Perry Seelert, Co-Fouder and Strategic Partner, Emerge

Why you should care about Generation Z and what you should do.

While the retail industry has been obsessed with the Millennial generation, the way they shop, the way they work and how to reach them effectively, a new generation has stealthily come along that has people polarized. It is Generation Z (ages 6-24), born 1995 and after, it is the largest generation globally at 30%, and by 2020 over 40% of all consumers will come from this segment. In the U.S. alone there are 86 million+ Gen Zers, and their key generational “markers” are never knowing what life was really like before the internet and the smart phone. To say they are tech savvy is an understatement.

And I know what you are saying…”We just are getting a handle on Millennial marketing and you want me to think about this new generation?” Yes, Generation Z has merchants and marketers puzzled and highly divided, between those that are doing absolutely nothing to address this new generational consumer and those that are already on board and trying to court Gen Zers and their unique likes, dislikes and behaviors.

There are retailers already zeroing in on Gen Z

First of all, if you are in this “we aren’t addressing Gen Z yet” group, then look at the retailers who are already engaged, and maybe their examples will serve as a catalyst. Target, for one, has gone after Gen Zers as an important part of their own brand strategy, and three new brands they launched last year, Wild Fable (women’s fashion), Original Use (men’s fashion) and heyday (electronics with a modern aesthetic), are prime examples.

It is no accident in Target’s Gen Z thinking that the “#1 thing Gen Z shoppers look for in the products they buy is aesthetic, and 67% of this audience say fashionable design matters, more than any other generation.”

Another thing that is really important is who is standing behind or recommending a product, and it is the Youtube Influencer that plays a strong role in marketing. 70% of all Gen Zers spend 2 hours or more a day on Youtube, and as many as 54% say that Influencers are the best way to market a brand to them. Walmart recently leveraged all of this very proactively by joining up with Ryan’s ToysReview, the #1 Youtube influencer earning $22 million in 2018 and now toy inventor to launch an exclusive line of products.

There is a third retailer that is also uniquely merchandising to Gen Z. Just last year Macy’s changed their entire beauty services merchandising to suit Gen Z shoppers, moving from a brand-specific approach to create a more Sephora-like approach of an open selling environment (that is not brand specific). There are also YouCam Make-up magic mirror kiosks which allow customers to try on make-up virtually.

The way you reach them

Over 60% of Gen Z use a smartphone more than 5 hours a day, so when you talk about how to reach this audience, geofencing is a key marketing strategy to be considered. 53% of shoppers visited a store after a location based alert, and Whole Foods has utilized “geo-conquesting” to great effect, fencing many of their locations and providing special offers via smartphones.

Gen Zers are not just on-line shoppers as 66% of them prefer the in-store shopping experience, and another great way to reach them is through pop-up stores that embrace both experiential elements and technology together.

Four things to ask yourself Paying attention to and developing marketing strategies specifically for Gen Z shouldn’t be a polarizing topic, and there are four important questions to ask yourself:

• Do you have a clear understanding of how many Generation Z shoppers you have today and how many you might have tomorrow?
• Are your social strategies keeping up with this new audience? Target launched the heyday brand mentioned above via Snapchat. Yes, Snapchat.
• Do you employ enough experiential strategies like Pop-Up stores to attract this shopper?
• Have you employed geo-fencing for this tech savvy, smartphone loyal set of users?

It can be intimidating thinking beyond Millennials, especially since they have been the focus of so many industry presentations and pundits, but the time is now for examining your Gen Z strategies and honing them for the future.

Perry Seelert is retail branding and marketing expert, with a passion for challenging conventional strategy and truths. He is the Strategic Partner and Co-founder of Emerge, a strategic marketing consultancy dedicated to helping Retailers, Manufacturers and Services grow exponentially and differentiate with purpose. Please contact Perry at [email protected].