Retailers, it’s time to get your collective heads around Generation Z. This digitally savvy and demanding demographic is beginning to make its presence felt. Gen Z, or those born after 1995, already contributes $44 billion to the American economy each year. According to a report by advertising firm JWT, over 70 percent of parents say their Gen Z children have the power to influence buying decisions about apparel and family meals. In just a few years, nearly four in 10 consumers will be from Gen Z, and their purchasing power will rise exponentially over the next five years to seven years as they grow to be the single largest group of consumers worldwide.
Gen Z will be shopping differently than any other generation. Recent surveys have shown that this demographic doesn’t use technology in the same ways as twenty- and thirty-somethings. And it’s not surprising. Think about the technologies that have been created during this generation’s lifetime. Generation Z is digitally native. They're more comfortable with a smartphone than a landline; they prefer a tablet over a magazine; they've never known life without Google, the worldwide web, and on-demand/online TV shows. In short, they're incredibly tech savvy, and they expect retailers to be as well. Here are five ways retailers can reach Gen Z:
1. Keep digital messaging solid and consistent. Gen Zers are wizards with technology and lighting fast at finding out information. In the blink of an eye, they research a brand and make a decision about whether they want to shop before they’ve ever set foot in a store. It’s important that retailers maintain a consistent brand and user experience, both in-store and through each channel online, in order to appeal and properly market to this generation.
2. Internet stars trump Hollywood stars. Generation Z isn't impressed by what J-Lo, Kate Hudson or Selena Gomez are wearing. This generation is less influenced by pop stars and actors; it's moved more by internet stars who have organically built their own brands. Anyone see YouTube sensation Bethany Mota on “Dancing with the Stars”? YouTubers, fashion bloggers and other self-built social media stars grab the attention of this demographic. Therefore, brands should redefine marketing strategy and go after influencers with values and audiences that coincide with theirs. Those are the people who have the reach and authority to drive awareness and sales.
3. Have a social component. A business with a “feel good” or “do good” component is a natural fit for Gen Z. This group loves to support socially responsible brands that are making an impact on the world. A study by Marketo finds that 60 percent of this generation wants their jobs to make an impact on the world, and 76 percent are concerned with humanity’s impact on the planet. This generation responds well to businesses that have a social component, particularly ones that Gen Z views as positive and empowering.
4. Experiences matter more. Don’t weigh Generation Z down with a bunch of free stuff. They don’t want it. This generation values enriching experiences more than things. They would rather create memories than collect cash. At redpepper, we designed and enacted a successful campaign for jewelry store Claire’s called the Claire’s Project BFF. The campaign gave girls the chance to design their own pair of best friend necklaces via a web app.
Users were then encouraged to share their creations on social media and invite their friends to vote for their designs. Whoever garnered the most votes became Claire’s newest jewelry designer, with her necklaces featured on store shelves worldwide. Throughout the course of the month-long campaign, the Project BFF website saw 277,120 page views, with an average visit of more than four minutes. Social audiences boomed for Claire’s, with over 28,000 new Facebook followers and a follower boost of 27 percent on Instagram.
5. Compete on price. If ever a generation made up the mercenaries of the internet, this is the one. Gen Z has a particular prowess for hunting data. In the time it takes a baby boomer to figure out a new app on their iPhone, a Gen Zer has already conducted her research, evaluated pricing and made a purchase. Retailers need to keep an eye on their competition’s pricing and make sure they offer the most compelling price in order to lock in sales from Gen Zers.
Underscoring all of this is the need for retailers to grab Generation Z’s often-divided attention. Marketing messages need to be crisp, fast and simple — and they should rely more heavily on visuals than text. Instead of telling your brand’s story, be more concerned about starting a conversation with the Gen Z consumer. This young but important demographic wants brands to be authentic, get to know them, and cater to their needs. And when brands make the effort, Gen Z will help their holiday sales rise.
Samara Anderson is a business strategist at redpepper, a full-service, integrated advertising and marketing agency.