Gen Z Leads Australia's Physical Retail Revival as Chemist Warehouse Capitalises on “Friendfluence”

Australia's gen Z cohort is leading a retail revival, spending more time in-store than any age group.

According to a new Snapchat survey of over 2,000 Australians, 44% of gen Z increased their visits to physical stores over the past 12 months, nearly double the national average, and spent more money in physical stores than a year ago.

Snap Inc. ANZ managing director Ryan Ferguson said the research makes gen Z’s hunger for connection clear, and is powering a physical retail revival.

“Their purchase decisions are fundamentally social,” Ryan explained at an event in Sydney on Thursday. “Products are discovered, validated, and celebrated in the group chat, and the store is where it all comes to life.

“The brands that will win with this generation are not the ones optimising for the last click -- they’re the ones present throughout that conversation, from the first share to the final purchase."

The study found gen Z is finding value in the social connection and shared experiences physical retail experiences can offer, with shopping centres a place to spend time with friends, explore products, and make decisions collectively.

76% of gen Zs in Australia reported shopping physically creates memories online shopping can’t replicate, while 39% visit shopping locations specifically to spend time with friends.

While gen Z is increasingly choosing to buy in-store, their path to purchase begins well before they reach the checkout, Ryan said: in the groupchat.

Consumer behaviour and retail expert at Queensland University of Technology, professor Gary Mortimer, called the return of gen Z shoppers “welcome news for” retailers looking to rebuild foot traffic after years of pressure on physical stores.

"After predictions that online shopping would spell the end of the mall, gen Z is proving there is still plenty of life in the shopping trip,” Gary said.

“The data indicating older generations are less likely to frequent physical malls, favouring instead online, makes sense -- these consumer cohorts are often busy with careers, raising children and moving into retirement.

“But gen Z … may first hear about a product online, but stores give them the chance to touch, try and experience it for themselves, and to make an occasion of it with friends.

“More young people through the doors means more opportunities to create the fun, social experiences that keep them coming back.”

Gen Z Australians tend to discover items online before going into a physical location to test and purchase, with two in three noting a positive response in a private group chat has led them to buy in-store. When they try on clothes in change rooms, they are also engaging in a live, real-time group consultation digitally, before they reach the register.

This peer validation is what Snapchat calls “friendfluence”, and 31% of gen Z reported a private group chat is the first place they share an exciting new purchase.

Chemist Warehouse digital media and marketing lead Rohan Kohli said the findings point to a generation of social purchasers interested in the experience of shopping in-store.

“The experience that you're getting online is exactly what you're getting in store,” Rohan said of the brand’s social media presence, led by a former in-store employee now working with him at head office.

“Only 6% [of gen Z] is posting their purchases online publicly, but over 30% are actually sending it across to the group chats, which is quite interesting. As a retailer, that's where we want to be in the conversation, a part of the conversation authentically.

“There is a lot of advertising in the market, so you have to make sure you are relatable.”

The categories in which gen Z most commonly seek peer input are clothing (34%), skincare and haircare (29%), accessories (28%), and gaming (27%), all of which Snapchat noted speak directly to “how they look, how they present themselves, and how they spend time with friends”.