As Millennials age, Generation Z—often shortened to “Gen Z”—will soon outpace them in buying power. Businesses must focus on what these incoming consumers value. After growing up during the recession, Gen Z is skeptical of most authority, and they value transparency and authenticity over almost everything else. To win their loyalty, you’ll need to tap into your company’s personal side. Download our eBook for a full collection of best practices that will help you engage this up-and-coming generation.
Because Generation Z has access to unlimited amounts of information, they want to verify everything they see or hear. If the data they’re looking for isn’t easily accessible, they are automatically skeptical. In contrast, if they see brands being open and honest in their advertising efforts, it becomes much easier to win their support.
Additionally, Gen Z is more exposed to word-of-mouth marketing than any generation before it—which means they rely on the opinions of the communities they trust. According to one survey, 86% of Gen Z reads online reviews before making a purchase, and 68% say they read three or more reviews. A brand’s consistent reputation matters, and Gen Z is diligent about gathering data before making decisions.
The collaboration and positive peer association allowed by the internet and social media tools are key to tapping into Gen Z’s buying power. In fact, one study found that 63% of Gen Z customers prefer to see “real people” in ads. Today’s businesses must accommodate and encourage initiatives that promote positive, authentic relationships with Gen Z buyers. They don’t trust an intangible caricature of a business executive taking their money—but if they can associate faces and positive feedback with brands, they’ll feel more comfortable.
As an example of an effective campaign, consider American Eagle’s lifestyle and underwear brand, Aerie, which banned retouching on all its promotional photos in 2014. In response, the company saw 18 consecutive quarters of double-digit growth, with same-store sales up by 14% in the first quarter of 2019. In contrast, Victoria’s Secret—a competing brand that has not implemented such forward-thinking changes—saw a five percent drop after the first quarter of 2019. Gen Z isn’t looking for airbrushed, flawless performances from their brands; they want companies that are genuine and relatable.
One key pillar of creating an authentic image is pursuing ethical, socially conscious initiatives—and empowering employees to do the same. Fifty-six percent of Gen Z consider themselves to be socially conscious, and more than 50% report that knowing a brand is socially conscious influences their purchasing decisions.
Companies that want to win consistent support from Gen Z must devise strategies based on a strong sense of identity, purpose, and values. To do this, some companies manufacture products from recycled materials, use fewer resources, or donate a portion of profits to worthy causes. These business models will become even more crucial over time as Gen Z grows into a stronger market force.
Is your organization prepared for Gen Z? Learn how to win their loyalty in our eBook.