Gen Z, born between 1997 and 2012, represents the first generation to grow up in a world where the internet and smartphones are ubiquitous, establishing them as true digital natives. As Gen Z enters the workforce leading to an increase in their purchasing power, this new generation is not shying away from flexing their economic muscles. Brands are leaving no stone unturned in their efforts to win over this generation.
So, in this article I will share my insights on this intriguing topic which happens to be the talk of the town, and I believe since the last couple of years every marketing summit has created a panel discussion or keynotes addressing this topic with interesting insights from marketing leaders across various organizations.
After carefully reviewing several research articles, white papers, and podcasts from noteworthy marketers, I decided to present the points that I believe brands should consider. Additionally, I am sharing these insights with the marketing community, welcoming their valuable input, which would be a learning opportunity for every marketing aficionado.
To fully understand Gen Z, we need to carefully understand the several economic and social phenomena that this generation went through including but not limited to economic crises, pandemic, climate changes and others. So, this particular generation comes with a unique characteristics and expectations of brands.
- Pragmatism: The first thing that we need to understand is that Gen Z are very mindful of their spending. By mindful I don't infer they are misers. In fact, research suggests that they don't shy away from making purchases which offer fruitful experiences. But that is a topic for another day. What we need to understand in this aspect is, that because of the economic downturns like the covid 19 or the ongoing geopolitical tensions among several nations, inflation is rising subsequently. Because of this economic factor, the cost of living is definitely on the rise and because of this many Gen Z individuals are moving towards a more defensive spending mindset, with a majority planning to cut back on non-essential spending and prioritize their finances over short-term fun. This shift in consumer behavior can also be attributed to the influencers preaching early retirement which is motivating the Gen Z population to save and invest enabling them to retire early. Let's keep in mind that this doesn't mean that demand will go down in the economy, Gen Z will buy and as purchasing power increases, they will buy a lot (flex their economic muscles). It's worthy to note that they will make practical purchases instead of giving in to dark consumerism. Now if done properly brands can definitely manipulate consumers on their perception of what is a practical purchase and what is not.
- Information gathering: One crucial aspect that brands need to understand about Gen Z is that they can have all the information in the world with the click of a button and they know how to leverage this superpower. As highlighted in the previous point, Gen Z prefers practical purchases, and no purchase is a pragmatic one until it's well researched. Earlier, brands had to step up their SEO game in order to make their brand seem like a practical choice. But Gen Z don't trust the web anymore. They trust, drumroll please, INFLUENCERS. According to a report by
凯度
and
英敏特
which highlighted a growing significance of influencer marketing for brands, they concluded that Gen Z looks forward to their favorite influencers and trust those influencers when they look for product information. Brands needs to make sure that the influencers should be relevant with credibility in that particular domain. Moreover, another component of consumer behavior comes into the arena over here which is social proof. If brands can leverage a positive social proof in the web with the mix of influencers, UGC (User Generated Content) and experiential marketing, it is going to be a game changer for brands. Also, native advertising comes into the picture when we talk about this. I will create a separate content for "Native Advertising" later on.
- Leverage the scarcity principle: One of the foundational concepts of consumer behavior is the scarcity principle. The principle leverages the natural fear of missing out on something exclusive. Brands know how to create urgency when it comes to Gen Z and utilize this factor to their advantage by creating limited period offers etc. Businesses needs to make sure that this principle is planned strategically to suit their TG because in marketing one size fits all is not a prudent choice. One thing that brands need to understand about Gen Z is they are keen on following trends, and they are aware about the latest trends (which can be a meme) and they don't want to miss out on getting a slice of that cake. So, many brands have invested into moment marketing which is giving a rise to meme marketing for Gen Z brands. It's a cost efficient and unique way to reach to the younger population which will not only make the brand a standout but also it will make that brand relatable to the audience driving engagement across the social media.
- Sustainability and authenticity will win you the race: Although this point works largely for the beauty and skincare companies but obviously brands in other categories can take lessons from them as well. Gen Z makes their purchasing decisions based on their ideological values and beliefs and brands that align with their ideological values and beliefs tends to win their hearts creating loyalty among the audience. Majority of the Gen Z population demand realistic representation from brands while standing against unrealistic beauty standards. Progressive brands have shifted from a traditional portrayal of beauty standards to a more modern portrayal of beauty standards in order to tap into the Gen Z market.
- Experiential marketing will win the game: One thing that brands need to understand that Gen Z don't buy products, they buy experiences. Brands needs to focus on more connected customer experiences more so than omnichannel marketing experiences. For example, many brands have integrated AI/ML tools into their marketing campaigns which have boosted their engagement rates. For instance, beauty brands are heavily investing into their marketing campaigns in order to provide an out of the box experience to the audience who interact with them which ranges from virtual makeovers, virtual try on makeup looks etc. These marketing tactics will not only help them with tapping into the Gen Z market but also an early entry into the tech game will elevate their position as the first mover drawing a significant portion of the market towards them. One thing that brands need to know is Gen Zs love new experiences, and they will choose brands who can satiate their hunger for exploring something new and different.
In conclusion, understanding and engaging with Gen Z requires brands to adapt to their unique characteristics and expectations. This generation, shaped by economic challenges, technological advancements, and social changes, values pragmatism, authenticity, and experiences over mere products. Brands that can offer practical, well-researched, and influencer-endorsed products, while leveraging social proof and the scarcity principle, will resonate more with Gen Z. Additionally, sustainability and authenticity are crucial in building loyalty among these consumers. By focusing on experiential marketing and integrating advanced technologies, brands can create memorable and engaging experiences that appeal to Gen Z's desire for novelty and meaningful interactions. Embracing these strategies will not only help brands win over this influential generation but also secure a competitive edge in the evolving market landscape.
