New Gen Z research questions whether travel retail is aligned with expectations
m1nd-set takes a close look at the needs and expectations of Gen Z travellers
The latest research by leading travel retail research agency m1nd-set revisits the travel and shopping behavior of what will be the largest travelling shopper segment in the next few years – Gen Zs – highlighting the need for greater alignment with the generation’s consumer behavior.
The Swiss-based agency queries in the research whether travel retail has acknowledged that Gen Zs are quite different in their consumer behavior and argues that still significant changes are yet to be implemented to ensure the merchandising mix is aligned with the powerful generation’s desires, needs and expectations.
Peter Mohn, CEO & Owner at m1nd-set summarized how the generation differs in their consumer and travel behavior. “In the same way as the industry has placed huge importance on Millennials or Chinese consumers in recent years, it’s essential that the same, if not greater, priority is given to this young generation of consumers.
“We have conducted extensive research on Gen Z consumers globally and we see how they stand apart from other generations with distinct traits and behavior, especially in their consumer habits, lifestyle choices, and media consumption," he said.
According to Mohn, Gen Zs are “much more deeply driven by purpose, with about a third actively engaged in social justice or activism."
“Growing up as the first true digital natives, Gen Zs are immersed in technology, relying heavily on mobile devices and social media for both communication and decision-making. They trust peer recommendations more than traditional sources, frequently discover and shop for brands on platforms like TikTok and are key drivers of social commerce,” he said.
According to the m1nd-set research, Gen Zs are reshaping the travel industry by placing far greater emphasis on sustainability, authenticity, and meaningful engagement with local communities. The research demonstrates how they actively seek eco-friendly services, including zero-waste practices, local food, and eco-transport, pushing the travel industry toward greater environmental responsibility.
“When it comes to travel,” Mohn continued, “we see that Gen Zs are redefining tourism by prioritizing unique and eco-conscious experiences over luxury goods and traditional activities. They allocate significant portions of their budgets to travel, prioritizing international travel over spending on dining or shopping at home. Cultural and authentic experiences resonate more with them than nightlife."
“Short-haul, flexible travel options and sustainability are particularly appealing to Gen Zs, which highlights their preference for meaningful and responsible tourism over conventional travel," he added.
57% of Gen Zs prefer eco-conscious products and a similar percentage favor brands that share their values and vintage or pre-loved options, resonate deeply with this generation according to m1nd-set’s Gen Z research. Their preferences signal a broader demand for socially responsible and inclusive practices by the companies whose products and services they purchase, the research reveals.
The research prompts the question of whether the travel retail sector is genuinely prepared to meet the expectations and values of Gen Z shoppers. This, m1nd-set says, is a major concern given the importance of the shopper segment in terms of size and value.
“In the next four to five years Gen Zs will represent the largest consumer age segment in travel retail accounting for the majority of shoppers in the channel. They already have a spending power of over US$200 billion and it’s expected that, together with Gen Alphas, they will be spending three times the amount spent by all other generations by 2030," he said.
“Although footfall rates among Gen Zs are similar to those of other generations, the purchase rate among Gen Zs is lower than all other generations, which in turn leads to an underperforming conversion rate. Average spend is also generally lower than other generations, particularly in Asia Pacific,” Mohn added."
The main reasons Gen Zs give for not entering the stores or purchasing in duty free and travel retail differ across regions according to the research, but common challenges include the fact that they purchase elsewhere, have no intention to purchase and prefer not to carry more items. They also claim higher prices compared to home, a lack of unique or innovative products, limited promotions, and a shortage of authentic local goods are reasons for not entering or purchasing from the duty free shops. Many also perceive the offerings as unoriginal or too similar to those available in their home markets.
Gen Zs tend to notice touchpoints less than other generations generally, which, according to m1nd-set, can be explained by the fact that the industry is not communicating with Gen Zs where they consume their media, namely via social media platforms.
Shop floor sales staff are vital to increasing the conversion levels among Gen Zs, as not only is the interaction level by Gen Z shoppers above the global average, the impact of the interaction is also positive. Of those who interact, more than seven out of ten Gen Zs say the staff had a positive effect on their decision to purchase.
"The interest in the Gen Z shopper segment is genuinely strong among travel retail stakeholders as we are seeing continued strong demand for research and bespoke workshops on the profile,” Mohn said.
“We see though that still more needs to be done; businesses in travel retail must continue to focus on building communities, offering unique experiences, and embracing purpose-driven branding to engage with Gen Zs. Travel retail spaces should serve as 'experience hubs' that highlight sustainability and well-being, while fostering connections through peer recommendations and social commerce.
“We need to see stakeholders curating more creative, Instagrammable, and TikTok-friendly retail environments, along with personalized, video-driven social media marketing to appeal to and win over this discerning generation,” Mohn concluded.
