study, this factor has a major impact on generation Z’s online shopping decisions.|
|Price difference||The price difference between the products available online and the product in physical stores affects the buying decision.||Fiscally pragmatic and practical.||According to the study, this factor has a major impact on generation Z’s online shopping decisions.|
|Product Appearance||Product appearance and the product being trendy and fashionable||The design of the product should be friendly. This gives us a dual advantage. It makes our product visually appealing and also prompts impulsive buying. In fact, half the sales we make from generation Z are impulse purchases driven by product characteristics like appearance and ease of use.||According to the study, this factor has a major impact on generation Z’s online shopping decisions.|
|Information availability||Information about product size, quality, the material used etc.||The experience of touch and feel is absent in the case of online selling. Generation Z wants to see the details of the fabric, colour, and fit before purchasing an item of clothing online. It is thus a challenge for us to present the product in its best form on our website. If done well, it promotes impulsive buying.||According to the study, the factor of information availability plays an important role in generation Z.|
The case study of Reflect.com capitalizing on product characteristics
Global FMCG company P&G launched Reflect.com, an eCommerce store featuring its cosmetic products in 1999. During that time, selling products online in an exclusive store was a novel concept, and a customizable-product concept was even more unheard of. With the taglines such as “create your own beauty” and “it’s the image of you”, reflect.com back then broke the rules of traditional brand development. The idea behind the innovation was to create a personalized line of beauty products and services. It allowed the women to select the colour, texture, ingredient and packaging to create the product. Customers were even given the authority to name their creations. (Chief Marketer, 1999).
First, the company acquired finite information about women’s needs using an interactive Q&A process. To fulfil this reflect.com allied with an internet search organization that enabled customers to pose questions and receive answers on a website through natural dialogue. Following this, P&G search and development labs would customize the product that matched the customer’s requirement. The customized product was delivered to the customer with their name on it. If the customer was not satisfied with the product, they would customize it until the customers were satisfied. The idea of reflect.com was ahead of its time and provided an important learning experience for the manufacturers. It also led to increased customer satisfaction.
Today millennials or generation Z buy a product that matches their ideal fit. Thus, by capitalizing on product characteristics, Reflect.com revolutionized the eCommerce industry in the following manner.
- Product customization: consumers prefer customization of products, especially through direct personal interaction with the company.
- Reflection of their true self: by allowing them to shape their product themselves, it appealed to consumers by letting them reflect their identity and personality on the product.
- Information availability: through direct interactions with the company officials, it made available a wide range of information that consumers seek before purchasing a product.
- Chief Marketer. (1999). Go-to-market makeover: P&G’s reflect.com takes on department stores. Retrieved October 15, 2019, from Chief Marketer website: https://www.chiefmarketer.com/go-to-market-makeover-pgs-reflect-com-takes-on-department-stores/