Gen Z and Retail Travel Insights

Is Travel Retail Ready for Gen Z? New Research Highlights Gaps in Alignment

The latest research from Swiss-based travel retail agency m1nd-set sheds light on the shopping and travel behaviors of Gen Z—a group poised to become the largest segment of traveling shoppers within the next few years. The findings reveal a pressing need for the travel retail industry to better align its offerings with the unique expectations and values of this influential generation.

Gen Z: A Generation with Distinct Values and Habits

Peter Mohn, CEO and Owner of m1nd-set, emphasized the importance of prioritizing Gen Z consumers, noting their markedly different behaviors compared to other generations. “Like the focus placed on Millennials and Chinese consumers in recent years, it’s critical to give equal or greater attention to Gen Z. This generation exhibits distinct traits, particularly in their consumer habits, lifestyle preferences, and media consumption,” Mohn said.

Key insights from m1nd-set’s research include:

Purpose-driven behavior: About one-third of Gen Zs are actively engaged in social justice or activism, reflecting their deep commitment to purpose.
Tech-savvy digital natives: Gen Z relies heavily on mobile devices and social media platforms like TikTok for discovering and shopping for brands. Peer recommendations carry significantly more weight than traditional marketing.
Sustainability-focused travelers: Gen Zs place high value on eco-friendly practices, zero-waste services, and authentic engagement with local communities when traveling.

How Gen Z is Reshaping Travel and Retail

The research highlights how Gen Z is redefining the travel industry by prioritizing experiences that are authentic, eco-conscious, and culturally meaningful over traditional luxury goods and activities.

“Gen Zs are reshaping tourism,” Mohn explained, “by focusing on flexible, short-haul travel and unique experiences. They spend a significant portion of their budgets on international travel, favoring local and sustainable options over dining or shopping at home. Cultural experiences resonate far more than nightlife or traditional tourism.”

Key data points from m1nd-set’s study include:

57% of Gen Zs prefer eco-conscious products, and a similar percentage gravitate toward brands that align with their values.
Pre-loved and vintage items resonate strongly with Gen Zs, reflecting their demand for socially responsible and inclusive business practices.

Challenges in Engaging Gen Z in Travel Retail

Despite their growing presence, the research highlights key challenges in converting Gen Z travelers into loyal shoppers in duty-free and travel retail spaces:

Lower conversion rates: While Gen Z footfall is similar to other generations, their purchase rate is notably lower, particularly in the Asia-Pacific region.
Reasons for low engagement: Gen Zs often cite higher prices, lack of unique products, insufficient promotions, and unoriginal offerings compared to their home markets. Many also prefer not to carry extra items while traveling.
Media disconnect: Gen Z consumes media predominantly through platforms like TikTok and Instagram, yet the travel retail industry lags in effectively communicating with them through these channels.

Opportunities for Travel Retail: Winning Over Gen Z

Mohn emphasized the vital role of shop floor sales staff in boosting Gen Z conversion rates, noting that interactions with staff positively influence purchase decisions for over 70% of Gen Z shoppers who engage with them.

To capture the attention of this discerning generation, m1nd-set recommends that travel retail businesses:

Build communities and offer unique experiences: Retail spaces should serve as experience hubs, incorporating sustainability and well-being into their design.
Embrace purpose-driven branding: Align with Gen Z’s values by showcasing authenticity and eco-conscious practices.
Leverage social commerce and peer recommendations: Invest in creative, Instagrammable, and TikTok-friendly retail environments that encourage sharing and discovery.
Personalized, video-driven marketing: Develop tailored content that speaks directly to Gen Z preferences, using video and interactive formats.

A Generation of Growing Influence

By 2030, Gen Z and their successors, Gen Alpha, are expected to spend three times as much as all other generations combined. Currently, Gen Z already wields a staggering $200 billion in spending power, solidifying their position as a key demographic for travel retail.

However, to fully tap into this potential, the industry must evolve quickly to meet the demands of this purpose-driven, tech-savvy, and sustainability-focused generation. As Mohn concluded, “Travel retail must become more than just a place to shop—it should be an engaging, socially conscious destination that resonates deeply with Gen Z values.”

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