young shoppers

Recent reports have shown Generation Z to be complicated, diverse and contradicting, a tough market for companies to understand or appeal to. Still, a very young demographic, the generation is known for having grown up online, being socially conscious and highly engaged.

The next wave of consumers has been defined as “thrifty,” by the NPD Group, and are said to be more realistic than the idealistic Millennial. Additionally, new research by Klarna, found that 52 percent of Gen Zers believe they are “financially savvy” and 63 percent say technology enables them to better manage finances.

Caitlin Strandberg, principal at Lerer Hippeau, told WWD a large part of who Gen Z is, is being born into technology. By comparison, Millennials adopted the technology.

“They’re always on and always connected,” Strandberg said. “And that means that they’re hyper cognitive, so they’re incredibly resourceful and comfortable learning online. They’re happy to do research to figure out what is true and what isn’t.”

“Gen Z consumers are true digital natives, born into a world with technology,” said Jeff Saenger, vice president of customer success at Helpshift. “From a young age, they are consistently more educated about brands and with their phones at their fingertips, Gen Zers can find information not readily available.”

“Everyone and everything is just one click away,” Strandberg said. “Everything is very easy and convenient, and it almost changes how you view the world and how you interact with the world when you have this incredible resource with technology and the Internet. There’s good and bad to it.”

And Gen Z consumers were also shaped largely by the social-political climate they grew up in. As teenagers, they experienced the #MeToo movement and the Parkland shootings. And from a financial standpoint, Gen Zers came of age during the recession, compared to Millennials who had a slow start from the recession. Being born into a financial low, they are a more financially conscious consumer.

Studs' Hudson Yards location.

Studs’ has quickly gained popularity with the next generation with ear piercing.  TORY WILLIAMS

“As people, Gen Z is redefining the youth life stage,” said Jeff Howanek, associate head of U.S. Monitor at Kantar. “They’re raised by Gen X parents with a focus on resilience, realism and bias toward action and Gen Z aspire to become agents as they grapple at an early age with weighty social, cultural, and environmental issues. They’re a very pragmatic and mature generation for their age.”

This turmoil can be seen in the generation as a consumer as well, affecting the way they look at companies they interact with.

“When I think of Gen Z, I think they’re incredibly self-aware, incredibly self-reliant and realistic,” Strandberg said. “They’re deeply authentic, they’re incredibly empowered, and they’re actually increasingly entrepreneurial. The way we’ve seen Gen Z spend is incredibly different than Millennials. It’s a very interesting and special time where they’re a very different type of consumer. The tricks that worked with Millennials will not work with this group.”

Generation Z looks for the authenticity of not only a brand’s core values but of how actionable a company is to “do good.” “For Millennials, or others, whether it was doing good for the world by recycling plastic, or donating to a charity, having a social impact was more of a marketing campaign tactic,” Strandberg said.

“Even if you tick the right boxes in terms of platform, you’ll miss the mark if your positioning doesn’t align with their values,” Howanek said. “Marketing plans from when Millennials were young will not work with Gen Z.”

Moreover, Gen Z consumers are looking for brands they can trust. As a group, they are diverse, open-minded and socially responsible. They are looking to make the world a better place, and expect the same from retailers and brands in forms of business models built on sustainability, equality and acceptance.

“Gen Z will support those businesses that are doing it authentically and see it is part of a business’ core ethos,” Strandberg said. “It’s not going to be a choice, it’s going to be an expectation and the expectation has to be authentic and legitimate.”

“Gen Z is looking for brands who walk the walk and not just talk the talk,” said Michell Brisson, a consultant for U.S. Monitor at Kantar. “Gaining and keeping Gen Z’s trust requires brands to stay transparent and keep their promises. If a brand breaks a promise, Gen Zers have the power to call a brand out online — and they know it.”

Concurrently, Gen Z consumers hold social media micro-influencers and nano-influencers as a trusted source of information and recommendations. According to research by Kantar, 34 percent of Gen Z consumers have made a purchase because of a recommendation made by a celebrity compared to 44 percent from micro-influencers and 70 percent from nano-influencers.

“In general, Gen Z wants their online experience to be authentic and participatory,” said Brisson. “We’ve seen brands implement this into their strategies by offering social media challenges or collaboration opportunities between the brand and the [consumer]. Social strategy is not the one-to-many approach of yesterday. It’s an evolving, organic strategy that gives Gen Z a say in the matter.”

When it comes to communication with brands, this generation prefers an open two-way channel. In a survey by Helpshift, 86 percent of Gen Z consumers indicated that they would use messaging-based channels if they could get a response immediately.

“Many consumer experiences with chat-based support is through a session-based live chat where they must wait for an agent and remain in the chat window until resolution,” said Saenger. “A preference for e-mail may indicate that Gen Z consumers don’t want to wait around for a response.”

Gen Z is also quick to dismiss a brand that does not meet customer experience expectations, often sourcing similar products from another retailer online. Helpshift’s survey found that Gen Z has been the “most critical of retail” with 15.7 percent of Gen Z respondents indicating that “retail has the worst customer support of any industry.”

Though, characteristically compassionate, Gen Z might be more understanding and optimistic than older generations when it comes to customer service. According to Helpshift’s survey, 65 percent of Gen Zers feel that customer support has improved over the last two years, while only 30 percent of Baby Boomers indicated improvement.

“Building trust with Gen Z is about recognizing that businesses and brands no longer hold all of the cards, and trust will never be a given,” said Brisson. “Trust will need to be earned, one kept promise at a time in order to win with Gen Z.”

Strandberg, whose portfolio includes Gen Z consumer brands such as Parade, Studs, Wave and Otherland, among others, told WWD that when she looks to invest in brands that will appeal to Gen Z, they have to exhibit “three points of a triangle.” Meaning, products have to be high quality, prices need to be competitive and it has to do good for the world.

Flare bracelets

Flare had designed bracelets aimed at the Gen Z consumer.  Courtesy Image.

“You need all three corners,” said Strandberg. “If something is competitively priced and good for the world, but the quality is low, no one’s going to purchase it. And unfortunately, something competitively priced and high quality but it doesn’t do good for the world, it won’t hit [the Gen Z] demographic.”

Mission-driven founders are a great asset. Messaging will be authentic and consumers will have an easier time seeing the “do good” factor.

A new brand in Strandberg’s portfolio is Flare, a discreet safety bracelet founded by sexual assault survivors. The product itself is a smart bracelet, in gold, silver and rose gold, designed with a hidden button that provides the wearer communication when in an unsafe situation.

For More WWD Business News: 

The Aging Millennial

New Consumer Insights Report Reveals Gen Z Attitudes to Luxury Shopping

New Study by Walpole Finds Gen Z Is Just Like Us

WATCH: The Business of Street Style

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