As a business, reaching a broad set of audiences is important for discovering new customers and driving continuous sales. While millennials are currently the largest group of consumers in terms of size and baby boomers still hold the title for strongest purchasing power, this will likely change in the next 10 years. The Gen Z population is on the rise and is expected to reach its peak in the coming decade as the most powerful consumer. In preparation, smart brands are beginning to experiment with how to reach and appeal to this growing group of young consumers.
Who are the Gen Z?
The exact definition and range of Gen Z is still unclear, but generally speaking, a Gen Z is typically born from 1996 onward to roughly 24 years old. Often said to be the most entitled generation, this population group is largely criticized for being impatient, addicted to technology and rebellious. However, what they really are is misunderstood.
As a society, we have to understand that Gen Zers grew up in a completely different era where technology and social media were the norms. Unlike millennials who transitioned into technology, Gen Z has always had access to the internet at their fingertips. With thousands of online retailers to choose from, it has become harder than ever for retailers to capture consumer attention and loyalty.
As a retailer, it’s important to put yourself in their shoes and understand what drives and motivates this young group of consumers. To reach Gen Z, here are some common characteristics about them that you should know:
- They are digital natives. Naturally, Gen Z are the most technologically savvy generation. They appreciate innovation and any piece of technology that can make their lives more efficient and convenient.
- They are willing to break the rules. Known to be a rebellious generation, Gen Zers are unafraid to challenge traditional norms and push for change. That’s why we see more Gen Z breaking away from the corporate mindset and writing their own new rules.
- They want to be heard. All customers want to be seen and heard, especially the Gen Z population. They seek meaningful purpose and connections, which translates to the brands they engage with.
- They are strong, loud advocates. Falling in line with their rebellious tendencies, Gen Z is willing to speak up loud for social causes and issues they care about. This makes them great brand ambassadors for purpose-driven brands.
With these characteristics in mind, you can better understand how Gen Z shops and how you can reach this rising generation of consumers.
Gen Z are multi-dimensional shoppers
One of the most notable differences between Gen Z and other shoppers is that they have far more checkboxes to cross off before making a purchase. Generally speaking, consumer shopping has always been fairly simple. There are two main factors people look at: price and quality. If it meets a customer’s price point and level of desired quality, that is usually all it takes to make a purchase.
With Gen Z however, the decision is far more complex and multi-dimensional. They will consider a number of additional factors, like if the brand mission and purpose align with them, how novel the product is and how much the purchase will influence their social status.
As a retailer, you must consider what your brand value is beyond monetary factors. Offering the lowest price is no longer enough to attract this group of consumers. Gen Zers want to see that your brand has a purpose and story that they can relate to. They would even often pay more for brands that align closest to their values.
Gen Z are willing to spend on luxury and status
Beyond their willingness to spend more on purpose-driven brands, Gen Zers will also pay more for luxury and status. However, their definition of high-end luxury and social status is different from what we’ve known.
Traditionally, luxury has been defined by a small, exclusive set of brands with products priced in well over the thousands. For Gen Z, it seems as though the bar for luxury has lowered to anything priced more than their typical purchases. With the prices of essential items rising and inflation soaring, Gen Zers are spending more cautiously and consciously. Anything above their typical purchases could be considered a luxury in their eyes.
A part of what makes a luxury brand is also the social status that it provides. Previous generations have often associated luxury with the desire to show wealth. For Gen Z, it’s less about showing off that they can afford an expensive item and more about how unique and trendy they are.
As you consider your marketing and business strategy, think about how you can set yourself apart from competitors beyond price and quality. Consider your brand’s social influence and what a luxury experience means.
Gen Z values innovation and newness
In combination with their reliance on technology and desire for social influence, Gen Zers are also becoming less loyal. With more choices than ever, this generation of trend seekers is constantly on the lookout for the most interesting and innovative brand. That’s why many industries like health and beauty, have seen a large surge in niche brands over the years. Gen Zers are constantly seeking new brands to try in hopes of being the ones to discover the next big trend. However, this also makes it harder than ever to capture loyalty.
Retailers, like you, need to stay fresh and innovative with their marketing and branding strategies to attract new customers. This could simply look like keeping your messaging up-to-date and evolving your customer experience. For instance, several brands have begun experimenting with incorporating crypto and NFT elements into their marketing programs. This offers a unique and innovative experience that captures the attention of Gen Z consumers.
Understanding Gen Z will win them over
Gen Z is a group of people that simply want to be heard and acknowledged, just like any other consumer. Showing that you deeply understand their values and motivators will ultimately win them over.
Especially with how driven they are to seek a larger purpose and belonging, it’s important that you challenge yourself to think about what your brand offers beyond price and quality. How does your brand make consumers feel? Are you offering a unique experience? How innovative are your marketing and branding strategies? Answer these questions and you could win over this next generation of powerful consumers.