Why Amazon May Be Losing Loyalty Among Gen Z Shoppers

If its 100 million-plus Prime membership program is any indication, Amazon has mastered the art of customer loyalty. But a new study reveals one age group it might not have quite as much sway over: Gen Z.

Commerce agency Wunderman Thompson surveyed over 15,000 online shoppers across the U.S. and Europe and found that 16- to 24-year-olds were least convinced that the e-commerce giant is best for customer service, returns and brand selection, and more apt than older consumers to prefer shopping with retailers and brand websites.

Of course, Amazon still garners the lion’s share of product searches, with 56% of respondents naming it as the starting point for their purchase journeys (a share that rises to 79% in the U.S.). But Gen Z consumers were more enthusiastic than most about searching directly with brands like Nike (39% versus 29% overall), and far more likely than older age groups to look to social media for both inspiration (49%) and search (15% versus 9% overall).

While the latter share may seem relatively small, consider that Instagram’s shopping features are relatively new: The platform started testing commerce capabilities in Feb. 2018, launched a dedicated shopping tab in September and rolled out its checkout tool this past March.

Younger shoppers aren’t only shopping on mobile, though — in fact, the majority (53%) prefer to shop with brands that have a physical store. While Amazon has some brick-and-mortar presence — Amazon Go stores, Amazon Books, Amazon 4-Star and Presented by Amazon kiosks — they’re hardly as ubiquitous as a national retailer.

Still, Amazon’s supremacy could ultimately work against it: 47% of shoppers — and 53% of Prime members — said they were worried about Amazon’s growing dominance. And the ethical concerns of Gen Z shoppers could drive almost one in five (18%) to another retailer.

Amazon is taking pains to keep them around, though. Last month, it announced a new influencer-led initiative called “The a Drop” featuring limited-edition fashion collections designed by social media stars from around the world. The pieces are available for 30 hours only (harnessing a similar model to the one perfected by streetwear brands like Supreme) and users can sign up for text alerts to be notified.

On Tuesday, Something Navy blogger Arielle Charnas also announced a partnership with Amazon Fashion, bringing her mostly- Gen Z and millennial audience to the shopping giant and building on the success of her best-selling Nordstrom collection.

Watch Something Navy’s Arielle Charnas Talks Secrets to Instagram Success & More

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