Millennials are fast losing their reputation as being the biggest spending generation of the 21st century. Gen Z spending is already topping that generation and is predicted to hit $12 trillion by 2030. Any retailer hoping to capture a fair market share of this spending needs to understand Gen Z and carefully tailor their products, services, and marketing to meet the demands of this huge spending group.
Who is Gen Z?
First and foremost, retailers and CPG manufacturers must understand who this person is if they intend to garner their attention, trust and loyalty. Let’s dig into that first, shall we?
- They are digital natives, having had devices in their hands from their toddler years. They know how to find anything they want via the technology at their fingertips.
- They have uncompromising values. While millennials were satisfied with companies telling them how much they cared about diversity, inclusion, sustainability, and social responsibility, Gen Zers demand proof, and they will find that proof for themselves if necessary.
- They like personalized shopping experiences, both online and in-store. They want products, services and shopping tailored to their needs.
- They use social media channels (primarily Instagram, TikTok, YouTube,and Snapchat) to research products and services, tap into influencer recommendations, and make purchases. Indeed, social media has become a thriving marketplace for the Gen Z consumer. It’s called “social commerce,” and brands would do well to use it significantly. In fact, some research says that about 60% of these folks have made purchases via their social media accounts.
- They scope out sales and bargains, but they are willing to pay more if the brand meets their values and the product is durable/valuable.
What This Means for Retailers and CPG Companies
Omnichannel is the operative word here, because that is how Gen Z shops. And it wants both flexibility and convenience. Here is how that works:
- Increasingly popular are “click-and-collect” experiences. They order something online and pick it up at the store, when notified that the order is ready. And they can even have “reserved” parking spaces, notify of their arrival, and a clerk will deliver the order to the car.
- Retailers should have mobile apps for in-store experiences – store navigation, scanning product prices, access to product reviews, and checking inventory. They are pretty independent shoppers and don’t want or need a clerk following them around.
- As already pointed out, brands must go where their consumers are, and for Gen Z that is social media. Social commerce is here to stay for this generation.
What Influences Gen Z Purchasing Decisions?
Here is where the proverbial “rubber meets the road.” Gen Z consumers are picky and demanding. Here are the key influences as they make purchasing decisions:
- Their values. They want transparency and authenticity from brands they patronize. What’s your workforce look like? Does it reflect diversity in ethnic background and include other minority groups such as those from the queer population? Perhaps you should access the best queer dating app and learn about this population. Many Gen Zers are members of this community, and their spending power is rapidly reaching $1 billion.
- What is your outreach in terms of supporting causes of social justice? Make these activities a part of your marketing.
- How about sustainability? Are you using eco-friendly packaging? Are you mindful of sustainable sourcing? Say so, and prove it with facts in your marketing efforts.
- Sensitivity to pricing. Make no mistake about it. With their devices, Gen Z shoppers will compare prices, will read the fine print, and are probably the most savvy shoppers of any generation before them. While many are motivated by the lowest price, they will pay more for products and services from brands that adhere to their values and that offer what reviewers say are durable and valuable goods.
The task for all brands? Finding the right balance – the balance of values and ethics that Gen Z demands, quality, price, and the right technology to make it all come together with the right marketing. It’s a tall order, but the brands that get this right will be the winners.
