m1nd-set on how Gen Zs are redefining consumer behavior
Travel retail research expert m1nd-set’s latest shopper insights focus on Gen z consumers and their shopping habits.
“Much ink has been spilled on the formidable potential of the Gen Z consumer segment for the travel and travel retail sector, and with good cause,” m1nd-set says.
The demographic, which has been the subject of m1nd-set’s GenZ RedY workshop series in partnership with Blueprint for over a year, represents over a quarter of the world’s population and is expected to account for 27% of the workforce by 2025. In around four years, by 2028 or 2029, Gen Zs will account for around 1,2 billion global travellers, outnumbering Millennials as the largest global airline passenger group.
This month’s edition of m1nd-ful is titled ‘How are Globe-trotting Gen Zs responding to Global Travel Retail?’ and explores how Gen Zs are reshaping the global travel and tourism sector. M1nd-set reviews their shopping trends in travel retail and discusses best practice on how to influence this unique generation, to ensure travel retail meets their expectations.
According to the report, it’s important to recall some of the key traits among Gen Zs “as they are clearly quite different in their behavior compared to all other generations, whether via their lifestyle, media consumption, or shopper behavior”.
“It’s important to clarify that they are not just a younger version of the Millennials but inherently different,” m1nd-set states. “They are very much more driven by purpose in their consumer choices. Around one-third of Gen Zs are regularly engaged in activism or social justice work compared to less than a quarter of Millennials, highlighting Gen Z’s strong dedication to driving social change.”
Gen Z is the first digital native generation, meaning they grew up with the internet, mobile technology, and social media as integral parts of daily life from a young age, setting them apart from previous generations who adapted to digital advancements later in life. They rely significantly more on peer recommendations than all previous generations; around three-quarters of Gen Zs trust peers and friends more than any other source for their shopping and life choices. They also engage in social commerce more than all other generations. Half of Gen Zs use social media to research and discover new brands and more than four out of ten Gen Zs follow and purchase brands directly on Tik Tok. This permanently connected generation is significantly more dependent on their mobile phones as a result, with more than three in ten Gen Zs feeling uncomfortable if they do not have their mobile phone for even 30 minutes.
M1nd-set believes the Gen Z attitude towards travel and tourism is redefining consumer behavior. “The good news is that Gen Z travellers are increasingly prioritizing travel in their annual budgets, with a significant majority planning to take at least two trips per year and just over half taking at least three trips per year. They spend heavily on travel, especially on travel accommodations, and tend to reduce spend on dining and shopping to allocate more to their travel budgets. Flexibility, unique experiences, accessible destinations and eco-conscious consumption are key values for Gen Zs. They generally prefer to spend on travel experiences as opposed to luxury goods too.”
Many Gen Z travellers show limited interest in long-haul, low-cost flights and prefer cultural experiences over partying and nightlife. A significant percentage even say they avoid alcohol for their personal safety. Cultural destinations are also increasingly popular among Gen Zs.
Evolving values: sustainability and wellbeing
The Gen Z generation is reshaping the travel sector by increasingly prioritizing sustainable and authentic experiences. This trend reflects their commitment to environmental consciousness, personal well-being, and meaningful engagement with local communities. They prioritize eco-friendly services, such as zero-waste practices, local food, and eco-friendly transport options. Gen Z’s emphasis on transparency and social responsibility is also encouraging stakeholders in the travel and tourism sector to be more ethically and environmentally mindful; consequently, popular travel destinations are being forced to cater to these values. Travel and tourism brands are adapting by offering eco-friendly options, tech-driven services, and meaningful, locally immersive activities. This is underscored by the fact that 28% of Gen Zs consciously choose more sustainable ways to travel. Mental health and wellbeing is also of significant importance to Gen Z consumers with six out of ten saying that they care more about their mental health than they do about their physical appearance.
More than half (57%) of Gen Zs place huge importance on purchasing products from brands that are authentically preserving the environment. A similar percentage say they prefer to purchase brands that share their social values while two thirds of Gen Zs say they think it's important that brands take their opinion into consideration.
When travelling and spending on shopping, Gen Zs tend to seek greater inclusivity and diversity. This means more diverse body shapes in advertising, and a wider variety of sizes, according to around four out of ten Gen Zs. The pre-loved category that has started to emerge in travel retail will invariably be well-received by Gen Z shoppers, as more than half of the segment say they like shopping for vintage clothes.
Digital and experiential is key
Gen Z's have a strong preference for experience-focused, tech-integrated travel. The generation tend to opt for digital tools when planning, using social media platforms as a key source for travel information. Social media is a key inspiration tool for this generation, surpassing traditional sources like search engines. TikTok and Instagram have both become an important travel discovery tool, with more than eight out of ten Gen Z travellers across many developed markets finding new destinations through TikTok.
Gen Z travellers are seeking unique, adventure-filled trips, including eco-tourism, sports events, and cultural festivals. Tech-savvy Gen Z travellers tend to use virtual reality for pre-travel experiences. Given the generation’s preference for apps when researching and booking their travel, many hotel chains are adapting by offering personalized, tech-driven services like room management apps and mobile communication with staff to enhance the guest experience. Some online travel agencies have responded to the quest for more streamlined digital experiences by incorporating live-streaming and offering real-time, interactive content to engage with the Gen Z customer demographic when booking their travel.
As for the travel type itself, personalized experiences which provide real added value are increasingly sought after by Gen Z consumers. More than six out of ten Gen Z consumers referenced various experiential tourism options such as wellness sessions, perfume making workshops, candle-making classes or art & craft workshops as opposed to traditional one-size-fits-all tour packages. They are also keen to experience local culture when travelling with 80% expressing a strong interest in taking part in local customs and traditions.
Unlocking the Chinese Gen Z potential
Gen Zs in China are expected to represent just under 30% of the population in 2025. They are the world’s second largest Gen Z population after India, which has just under 400 million Gen Zs. As Gen Z consumers in China become a key driver in the travel market, their preferences are reshaping the industry too. Just under three quarters of China’s Gen Z workforce view international travel opportunities as a primary motivator to go to work and earn a living; this surpasses traditional life goals among Chinese consumers like home ownership.
In 2023, just over 70 million Chinese travelled abroad, with this number expected to grow to 200 million by 2028. Two thirds of this demographic are Gen Zs, aged between 18 and 29 and primarily female and spontaneous, favoring last-minute bookings and niche, authentic experiences. China’s Gen Zs are prioritizing personalized, social experiences over traditional group tours. Many young travellers prefer smaller, more cost-effective trips, travelling with their peers, with whom they enjoy common interests. Gen Z travellers have become more selective about group sizes, pricing, and trip duration, favoring shorter trips and avoiding large groups.
Chinese Gen Z travellers are increasingly focused on memorable experiences like cultural and outdoor activities, and they are eager to spend on these activities during holidays, prompting travel providers to offer specialized, eco-conscious travel packages and tailor their services to meet the demand for unique and personal travel experiences. The travel and tourism sector is also adapting to the Chinese Gen Z demographic by focusing on authenticity and tailored travel options. Travel agencies are adjusting their offerings to create shorter, more affordable, and themed travel experiences.
How in line is global travel retail with Gen Z expectations?
One of the most important aspects to bear in mind about Gen Zs is the fact that they will represent the largest consumer age segment in travel retail by 2028 or 2029, accounting for the majority of all shoppers in the channel. They already have a spending power of over 200 billion USD and it’s expected that, together with Gen Alphas, they will be spending three times the amount spent by all other generations by 2030.
The footfall and conversion challenge
If travel retail stakeholders want to ensure the product offer is in line with Gen Z expectations, it’s clear that a rethink of the merchandising mix will be necessary. There is no doubt that these younger consumers are just as interested in browsing the shops as other generations, as footfall rates among Gen Zs are the same as for other generations globally, varying, depending on the region, between 36% and 45%.
The purchase rate among Gen Zs is considerably lower than all other generations however – in the mid-twenties compared to around three in ten for all other generations, which in turn leads to an underperforming conversion rate of less than 60%, compared to 65% for other age groups. Average spend is generally lower than other generations also, particularly in Asia Pacific (US$135 vs US$161).
The main reasons Gen Zs say they visit the duty free shops are to browse around and kill time, significantly more than other generations. They also visit because they think the shops look inviting, or to treat themselves and to look for the latest new products. Once again, given the below average purchase rate, we can deduce that they don’t necessarily find what they are looking for, hence the need for a re-evaluation of the product mix to reposition the travel retail offer, so that it is more in line with their expectations. They are travel retail’s core customer segment so it’s imperative that they feel the desire to acquire.
The main reasons for Gen Zs not entering the travel retail stores are because they purchase elsewhere, considerably more so than the global average (43% vs 31%), and because they were unwilling to carry more items during their flight (42% vs 35%). Lack of time is another reason Gen Zs said they didn’t enter the stores, and significantly more than other generations (34% vs 23%) and also because they prefer to purchase local, authentic products, also significantly more than the global average (29% vs 24%), which they feel is lacking in travel retail. Gen Zs also tend to head straight for the departure gate more than other age groups (23% vs 15%). As for purchase barriers, aside not having any intention to purchase in travel retail, price differentiation with destination, home and even other Duty Free shops as well as the lack of promotions, are among the main reasons for the below average conversion by Gen Z shoppers.
Why do Gen Zs buy?
For those Gen Zs who do purchase, one of the key drivers is the in-store experience, which is on a par with the value aspect of travel retail at 43%. Convenience is also among the top purchase drivers and significantly more so than the global average at 27% compared to 19%. An offer suitable for self-treating is also cited among the top conversion drivers for Gen Zs. The young shoppers are clearly quite influenceable once inside the store as more than eight out of ten make the decision to purchase inside the store, either because they were undecided before entering the store or because they purchased on impulse. This is significantly higher than among other generations, among whom two thirds of shoppers make the decision to purchase in store.
Gen Zs tend to notice touch points less than other generations generally, particularly among European Gen Zs. While the internet is one of the main sources of information for Gen Z shoppers in travel retail, the travel retail environment itself is also frequently cited by Gen Zs as a touch point where they recall seeing information about the Duty Free shopping offer, whether outside the store, inside the store or during the flight.
The importance of staff engagement with Gen Z shoppers must not be underestimated, as the interaction levels with sales staff by Gen Z shoppers are above the global average at 51% vs 48%. The engagement impact is also positive, as more than seven out of ten (71%) say they were positively impacted by the interaction, only moderately lower than the global average (73%). European Gen Zs tend to interact the least (42%), while those in the Middle East interact the most (67%). The impact of the interaction is highest among Gen Z shoppers from Asia Pacific however (75%).
Key recommendations for conversion
Engaging Gen Z shoppers in travel retail will require community-building, creating unique experiences, and a shift to more purpose-driven branding. To achieve this effectively, it’s necessary to constantly have the finger on the pulse to understand the latest Gen Z trends. It’s essential to curate creative experiential retail engagements to develop unique, enticing experiences that will encourage Gen Zs to shop. It’s equally important to enhance the messaging around the purpose-driven aspects of the business, emphasizing brand values, and using peer reviews to demonstrate transparency and build credibility with this discerning customer segment.
Travel retail spaces need to be designed as "experience hubs" which emphasize sustainability and well-being, and where Gen Z consumers can connect and shop, dine and either work or relax. The marketing message and medium needs to be adapted also, using personalized, video-driven marketing on social media to build authentic brand engagement. The uniqueness that is still lacking in the eyes of the Gen Z shopper can be addressed by fostering collaborations between brands, retailers, and airports to promote unique experiences and products. Retail spaces, product packaging and in-store experiences should be “Instagramable” and "TikTok-friendly".
Finally, social commerce should be an integral part of the travel retail experience to align with the day-to-day reality of Gen Z consumers and their values. This also involves building a sense of community where Gen Z shoppers can enjoy a curated blend of local and global brands, where Gen Z consumers can both share with and seek recommendations from peers, and generally feel that their needs and expectations are catered for.
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