Adapting Ecommerce Strategies For Gen Z Consumers

Gen Z didn't just change the marketing funnel. They burned it to the ground. And brands spending millions on traditional funnels are about to learn a painful lesson. I've been tracking this shift at HotStart VC. The data is clear: The old funnel: Awareness → Consideration → Purchase → Loyalty Gen Z's reality: An infinite loop of inspiration, exploration, and community that never ends. Here's what's actually happening: 1. Social media isn't a channel anymore - it's the entire marketplace For Gen Z, TikTok is: Their search engine Their discovery platform Their review site Their shopping mall 77% are actively seeking style inspiration monthly. Not on Google. On social. 2. They're not buying products - they're joining universes Look at the winners: • Rhode doesn't sell skincare. They sell the "strawberry girl summer" lifestyle • Madhappy isn't a clothing brand. It's a mental health community • Represent isn't fashion. It's a culture 54% of Gen Zs say their favorite brands make them feel part of a community. 3. The "swipe to buy" dream is dead Instagram killed Shop. TikTok Shop struggles in the West. Why? Because Gen Z doesn't impulse buy at the point of inspiration. They research obsessively: Reading comments sections like academic papers Watching unboxing videos for fit and quality Cross-referencing reviews across platforms Then they buy in-store. 73% prefer physical purchases after digital research. 4. Influencers matter more than brands 51% of Gen Zs believe influencers create trends 21% credit celebrities Only 15% think brands do The power shift is complete. 5. They trust their algorithm more than your ads 80% of Gen Zs feel bombarded by more advertising than any generation. Their response? They've become master curators. They don't discover brands. Their algorithm serves them brands. They don't seek products. Products find them through their interests. The new playbook emerging: Stop thinking funnel. Start thinking infinity loop. Create content that lives everywhere Build experiences worth joining, not just products worth buying Partner with creators who share your values, not just your demographics Become educators during their research phase Bridge digital discovery with physical experience The brands winning with Gen Z aren't following a funnel. They're creating gravitational pull. And once Gen Z enters their orbit, they never really leave. The funnel is dead. Long live the loop. Source: https://lnkd.in/dXn9jTwu

In retail, many chase the next big thing—a new style, a new way to reach consumers—triggering a frantic race to adopt. But most trends fade as fast as they appear. The real game-changers are curated habits that prove they can stand the test of time. I’ve championed social commerce as the future of retail for over a decade. In hindsight, that barely scratches the surface. It’s now a deeply ingrained consumer behavior. The imperative isn’t just to adopt it, but to evolve with it—constantly and intentionally. At HSN, social commerce was core to our strategy. We pioneered the blend of shopping and entertainment. That’s the essence: finding the sweet spot where entertainment, connection, and commerce converge. Soon after, platforms like Twitch began enabling users to both game and shop in real time, blending entertainment with commerce. Fanatics has successfully leaned into this model as well, immersing fans in live experiences while showcasing gear in action, often worn by their favorite athletes and community, turning fandom into a powerful trust signal. More recently, TikTok Shop collapsed the purchase funnel into a single scroll. It's no longer discover, then buy. Now, it’s see it, want it, buy it—seamlessly, in-platform. So, as we look ahead, how do I see this "social commerce habit" evolving? Here's what I expect: 🔹 Creator Integration is Non-Negotiable. For Gen Z, in particular, TikTok Shop has become a primary discovery engine. They trust their favorite creators to genuinely try products and offer honest feedback. The more brands lean into authentic partnerships with creators, the more trust they build in this integrated shopping experience. It’s about relationship-driven commerce. 🔹 Embrace a Zero-Click World. Speed and simplicity are paramount. Consumers need to be able to see, buy, and receive as fast as humanly possible. This means minimal clicks, minimal friction, and no moments for reconsideration. It's about instant gratification and removing all barriers between desire and ownership. 🔹 Elevate Live Shopping. This is a powerful return to the personal connection and real-time interaction that defined the best of traditional retail. Shoppable videos and live sessions transform social media into a personalized shopping aisle. Imagine experts demonstrating products, showing how they fit or can be styled, all in real-time, tailored to your interests. It brings humanity back to digital retail. 🔹 Unlock the Power of Virtual Try-Ons. A longstanding hurdle in e-commerce is "try before you buy." AI-enabled virtual try-on features solves that, making online shopping more immersive and convenient. This translates directly into higher conversion rates, deeper engagement, and customers spending more valuable time interacting with your brand digitally. It’s time to stop treating social commerce like a trend. This is commerce, full stop. It’s a fundamental consumer behavior that belongs at the center of every modern retail strategy.

Gen Z isn’t spending. And it’s not just a phase. A quiet shift is underway. As brands chase Gen Z for cultural cachet and market growth, the generation once hailed as digital-first super-consumers is pulling back...not just on big-ticket items, but on everyday spending. What’s emerging isn’t just frugality it’s a redefinition of when, why and how they consume. From skipping nights out in favor of at-home pizza parties, to budgeting drinks, to ghosting traditional luxury items, Gen Z is trading status for savings and choosing to opt out, not buy in. This recalibration of priorities is forcing brands to confront an uncomfortable truth: the youth target they’ve historically invested heavily in, may not be ready or able to invest back. Recent research and news articles point towards the shift, not just in spending but a fundamental sense of vulnerability that is hard to ignore. >According to Deloitte’s 2025 Gen Z & Millennial Survey, 48% of Gen Z report feeling financially insecure this year, up sharply from just 30% in 2024 (Source: Bloomberg) >Between January and April 2025, in-store and e-commerce purchases by 18- to 24-year-olds dropped 13% year-over-year, signaling a strong move toward saving and thrift culture. (Source: Pyments) >In 2024, 60% of Gen Z lived paycheck-to-paycheck, highlighting widespread financial stress even before the recent pullback. (Source: Deloitte) A tough job market is also deepening the slowdown. This means the spending dip isn’t just about preference, it’s also about pressure. Many Gen Zers are finding it increasingly hard to break into the workforce. Sectors like media, marketing, and tech have experienced deep cuts and other entry-level roles have shrunk. Even hospitality and retail, once considered fallback options, are offering fewer hours and lower pay. With mounting student debt and fewer stable income sources, Gen Z’s financial caution is more an attitudes of survival than strategy. What this means:  >Brands will need to rethink ROI on Gen Z campaigns: Marketing budgets devoted to pro-spend channels (e.g., luxury launches or impulse buys) could underperform. ROI hinges on re-segmenting audiences by spending behavior, not just age. >Prioritize value & utility over eyeballs. Brands must pivot to messages that emphasize affordability, durability, and real benefits. Promotions and bundled value propositions are more resonant than aspirational branding. >Serve Gen Z where they are: financial partners, not just vendors. Integrate savings tools, BNPL options, cashback rewards, and educational content. Aligning with Gen Z’s preference for proactive financial tools builds trust and spending confidence. As Gen Z rewrites the rules of value and consumption, brands face a critical choice: double down on outdated assumptions or evolve with a generation that’s reshaping shopping behaviors and preferences from the margins.