Mar 13, 2017
Over the past several years, marketers across all industries and categories have become obsessed with Millennials—what are the best ways to reach them and help them form meaningful connections with brands? Because Millennials have a unique sense of self and a non-traditional approach to life stages, marketing to this captivating generation has been a challenge. Marketers are only just beginning to understand Millennials, but there’s a whole new game in town with the rise of Generation Z. This is the first generation of consumers that was born into a digital world, and these individuals don’t know life without the Internet, smartphones, tablets, and social media. What are the best ways to engage with this up-and-coming and always-on generation?
Although generational start and end dates are imprecise, Millennials—also called Generation Y—generally include those individuals born between the early 1980s and the mid-1990s. Meanwhile, Generation Z individuals—also called Post-Millennials or the iGeneration—were born after 1995. As yet, there is little consensus about ending birth years for this group. Millennials were coming into young adulthood at the turn of the century, and the oldest of this group are now about 35. Some have been in the workforce for quite some time and have already begun to reshape Corporate America. The oldest Gen Z individuals are only beginning to graduate from high school/college and enter the professional workforce, so only time will tell what changes this group will bring to the workforce of tomorrow. Gen Zers may be too young to have affected the workplace as yet, but they are already having a profound impact on family purchasing habits and the retail marketplace.
In January 2017, IBM and the National Retail Foundation released a report entitled Uniquely Generation Z: What Brands Should Know About Today’s Youngest Consumers. This report surveyed over 15,000 Gen Z individuals between the ages of 13 and 21 and also conducted interviews with 20 Senior Marketing Executives to determine how these consumers engage with brands. As this generation continues to come of age, they will have a major impact on future communication strategies.
Generation Z consumers typically exhibit a number of distinct characteristics:
- Always On: As the first true digital natives, Gen Zers have never known a world without the Internet and mobile devices. Whereas Millennials are old enough to remember slow Internet dial-ups, Gen Z consumers are less tolerant of technological glitches. These individuals are extremely comfortable with technology and have high expectations in terms of performance—they have little patience for experiences that are unresponsive or error-prone. According to the Uniquely Generation Z report, 62% of surveyed Gen Zers will not use an app or website that is difficult to navigate, and 60% will not use an app/website that is slow to load.
- Born Multitaskers: According to Small Business Trends, Gen Z consumers multitask across at least five screens a day. While technology seems to move at a dizzying pace for some of the older generations, Gen Z consumers take innovations for granted because they’ve grown up with them. They don’t distinguish between online and offline channels in the way that older generations might, and they expect to move seamlessly between the physical and digital worlds. 17% of surveyed Gen Zers report using their devices for shopping and browsing, and this share will likely increase as these consumers get older and do more of their own shopping. This means that the brand experience must be consistent, overarching, and seamless across all platforms, including the physical retail store as well as digital, print, and mobile communications.
- Smart Shoppers: Gen Zers can’t remember a time when they didn’t have 24/7 access to the Internet, so they’re used to obtaining answers to their questions with just a few clicks. They live online and share details of their lives across dozens of platforms, disclosing their likes and dislikes for the rest of the world to see with tweets, photos, and status updates. Constant access to information and opinions (e.g., product specifications, vendor ratings, and online reviews) has enabled Gen Z consumers to become smarter shoppers. Furthermore, due to the tumultuous times during which they were raised, this generation is already very conscious about quality and getting the best value for their money. Despite their youth, Gen Zers are pragmatic, well-informed, and value-conscious when making purchasing decisions. By understanding and addressing their preferences, retailers can cultivate mutually beneficial relationships with loyalty programs that feature discounts and other perks.
- Short Attention Span: If you thought Millennials had a short attention span, you haven’t seen anything yet! Whereas Millennials take an average of 12 seconds to determine if something is worth their attention, Gen Zers take a mere 8 seconds (source: VisionCritical). Because Gen Z consumers have such short attention spans, marketers must ensure that their messaging can be quickly comprehended. This means printed content with full color, special effects, unique inks and substrates, and bold designs. Meanwhile, digital content must be attention-grabbing, glitch-free, and seamlessly connected with print, mobile, and other communications. Having grown up with digital, many Gen Zers have replaced words with emojis, pictures, videos, and GIFs to make their communications fast and visual. Regardless of format, all messaging must be engaging and “snackable.”
- Cyber-Savvy: Having grown up with well-publicized news coverage of terrorism and cyberattacks. Gen Z consumers understand the importance of privacy and security and are often more cautious than Millennials when it comes to sharing their sensitive personal information. Although 62% of surveyed Gen Zers were willing to share their purchasing history with a favorite brand, only 21% would be comfortable sharing personal life information. Furthermore, only 18% were willing to share their payment information. Retailers must understand these preferences and sensitivities when marketing to young consumers. Gen Z consumers expect brands to be transparent about how their personal data will be stored and used. If a brand does not demonstrate an ability to safeguard sensitive personal information, Gen Zers may not disclose it. The paradox is that although a personalized retail experience can be a key differentiator for Gen Z shoppers, these consumers are cautious about disclosing the personal data that is necessary to create an engaging and individualized shopping experience.
- Significant Influencers of Purchases: Although most Gen Z consumers will of course have limited spending power due to their youth, retail establishments should not underestimate the influence that these individuals wield over family purchases—even big ticket items. In fact, over 65% of surveyed Gen Zers report influencing how their families spend money on furniture, household goods, and travel. Although their funds are often limited today, Gen Z consumers are already developing shopping habits that will likely continue into adulthood.
- Retail Locations Remain Important: Despite their digital roots, 98% of Generation Z consumers still make purchases traditional brick & mortar stores. This might be partially due to their youth and lack of access to credit cards, but it is probably also related to their pragmatic attitudes about the shopping experience. Although they expect an omni-channel experience that transcends physical and online locations, Gen Z consumers care strongly about “retail basics” like product quality, availability, and value. 65% of surveyed Gen Zers expect to get real value for their money with discounts, coupons, or rewards programs.
It’s never too soon to develop a better understanding of Generation Z consumers—they are already having a profound influence on their families’ shopping behaviors and will become an even more important marketing target in the coming years. Despite their youth, Gen Zers are mature beyond their years when making purchasing decisions. Understanding their preferences and behaviors is the best way to deliver the communication strategies that will reach and engage this up-and-coming group.
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