Teen Generation Z is being called 'millennials on steroids,' and that could be terrifying for retailers

REUTERS/Lucas Jackson

Retailers have been obsessed with millennials.

But now, they're scrambling to understand Generation Z, the teen generation. After all, teens are the future of retail.

"From a spending perspective [teens] are millennials on steroids," Marcie Merriman, executive director of growth strategy and retail innovation at Ernst & Young, told Business Insider.

A recent study by Ernst & Young sought to find out how the two groups of young people differ. The firm polled 1,000 adults and 400 teens.

It's important for companies to recognize the differences between the two generations, and how failing to do so could harm them.

Here are some crucial facts:

Teens are even more frugal than millennials, but in a different way.

Gen Z captures millennials' behavioral traits ... and then expands upon them.

"The things you see millennials doing when it comes to spending, Gen Z are just taking it to another level," Merriman said. "Millennials have been in the position of being frugal and very careful with their money."

Gen Z isn't just frugal — they're out to find the best value, Merriman said: "They look beyond just what the price says it is to what you're going to get for it [the price] — are you going to get free delivery? What other services come along with it?"

Gen Z doesn't shop online nearly as much as millennials.

Forty-nine percent of the teens surveyed shopped online once a month — and most of them don't even have credit cards yet. This number will increase, according to the study, once they get them.

Millennials shop online more, unsurprisingly: 74% of the millennials surveyed shopped online at least once a month.

Teens shop online for "efficiency purposes."

According to the survey, each generation had different reasons for shopping online.

Sixty-three percent of Gen Z-ers polled said that they shopped online because it "saves [them] time," whereas only 55% of millennials said the same. Fifty-three percent of Gen Z-ers surveyed said that "the selection is better online," whereas only 44% of millennials surveyed agreed with that statement.

Fifty percent of teens polled agreed with the statement that "the prices are lower online," and only 41% of millennials said the same. Thirty-four percent of teens said that the "products are organized [online] in a way that's easier to shop," and only 21% of millennials agreed with that statement.

Further, Ernst & Young concluded that "Gen Z is most likely to buy online for efficiency purposes."