Gen Z Turns to Google for Shopping Over Amazon, But That's Not Amazon's Only Problem

The landscape of online shopping is undergoing a significant transformation, with a notable shift in how younger generations discover and purchase products.

While Amazon has long dominated e-commerce, new trends indicate that Gen Z increasingly uses platforms like Google for shopping. This generational pivot, however, isn't the sole challenge facing the retail behemoth.

A host of other platforms are also vying for market share and impacting their stronghold in the digital marketplace.

Gen Z Shifts to Google for Shopping

Recent figures from Morgan Stanley show that those aged 16 to 24 increasingly use Google for a larger part of their online purchasing experience. This draws market share away from Amazon when individuals initially begin researching products online and already know which item they want.

By March, 30% of Gen Z buyers who knew what they wanted to purchase still began on Google – up from 21% in September 2024, according to Morgan Stanley's study, which looked at activity across Google Search, YouTube, and Gemini, as reported by Business Insider.

Although other online places, like Walmart and Facebook, have seen their share decrease, Amazon has suffered the largest impact. Its share fell from 41% in September to 34% in March.

The reason for the surge in Google searches for online shopping among younger people is unclear, although Morgan Stanley's analysts suggest the company's new generative AI tools could be involved.

How Google's AI Aims for Gen Z

Google has stated before that its AI Overviews have seen greater interaction from users aged 18 to 24. During the first-quarter earnings discussion in April, Google's chief business officer, Philipp Schindler, mentioned that the number of commercial searches on Google Search had risen following the introduction of AI Overviews.

During that same Q1 earnings call, Schindler also noted that the number of individuals shopping with Google's Lens feature had risen by 10%. Google has been acutely aware of the danger of losing younger users. The firm's previous Search chief, Prabhakar Raghavan, stated in 2023 that Google faced becoming irrelevant for young people, noting the company was called 'Grandpa Google.'

While ChatGPT's overall adoption is expanding, its use in online shopping remains limited, suggesting Google might hold it off with its generative AI functions. However, the story of Gen Z's shifting preferences extends beyond search engines and involves where they are making their purchases.

Gen Z's Go-To Shopping Destinations

The largest generation ever is making purchases through online marketplaces and social networks. These virtual outlets enable independent vendors to use the platform's digital space to offer their goods, though they handle the delivery themselves.

For Gen Z, marketplaces like ASOS, SHEIN, TikTok Shop, and Amazon have been very popular. According to a Statista report, three out of four Gen Z online shoppers worldwide made purchases on online marketplaces in 2022.

Marketplaces are not only very popular with buyers now, but they are also picking up speed. By 2030, marketplaces are set to provide over 50% of the growth within the US e-commerce sector, confirming their strong position in the digital retail sphere.

Engaging Gen Z Where They Shop

To connect with Gen Z, it's crucial to engage them where they are—or where they are making purchases. At present, young people are drawn to online marketplaces and social commerce platforms for their buying needs.

Therefore, selling on these channels—or several of them for the greatest impact—offers the most effective and affordable method to reach Gen Z all at once. By making the most of a platform's existing access to Gen Z, brands can reduce their advertising costs while gaining a fresh group of Gen Z buyers.