Move over millennials, Generation Z are the new influencers. We all know millennials and how they’ve taken over the marketplace, but what about Gen Z? Known to be true digital natives born between 1998 to 2008, this group of consumers make up 26% of our population. With access to US$44 billion in purchasing power, this generation is poised to overtake millennials. Their unique consumer behaviour and patterns pose a new challenge for retailers and brands, and marketers cannot afford to undervalue this generation.
How can brands engage with the first generation of consumers who have never known a world without the Internet and social media? Being largely different from millennials, it is important marketers fully understand the Gen-Z perspective, understand their characteristics and figure out what resonates with them.
Here are 5 things you need to know about Gen Z consumer behaviours:
1. They are physical shoppers
Despite being dubbed digital natives, surprisingly, they prefer to shop in stores rather than shop online. According to a study by the National Retail Federation and IBM, 67% of Gen Z prefer to shop in-store rather than shop online. That being said, shopping at brick-and-mortar stores still needs to be complemented with technology. Nearly half (47%) of respondents use their smartphones when shopping in a store. Brands could benefit by ensuring stores are social media friendly and are equipped with technology. For instance, through introducing digital features such as augmented reality and gamification, brands can stay ahead of the curve by engaging these Gen Z shoppers and enhancing the brand experience for them.
2. They do their research
One key difference between millennials and Gen Z-ers lies in how well-informed they are even before they step into your store. More than any other generation, they research products online before they decide to make a purchase. This phase of the purchase cycle includes browsing reviews and checking out the brand’s social media pages. Brands should leverage this preference by reaching out to Gen Z shoppers during the online research phase. Providing product information in short-form video format and using live video in social media campaigns are great ways to earn engagement with this younger, Internet-savvy crowd.
3. They trust influencers more than traditional celebrities
Among all the consumer segments, Gen Z-ers trust traditional advertising and marketing the least. More than half of teens prefer brands marketed via social influencers rather than traditional TV commercials or sponsored articles, according to a report by Fullscreen. Brands can capitalise on genuine word-of-mouth marketing by tapping into the communities built by influencers. Collaboration with influencers to create compelling and snackable brand content is also one key way of engaging Generation Z.
4. They want to be independent
While loyalty programs may have worked well for millennial consumers, this generation of teens is not as keen on pledging their allegiance to any one brand. An Ernst & Young study found that only 30% of Gen Z consumers compared to 45% of millennials view loyalty programs positively. This subtle difference between the consumer groups points to a need for brands to further refine their marketing strategies to be more targeted. Research has shown that it takes tangible customer experiences, personalisation and meaningful face-to-face interaction with brands to win their loyalty.
5. They want to do good
Not only does Gen Z only feel a strong connection with society, they also desire to do good for the planet. Studies show that this generation are concerned about environmental issues and social causes such as racial, gender and income inequality. A majority of them (76%) care about humanity’s impact on our planet. Standing up for these social causes can differentiate your brand from others. With this generation willing to forgo their high salaries for that deeper sense of fulfilment, brands can no longer afford to ignore their social responsibilities.
As Gen Z comes of age, forward-thinking brands need to understand Gen Z characteristics and consumer behaviours in order to effectively market to this “always on”, truly digital demographic and remain relevant as a brand.