Gen Z - The Next Influential Consumer Market
Don’t be fooled by their seemingly nonchalant and altruistic façade, Gen Z are the next influential consumer market and they’re more switched on than they’re being given credit for.
A hot topic of discussion around The Barn at the moment is how the next consumer generation, Gen Z, are starting to spend and what that looks like for retail, so we were excited to see that it’s a part of the programme at the Retail Design Expo next week (it’s called Getting under the skin of Gen Z – 2 May 3pm, if you want to meet us there).
One of the biggest misconceptions when it comes to Gen Z is that they’re Millennials on steroids, which is actually not the case. Of course, there are some overlapping parts to the generational Venn diagram (self-confidence, technological arrogance & bleeding-heart altruism) but there’s some key behavioural differences which are going to require a varied approach when reaching this generation.
It’s important to realise while Gen Z’s are altruistic they’re not naïve (a trait which is commonly associated with Millennials), their altruism comes on a micro level as opposed to a macro one. Their overtly confident in their ability to bring themselves happiness, but less optimistic about broader societal issues such as the environment, world economics and politics. In other words, they believe the buck stops with them, a perception different to expectant Millennials.
They’re the first generation to be born in to technology, not adopt it, so not only are they technologically savvy (insert joke about kids swiping before talking), they consume their information online as opposed to older technologies such as TV & radio. They’re the “on-demand” generation, not wowed or impressed by technology and are said to have the ability to consume information much faster than previous generations. Research studies by US innovation firm Altitude found that Gen Z’s 8 second attention span is more like a highly-evolved information filter than an inability to focus, enabling them to sort through copious amounts of information in search of what suits their interests.
They also have an adversity to luxury or high-end products, a preference moulded by their desire for unique style and a moral compass which points towards ethical, organic, slower-produced products. While Millennials enjoy a “see it, buy it” mentality, Gen Z’s want to know the who/what/when/why/how of their product purchases and if they don’t meet their standards they won’t play.
Lastly, Gen Z are savers, not spenders. This doesn’t come as a surprise when you consider the above characteristics. Growing up in an economically unstable world, they’re aware that things that were once considered everyday like buying a house or job stability, are now being considered luxuries in an unpredictable economic and political landscape; a lesson most Millennials unfortunately learnt a little too late. They’re cautious; impulse purchases are not their game.
But what does all this mean for retail? There’s only preliminary data available at the moment as Gen Z are only just becoming participating consumers, but it’s clear there are some trends to considers in order not to lose their business.
Bring them in to the decision-making process, don’t spoon feed them or take their seemingly short attention spans for granted. They live by the “all that glitters is not gold” mentality, so the bright lights of traditional marketing and advertising won’t impress them. Remember you’re catering to a generation that thinks it’s seen it all, it’s time to redefine the once relevant “surprise & delight” approach. Creativity should be your best friend, don’t let it take a back seat.
They want the hunt, so give it to them. It’s not about bargains but individual style. They know if it’s easily available to them then it is to everyone else too which goes against their desire to be individuals. This is a great opportunity to build brand loyalty, unlocking exclusive collections and experiences to those who are repetitively engaging with your brand; think quality, not quantity.
Lastly, meet them at the start, which for Gen Z is their mobile or tablet. Give time and resources to creating an end-to-end customer experience that satiates Gen Z’s desires for bespoke, ethical, technologically centred interactions, starting online but with the end goal of bringing them in store. Ask questions like “which sales are best done online vs in-store?” and build the perfect customer journey from there.
Remember bricks & mortar stores are not dead, they’re just in a period of transition and those who move with the tides of generational consumerism will grow, those who don’t will become collateral consumer damage of a generation that isn’t shy in saying what they want, so be sure to listen closely.