A new segment of consumers is taking over—and they’re known as Generation Z. Born in the mid 1990s-2010, Gen Zers today are becoming adults, and will account for 40% of global consumers this year. With a spending power of $143 billion in the US alone, they’re a force to be reckoned with.
Despite their purchasing power, building a relationship with Gen Z can be tricky. In this article, we’ll take a look at five strategies you can use to engage and retain this up-and-coming demographic.
Be Familiar
Raised in a time of societal disruptions, Gen Z craves familiarity. 85% of Gen Z will buy from familiar brands over new and non-mainstream ones. Building strong brand familiarity with the younger generation can be challenging, but here are a few ways to make your brand memorable to Gen Z.
Create a Connection With Online Communities: Build an emotional connection with Gen Z by creating an online community for them to connect with like-minded individuals. About 80% of Gen Z say they feel better understood about their passions by people within their specialized communities. Your community must be built on a narrow interest and have clear purpose and value. To energize your online community, create space for real conversations and encourage in-person interactions.
Consistent Social Media Engagement: Gen Z spends plenty of time on social media. Have a strong presence on YouTube, Instagram, and new platforms like TikTok , leveraging influencers to help you create relatable content. As one example, Walmart signed up six TikTok influencers for its #SavingsShuffle campaign.
Be Socially Conscious
Gen Zers are socially conscious and will spend money with brands that are committed to social values. Over 50% report that knowing a brand’s social consciousness influences their purchasing decisions. Below are a few things you can do to appeal to their spirit of activism.
Stand Up for a Cause: Support a cause that makes sense for your brand, and be clear about your stand. Consistently talk about what you stand for in your communications and show how you’re using your influence to make the world a better place.
Have a Strong Brand Purpose: Purpose is a brand filter for Gen Z, and 72% of them make purchases with purpose in mind. To capture Gen Z, embrace a brand purpose that goes beyond your product quality, aligns with your business, and includes a societal commitment. To stay authentic, ensure your brand purpose is based on your brand’s heritage and vision, and keep the messaging consistent.
Promote shared values: Turn Gen Z from passive consumers to active co-creators by inviting them to be part of a social cause that you support. Use social media to inspire them to volunteer or donate. Patagonia’s #CrudeAwakening campaign gave consumers the opportunity to help protect California’s coastline, and showcased Patagonia’s activist spirit.
Gated Offers
Gen Z will switch brands if the price is right. 38% would consider other alternatives that offer a lower price. To retain these young consumers, use gated content. Gated offers are exclusive promotions designed for members of a particular consumer segment. 94% of Gen Z will shop with a brand that offers gated offers more often. Keep the following in mind when considering gated offers:
Offer Evergreen Discounts: Offer discounts that are redeemable throughout the year and give either dollar or percentage amounts off. Add perks like free shipping and consider offering discounts that can be applied on top of other sales.
Remember Privacy: Gen Z is extremely sensitive about what kind of personal information they share online. When creating your gated offer, avoid collecting sensitive data such as credit card details. Use digital verification to determine the eligibility status of applications and apply discounts immediately.
Leverage Loyalty Programs
62% of Gen Z are influenced by loyalty programs. However, you won’t be able to engage them using a loyalty program designed for their parents. Below are some ideas you can use to make your loyalty program appealing to Gen Z.
Have a Paid Program: A paid loyalty program calls for consumers to pay a membership fee in exchange for perks. 77% of Gen Z respondents are willing to pay a premium to join such programs. Outdoor retailer REI offers a loyalty program that costs $20.
Use Gamification: 85% of Gen Z uses gamification, so research what kind of games Gen Z plays and see what you can include in your loyalty program to drive engagement. Use leaderboards and achievement badges to encourage competition, and include the use of hashtags and rewards to motivate social sharing.
Offer Alternative Rewards: Appeal to Gen Z’s need for instant gratification by offering them rewards that fit their needs. Dig into your data to find out what your young customers prioritize over monetary benefits (time and convenience might be high on that list) and see how you can reward them with it.
Rethink Brick and Mortar Stores
Despite never knowing a life without the internet, Gen Z is shopping in physical stores, and surprisingly, 81% of them prefers it. However, Gen Z has a different set of expectations when it comes to shopping in stores. Here’s how you can give them a pleasant in-store experience.
Omnichannel Capabilities: Gen Zers are omnichannel shoppers and 73% like to discover new products in stores. Include store maps and inventory in your mobile app to help young consumers find what they want and compare prices online. Also, offer ‘reserve online’, experiment with in-store services, and consider accepting payments through digital wallet systems.
Wellness: Gen Z is turning to brick and mortar retailing as a way to “disconnect” from the stresses of social media. Make your store a sanctuary for Gen Z by offering real-world wellness perks like fitness classes, book readings, or cooking classes.
Self-Service: Gen Z wants to be left alone while they shop. 42% of Gen Zers are annoyed by interactions with retail associates. Take a cue from Nike and use your mobile app to help young consumers search for and purchase products in-store without the help of a store associate. With the Nike App, customers can learn more about a product and try it on themselves. Consider including self-checkout processes and provide unattended retail channels such as vending machines and kiosks.
Are You Ready for Generation Z?
Gen Z is the next generation of consumers, and now is the time to start building a relationship if you want to win their loyalty. While mapping out strategies to retain Gen Z, remember they aren’t a one-size-fits-all group. So take time to understand their diversity and the drivers in each segment.
Good luck winning Generation Z!