Generation Z, or those born from 1997-2012, will be America’s largest generation by 2034, topping out at about 80 million. The oldest adult Gen Zers are already establishing potentially long-lasting earning and spending patterns, while the younger members of this demographic are still learning their first lessons about spending, saving and employer relations.
To understand how to market to and recruit from this generation, retailers must first understand that Gen Z is as unique as other generations, with their own likes and dislikes and characteristics. And they've also been shaped by growing up during the Great Recession and the economic uncertainty of the COVID-19 pandemic. For example, half of the older members of Gen Z say they or someone in their home had lost income or a job because of the COVID-19 pandemic, notably worse than other generations.
Below, I've laid out how retailers can improve their standing in the eyes of this future powerhouse generation, as well as other unique drivers behind Gen Z’s shopping and employment preferences.
Key Drivers of Gen Z Consumers
Value is king. The National Retail Federation (NRF) reports that 65 percent of Gen Z prefer value when they're deciding on a purchase, with more than half reporting they will buy from a competing brand if the original product’s quality is not up to par. However, "value" doesn’t just mean the product quality or price tag to Gen Z. Sixty-nine percent of this socially conscious generation are more likely to purchase from businesses that give back to social causes.
Retailers that want to attract Gen Z shoppers should ensure product quality is accurately reflected in pricing. Furthermore, they should conduct research into and align their business with the causes that are near to Gen Zers’ hearts.
Gen Z is also very practical. They're more likely than other generations to trade down — i.e., buy lower-priced, lower-quality, and/or unbranded products — for less critical product categories, harking back to the generation’s experience with difficult financial times. There are many ways retailers can take advantage of this characteristic. For example, retailers could advertise store-brand paper towels on social media platforms most popular with Gen Z, such as Snapchat, TikTok, and Instagram.
Key Drivers for Gen Z Employees
Pre-pandemic, many employers used work perks to attract younger employees, but the post-pandemic world is much different. Gen Z now prefers money-based incentives over perks from employers, a preference that can again likely be traced to their financially rocky childhoods. Retailers could offer employees bonuses and rewards structures for different employment milestones, and they need to make sure these benefits are clearly stated in the job listing to attract Gen Z applicants.
Eighty-seven percent of Gen Zers say that workplace diversity, equity and inclusion (DEI) strategies are very important. If a retailer doesn't already have DEI strategies and policies in place, they're woefully behind and will need to act quickly to correct their operations. Even for retailers that have already launched DEI strategies, there's always room for improvement.
Retailers should check out the Society for Human Resources Management (SHRM)’s DE&I guide to see how their own DEI efforts compare.
The same old marketing and recruitment strategies won’t work with Gen Z. To attract Gen Z shoppers, retailers should reevaluate the value of their products and promote lower-cost, everyday items. To attract Gen Z employees, retailers should offer monetary incentives and make sure their DEI policies are top notch.
Only then will they have a shot of earning the loyalty and respect of what will soon be the largest adult generation in the world.
David Wilkinson is president and general manager for retail at NCR Corp., a leader in banking and commerce solutions, powering incredible experiences that make life easier.