Move Aside, Millennials. Retailers Are Focused on Gen-Z Now
Millennials are getting old. We hate to break it to you, but it's the reality. They're now in their 20s and early-to-mid thirties, with kids, mortgages, and real jobs. And while that gives them incredible buying power, retailers are thinking ahead about the next-generation of shoppers, Gen-Z, and how to shift strategies in order to capture their attention.
A recent survey commissioned by American Express Canada and conducted by Nielsen found that while 51% of retailers claim a need to reach and understand this burgeoning generation, only 25% of those retailers currently market to Gen Z.
"While it is clear retailers' marketing efforts will likely continue to shift focus to Gen Z, there is a gap to bridge between Gen Z's unique needs and what retailers are doing," says Kerri-Ann Santaguida, Vice President and General Manager, Global Merchant and Network Services, American Express Canada. "There is an incredible opportunity for retailers who take action today, as the influence of this soon to be powerhouse generation continues to grow."
"While it is clear retailers' marketing efforts will likely continue to shift focus to Gen Z, there is a gap to bridge between Gen Z's unique needs and what retailers are doing, There is an incredible opportunity for retailers who take action today, as the influence of this soon to be powerhouse generation continues to grow." - Kerri-Ann Santaguida, Vice President and General Manager, Global Merchant and Network Services, American Express Canada.
Who Are Gen-Zers?
First, who are Gen-Zers? They are 15-22 years of age (or so) today. And they're very different from any other generation before them. While Millennials understand a world without smartphones, and some even the Internet, Gen-Zers know nothing but. They grew up with technologies like AI as a typical part of daily life. Sally Parrott, Head of Marketing at Aritzia, provided a cute example during a panel discussion called From A to Gen Z: How the Next Generation is Changing The Retail Game, at STORE 2019, the Retail Council of Canada's conference currently taking place in Toronto. She recently got off the SkyTrain in Vancouver. When the announcement was made noting which stop they were arriving at and the doors opened, her Gen-Z son turned and yelled into the air, "Thanks, Alexa!"
Everything Gen-Z has received has been highly curated, said Christian Bourque, Executive Vice President and Partner at Leger during his keynote entitled Never Mind Millennials...Here Comes Gen Z! Everything begins with a "my" something, whether it's "My Netflix, "My Spotify," or "My Specialized Coffee Order." "Their expectations will be based on if Netflix does it, everyone else should be able to," he said.
They are typically the children of Gen-Xers, the forgotten "sacrificed" generation that lives in the shadow of their Baby Boomer parents. Thus they tend to have a higher sense of entitlement that their parents transferred onto them, says Bourque. "They grew up with parents who were more concerned, challenged, and insecure about the future, and grew up thinking life would be tougher than the generation before them." They are the first generation to believe that their lives will be worse than their parents.
"They don't see a differentiation between their physical and digital worlds like others do. They go into stores and expect the experience to be seamless from what they were doing online. They seek that interaction because so much of the rest of their lives is online." - Sally Parrott, Head of Marketing, Aritzia
They think in terms of diversity and fluidity, culturally, ethnically, economically, even in terms of gender definitions and sexual orientation. "Whatever floats your boat is the number-one value of this generation," says Bourque. "There isn't a sense of ‘this is what we should be. We can be whatever we want, when we want.'"
Interestingly, 28% of Gen-Zers have suffered from depression, 52% claim to have anxiety problems, and 76% believe they have a mental health issue. Because of this, Bourque says that brands need to become anxiety relievers.
Gen-Z is grounded and financially-savvy, reports the aforementioned Nielsen study, with 72% currently saving money for their future, and 33% paying for 100% of their own expenses when shopping for personal items.
And despite what many believe, Gen-Zers actually prefer to shop in bricks-and-mortar stores over online. The Nielsen study found that 65% of Gen-Z want to shop in stores, more than double that (32%) who prefer shopping online. And more than half (51%) of Gen-Zers want to see and try a product before purchasing it.
"They grew up with parents who were more concerned, challenged, and insecure about the future, and grew up thinking life would be tougher than the generation before them." - Christian Bourque, Executive Vice President and Partner, Leger
Continue on to 12 tips for reaching Gen-Z shoppers...