This tech-savvy generation still loves to shop — but the expectations of this hyper-connected generation are upping the ante for retailers, online and off.
Move over Millennials. This Black Friday retailers are turning their attention to a brand new prize: Gen Z. The demographic born between 1997 and 2012 already boasts $150 billion in buying power — a number set to skyrocket in years ahead as almost 61 million of them enter the workforce.
But retailers are discovering that repeating the same-old formula (or even the new Millennial-friendly approaches) doesn’t necessarily fly with this fresh-faced, mobile-savvy camp. In fundamental ways, Gen Z is a distinct breed of shopper. Yes, they still shop at malls and they still splurge on the latest must-haves, but their underlying motivations, their expectations for customer service and their relationship with products has changed.
I’ve seen this up-close as the founder of an agency that helps ecommerce sites around the world connect with their audience. Here’s what we’ve learned about Gen Z from the frontlines.
They’re not just the consumer — they’re the content
The generation reared on social media naturally wants to be the star of the show, so it’s no surprise their most-prefered platforms are all about the visuals: Youtube, Instagram, Snapchat. And, with nearly six hours a day spent on their phones posting and streaming content, the pressure is on for brands to earn a spot in those carefully curated online narratives.
One way retailers that are resonating with Gen Z is by ditching the static ads featuring stale product shots in packages, and instead providing a platform for real users to showcase their purchases in the wild. For instance, Popsockets, a smartphone accessory producer that brought in $168 million in revenue last year, mixes posts of its customers in among its own editorial shots to share with a quarter-million-plus followers; Fenty Beauty (a popular makeup line which made $100 million in sales in its first 40 days of business) regularly re-grams examples from fans.
Offline, retailers capturing Gen Z’s attention are doing so by creating beautiful or interesting physical spaces tailor-made for Instagram, like Pura Vida Bracelets did with its converted Airstream trailer pop-up shop. The trick here is that these retailers have realized Gen Z is bypassing brands that try to dictate what they should buy in favour of those that provide enticing, interactive platforms where these young consumers can show off their goods as part of their own personal brands.
They’re not materialistic — but they kinda are
Gen Z shoppers value experience above all else. So whether retailers embrace tech (like Sephora did with augmented reality mirrors) or double down on real-life interactions (like Candytopia, a pop-up space designed purely for photo ops), or both, the emphasis is on giving Gen Z consumers an experience they can’t get anywhere else. But that doesn’t mean they don’t care about the products on offer — they just might not hold onto them for long.
Unlike Boomers or Millennials, Gen Z thinks nothing of buying a $400 sweatshirt and then selling it to fund their next social media moment the second it’s been ‘grammed. Streetwear brands like Kith or Supreme are famously fuelling this trend with limited edition product drops that have cemented their status as hashtag royalty. The goal here is to score one of their coveted designs, not necessarily wear it until it unravels.
Whether this shift in priorities makes Gen Z more or less materialistic than previous generation is hard to say. But the engineered scarcity and primacy of experience has led to a lucrative resale market that some argue is contributing to a more sustainable apparel industry, another core value of Gen Z.
They expect real responsiveness — in real time
While 60% of Gen Z shoppers describe their ideal brand as easy to contact, they don’t mean via the form email on your website, or even through direct social media messaging platforms. Gen Z is less likely to seek out customer support or submit feedback through formal channels than they are to voice their frustrations — or fandom — via hashtags and mentions on social media at large. This does present a challenge for companies that have to scan the ether of the internet for these bat signals (comments and mentions, both positive and negative), but companies that pull this off, particularly to solve customer complaints, stand to gain hero-like status among an utra-connected generation. ASOS is a great example of a brand that has gained adoration for its responsiveness and casual, playful tone — its customer service team’s rap response to a complaint on Facebook even went viral. Another industry setting the standard here is, interestingly, air travel: JetBlue, for one, boasts an average response time of under five minutes on social media.
But Gen Z doesn’t just expect to be reached on their turf when things go wrong. Capturing some of their famously short attention spans (reportedly just eight seconds) increasingly comes down to reaching them in real time across multiple platforms to give them insider access to products or deals — another thing Gen Z craves. Geo-targeting with a texted coupon or deal when a potential Gen Z client is walking by a physical location (like Starbucks and McDonalds do) can be one way to do it. And rewarding in-person experiences is another option: American Eagle, for example, offers loyalty points when its app detects that you’re in the changing room trying on merchandise.
The world may still be getting used to the influence of Millennials, but Gen Z is rapidly coming of age and putting their own stamp on consumer culture. The bottom line for retailers is that this generation expects engaging interactions with their favourite brands that go beyond the goal of simply making a sale. Is it a swerve from previous generations’ retail needs? Sure. But retailers that can pivot and embrace this change have a good chance of surviving until Gen Z’s successors are putting their own stamp on shopping.
Ben Crudo is the CEO of diff