Baby boomers, Gen X, Millennials, and Gen Z; each new generation has their own attitudes, beliefs, and behaviors towards shopping. Gen Z, people born between 1995 and 2010, commands $143 billion in buying power. This is almost 40 percent of all consumer shopping. Half of this generation has not even entered the job market yet. Gen Z’s impact does not stop here. According to parents of the Gen Z generation, ninety-three percent of the parents say that their children influence household spendings. Almost three-fourths of the parents ask their Gen Z children for their advice before they make purchasing decisions. Gen Z thus has a lot of influence in today’s consumer market.

Digital natives

Gen Z has grown up in a digital world, which has made technology the center of their lives. Gen Z has integrated social media and technology into their everyday lives. This generation uses more than one device at the same time; they have to be connected at all times (Goldring & Azab, 2020). This means that they may be watching TV while checking their smartphones while doing a homework assignment. These different technologies are intertwined in their lives and result in ultra-distractedness. Because of all the distractions Gen Z is facing, it is difficult to get and maintain the attention of Gen Z. Gen Z’s attention span is only 8 seconds, which is even less than Millennials’ 12-second attention span. Omnichannel marketing is crucial, as Gen Z expects to consume products at any time and place. It is crucial to be everywhere where Gen Z may want to shop or gain information. Social media, apps, stores, advertisements; companies have to be in all places. Omnichannel marketing is important to attract attention on different platforms and to have more touchpoints where potential customers can come in touch with your brand. Being active on all relevant touchpoints means that a brand has more ways to attract Gen Z’s attention.

Digital-first consumers

Gen Z is exposed to products on social media all day long. When they have found an interesting new product on Instagram, they will head to YouTube to see reviews. Or they will read the reviews of other customers on the website of the brand. This is what we call a ‘digital first consumer’. Digital consumers use digital media as their preferred first source to acquire information when they are making purchasing decisions. However, digital first consumers are not just Gen Z; Millennials, Generation X, and baby boomers will search online for information as well. Because of the importance of searching for product information online, companies need to have all the necessary information out there. Companies have to control the narrative about their products. That is why, as a company, it is important to reply to reviews and comments, both good and bad ones. 

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Gen Z in retail

What does Gen Z value from brands?

Gen Z expects personalization 

Personalization is key to getting the attention of Gen Z. According to Smith (2017), personalization is valued by Gen Z not only for entertainment but also to provide them with relevant information. If Gen Z gets personal benefits from personalization, they are more likely to give marketers more access to their personal information. Tailored product suggestions are also valued by Gen Z (Smith, 2017). Tailored suggestions allow Gen Z consumers to spend less time searching for products. A personalized shopping experience is valued because Gen Z’s needs are attended to. 54 percent of Gen Z consumers feel special when the content they receive is aligned with their individual needs. Valuing their individual needs will show them that a company understands them.

Personal data is needed for personalization. Bear in mind that Gen Z does value their privacy. Interactions Consumer Experience Marketing (2016) found that fifty-nine percent of Gen Z consumers avoid shopping at a retailer that has been hit by security breaches. Because Gen Z grew up in the digital world, they know better than anyone that what goes on the web, stays on the web. 

That is why it is vital to be transparent about collecting Gen Z consumers’ data. Building trust is important. Show that, as a company, you are taking the appropriate measures to protect personal data. Emphasize that you are committed to keeping their data safe. This will make Gen Z consumers feel like they can trust their data to your company. 

Interaction and engagement

Older generations, such as baby boomers and Generation X, often got one-way communications from brands. There was no possibility to directly reply to an advertisement in a newspaper or a TV commercial. Nowadays, two-way interaction and engagement are essential for companies as well as for customers. Gen Z is eager to interact with its favorite brands. For Gen Z to interact with a brand, their videos, advertisements, blog posts, and social media posts need to be interesting, visually appealing, and engaging. Furthermore, customers will engage more, if the brand engages with them as well. Engagement and interaction build brand loyalty, customer retention, and a community. To attract Gen Z, interaction and engagement should be a central element in a company’s marketing strategy. Besides, engaging with customers will allow a company to learn from them. Interacting with customers provides a gold mine of information. 

Gen Z values interaction. This means that they want to feel like they are talking to another person at the other side of the screen. Standardized, automated, and generalized messages are not appreciated by Gen Z. Companies have to make sure that their replies to consumers are ‘on brand’, while still making the replies personal. When customers feel like the company ‘knows’ them, they are more likely to interact more with your brand. By addressing them in a personal way, they can become brand advocates for your company. 

Authentic brands 

Gen Z values brands that are trustworthy, transparent, and authentic. Goldring and Azab (202) go on to argue that Gen Z expects companies to provide an authentic brand with a reliable outlet of information. This means that interactions and engagement with customers have to be authentic. The Shelf Team (2020) argues that when brands do not use photo-editing, customers will see them as more authentic. What also contributes to a more authentic brand identity is the use of influencers as well as happy customers. Influencers and customers are easier to identify with than celebrities. Customers will see influencers and customers as their ‘friends’ and they will trust their opinions to be authentic. 

Gen Z expects brands to “take a stand”

Gen Z not only looks at whether or not a product or service is within their budget. Gen Z is also interested in what a brand stands for and what its view is on societal issues. The reason for this being that Gen Z is interested in societal issues themselves and stands up for these issues when needed. Francis & Hoefel (2018) argue that it is important for brands to choose issues that fit with the brand and take a stance towards these issues. They argue that, for Gen Z consumers, it is important that “a company’s actions (…) match[es] its ideals, and those ideals must permeate the entire stakeholder system” (Francis & Hoefel, 2018).        

Saying that, as a company, you find certain issues important is not enough. Gen Z values companies that act according to their values. These digital natives will find out when the company’s actions do not match the issues they say they support. This can go as far as getting “your brand name slandered all across social media” (The Shelf Team, 2020). Gen Z is not scared to share their opinion. As a company, you do not want that, since that will be bad for your brand identity and your perceived authenticity. So, if your company has not yet taken a clear stance towards several societal issues that fit your brand, you need to take a clear stance. Whereas older generations may have condoned a refusal of taking a stance, Gen Z consumers will not accept it if your brand does not take a stance. 

Why does Gen Z shop?

Central to Gen Z consumers is their expression of their individual identity. For Gen Z, consumption becomes a way of self-expression. Gen Z is willing to spend more money on products that show their individuality. According to Interactions Consumer Experience Marketing (2016), seventy-seven percent of Gen Z consumers prefer unique products over popular products. This is in line with the need they feel to express their individual identity. Expressing their own identity has also become important as a result of societal issues regarding inequality. Gen Z is actively concerned with inequality and racism.

What is different between Millennials and Gen Z is that, for Gen Z, money is a huge motivator. That is why they already start working while they are still in school. Many millennials, on the other hand, did not work while studying. Gen Z has a different mindset than previous generations. According to The Shelf Team (2020), Gen Z will find ways to increase their incomes so they can buy products that they really want. For companies, it is important to find ways to make their products attractive to Gen Z. Because, if they find it attractive, they will find a way to buy it. 

How to do business with Gen Z?

The digital natives are active all over the internet. They use multiple devices at once, which results in a short attention span. With an attention span that is even shorter than Millennials’ attention span, every moment counts when marketing to Gen Z. That is why it is important that, as a brand, you use their precious time carefully. The brand’s content must be tailored towards Gen Z. Visually appealing content makes it interesting for Gen Z to focus their attention span on your company’s content. A brand’s content should immediately attract Gen Z’s attention; otherwise, they move on to other brands that use more attractive content. Whereas older generations sometimes discuss TV advertisements when they see them, Gen Z oftentimes cannot even remember the advertisements that were played during the breaks of the show that is on TV. The reason for this is that the advertisements are either not attention-grabbing or that Gen Z is focusing their attention on the other devices which they are using simultaneously. 

Interact and engage with Gen Z across all touchpoints with them. They value the personalized engagement of brands. So, when Gen Z leaves reviews of a product or service, it is important to respond to them. When the reviews are bad; help them to find a solution and listen to their problems. This is beneficial for both the customers as well as for the company itself. Solving a problem will result in customers becoming brand advocates. For companies, it will be beneficial since potential future customers value other customers’ opinions. Other peer customers’ opinions about products are a vital element of consumers’ purchasing decisions (Dabija & Lung, 2019). If there are only bad reviews, without replies from the company, potential customers will turn away towards other brands that are more valued by their peers. Gen Z is not afraid to vocalize their opinions, which is why companies must act upon that.

Whereas in the beginning, marketers thought Gen Z was an extension of Millennials, Gen Z is a very different generation. Companies should not underestimate the power of Gen Z on the consumer market. Even though Gen Z consists of young people, they have a big influence on the entire consumer market. They control 40 percent of the market, and they influence other generations as well. Gen Z can be seen as a generation of influencers, sharing their honest opinions with others and advising their parents on purchasing decisions. That is why it is of vital importance for companies to adjust their marketing strategy. Gen Z will make up even more of the consumer market when they get older, which means that it is important to have a marketing strategy ready for them. 

Bibliography

Dabija, D.-C., & Lung, L. (2019). Millennials Versus Gen Z: Online Shopping Behaviour in an Emerging Market. In: Văduva, S., Fotea, I., Văduva, L., & Wilt, R. (eds.), Applied Ethics for Entrepreneurial Success: Recommendations for the Developing World. GSMAC 2018. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-17215-2_1

Francis, T., & Hoefel, F. (2020, December 16). ‘True gen’: Generation z and its implications for companies. McKinsey & Company. 

Goldring, D., & Azab, C. (2020). New rules of social media shopping: Personality differences of U.S. gen z versus gen x market mavens. Journal of Consumer Behaviour. Published. https://doi.org/10.1002/cb.1893

Interactions Consumer Experience Marketing. (2016, July). The next generation of retail.

Smith, K. T. (2017). Mobile advertising to Digital Natives: preferences on content, style, personalization, and functionality. Journal of Strategic Marketing, 27(1), 67–80. https://doi.org/10.1080/0965254x.2017.1384043