Gen Z is set to become the most crucial generation to the future of retail. Defined as those born between 1995 and 2010, the demographic estimates at two billion globally and the vast majority are just years away from full financial independence.
Most retailers are familiar with the general behavior of Gen Z consumers. They are seen as tech-obsessed and focused on building their own personal brand. However, retailers need to set aside their preconceptions and stereotypes to successfully capture their attention. There are major opportunities to leverage the spending power of Gen Z, but without empathy and understanding, brands risk being dismissed as insignificant.
It is no longer just about selling items that feed into self-interests or relying on celebrity influencer marketing. There is another side to Gen Z that retailers need to consider. Developing a deeper understanding from a demographic and psychological standpoint is key to cementing loyalty from both sides of the spectrum.
We spoke with Cassandra Napoli, Digital Media & Marketing Editor at WGSN about the concerns and influences of Gen Z, the two micro-segments identified within this generation, and how marketers can bridge the gap to create authentic and lifelong connections with Gen Z consumers.
Hi Cassandra, tell us a little bit about WGSN and what you do there.
WGSN is the leading global trend forecasting authority currently celebrating its 20th year in business. I write for WGSN Insight, the consumer and market intelligence platform which launched back in October 2016. I cover the media and marketing vertical and am responsible for scouring the globe in search of the latest and greatest trends that represent the very best ways brands are communicating with their customers from out-of-home (OOH) to social media, and everything in between.
"This cohort is multifaceted with very distinct feelings, ambitions and rituals."
You recently spoke directly to 16 - 21 year olds with diverse backgrounds from all over the world to get a true insight into their lives; what surprised you most about this generation?
Conducting a focus group has really helped us to identity how problematic it is to simply bucket Gen Z under one blanket description. This cohort is multifaceted with very distinct feelings, ambitions and rituals. At the same time, it’s crucial to understand that there are two cohorts under the Gen Z umbrella and they are not so cut and dry, ‘Gen Me’ and ‘Gen We’. Both segments are deeply divided, but that’s not to say they are incapable of seeing each other’s sides and opinions. In fact, it’s quite the opposite. Gen Z’s fluid nature enables them to acknowledge and listen to the other side’s arguments and beliefs, free flowing along the spectrum and — either self-willing or unconsciously — contradicting themselves.
"Gen Z’s fluid nature enables them to acknowledge and listen to the other side’s arguments and beliefs, free flowing along the spectrum and — either self-willing or unconsciously — contradicting themselves."
You mention two segments — ‘Gen Me’ and ‘Gen We’. Can you briefly explain the differences between the two and why this is important for retail marketers to understand?
While we say they are deeply divided, with unique characteristics, they are a fluid bunch that understands each other and the many contradictions that encompass them.
To make matters simple, you might want to revert over to our Me to We infographic our latest white paper. For example, Gen Me are a selfie-obsessed group that have a similar look to them which stems from the Instagram effect, meaning: the camera is most critical. On the other hand, Gen We are looking to use their voices to speak up and out both online and in real-life settings, meaning: the keyboard would service them more.
Gen Me uses social as a path to escape from the pressures of reality, while Gen We are more rooted in optimism, using social media to advocate for the change they wish to see. Retail marketers need to understand that:
- ‘Gen Me’ is already documented and marketed to by the majority of brands. They are the larger sector within the Gen Z cohort, driven by style and status. They essentially have two identities —- their true selves and the glossy and filtered version of themselves that they share online. But that’s not to say they are not in touch with reality. This group is entrepreneurial-minded and they’re self-starters, effectively monetizing their interests and passions into full-fledged businesses —- from reselling and beauty tutorials to cryptocurrency and video game live streaming. They are standing in line in the name of exclusivity, flocking to retail stores and restaurants that serve as ‘Instagram bait’. They are also going to ‘cons’ (i.e Sneaker Con, Beautycon) and festivals to capture a photo that gives them bragging rights within their community. For this group, if it wasn’t captured for social, it never actually happened.
- ‘Gen We’ are their progressive, empowered and action-oriented counterparts who believe caring is cool and advocate for issues such as mental health, sustainability and inclusivity. They’re change-agents who are unapologetic when it comes to rallying for the important causes, facing difficult matters head on, rolling up their sleeves, and going to work. Simultaneously, their relationship with social media differs from that of Gen Me. They are champions of imperfection and vulnerability, using social messages to create a more accepting and inclusive environment online. Rather than aspiring to be like someone else, they are looking laterally, influencing one another in their decisions to speak up and out.
Gen Z makes up a quarter of the U.S. population and is forecasted to account for 40% of all consumers by 2020. What are some examples of the current buying behavior trends you have seen within this generation and how might it evolve?
Driven by capitalism and hypnotised by hype, Gen Me teens have opted to monetise their interest in streetwear. Willing to wait online to get access to the latest and greatest exclusive product, teens are gaining access to merch and turning around to flip it either IRL or via online marketplaces almost instantaneously. The seasonal summer job has come and gone. Today, teens are earning large sums of money from these seasonless reselling operations.
The personal brand is paramount, and the face has thus become the most important entity for modern Gen Me teens. Looking to be classed as cool and achieve the unobtainable level of perfection that Instagram breeds, these kids are looking to achieve the coveted look as they expand the filter bubble with a stream of selfies and Snaps. This image-obsessed group is contributing to a surge within the beauty industry, with teens spending $368 annually on beauty products.
On the flip side of the spectrum lie Gen We teens, who are embracing this new notion of ‘buycotting’. Rather than boycott the brands they deem controversial, they are deliberately buying into those brands they believe in and that share similar values and principles to their own.
Many retailers strive to understand their customers on a deeper level, but this becomes challenging when their employee base does not reflect their customer base. From your research, which marketing messages will most likely resonate with Gen Z?
Gen Me are rooted in escapism, running away from the troubles and anxieties of life by leaning on social media platforms. They are, indeed, style-driven, operating at the mercy of popular online tastemakers who cultivate this unobtainable lifestyle that Gen Me aspires to. If there is anything driving this image-obsessed group to convert, it’s creating shareable moments at scale. Marketers must resonate with the zeitgeist of this group by creating IRL moments that serve as social currency online.
"It’s really all about understanding how to tap into Gen We, which is crucial for marketers today."
As stated earlier, Gen Me is the majority of Gen Z consumers and so a lot of the marketing messages out there are currently resonating and helping to drive the endless stream of content. It’s really all about understanding how to tap into Gen We, which is crucial for marketers today.
I think it’s important to note that from a marketing perspective, no brand really exists that does a nice job of speaking exclusively to Gen We. While this presents a clear opportunity, authenticity is key. Sustainability, compassion, self expression and collaboration seem to be all separate causes that marketers could potentially tap into in order to reach this group. But it’s critical to note that Gen We will be able to suss out pure capitalistic motives that derive from ill intentions. Marketers must be conscious not to sensationalize movements or marginalize people in the name of making money. Embracing important causes must be done in a manner that is tasteful and rooted in truth otherwise, Gen We will boycott your brand, which will be difficult to come back from.
Stay tuned for part two of our conversation with WGSN as we discuss the ways marketers can bridge the gap and appeal to both sides of the spectrum, and how retail stores can stay relevant to Gen Z in the age of Amazon. For more info, download the WGSN white paper here.