Heads up, brands and retailers — Generation Z, also known as Post-Millennials, is starting to hit the stores. Tomorrow’s shoppers are just beginning to come into their own, with an estimated $44 billion in buying power according to Marketo. They’re shaping up into a force to be reckoned with. Brands who’ve only been focusing on Millennials might just get caught off guard by Gen Z’s unique buying habits.
One big shift is that Gen Z shoppers actually prefer an in-store shopping experience to buying online — but they’re certainly not putting down their devices. Instagram and Facebook are two of their most popular places to find new products (45 percent and 40 percent, respectively) according to a new survey from Euclid Analytics. But that same survey reveals that nearly two thirds (66 percent) prefer in-store shopping so they can experience products before buying.
What’s clear is that brands that want to engage with Gen Z in stores need to offer them tailored, relevant experiences — both online and IRL (that’s “in real life” in Gen Z speak).
Get ready for “reverse showrooming”
In a survey, crowdsourced savings platform Dealspotr found that Gen Z was the demographic most likely to “reverse showroom,” meaning that they often discover items on their phones, then go in-store to make the purchase. Dealspotr’s founder and CEO, Michael Quoc, believes this may be in part because shopping among college students and teens is a social activity.
“Retailers that offer a great mobile app experience that integrates with in-store service can convert younger shoppers. Most retailers don’t do a great job at integrating the mobile and in-store experiences, so this is an opportunity for forward-thinking retailers to differentiate.” – Michael Quoc, Founder and CEO, Dealspotr
This means when Gen Z steps inside a retail location, they often know exactly what they’re there to buy. Yet, Euclid Analytics found that 31 percent of Gen Z shoppers thought it was too hard to find items in-store (the most of any generation).
The solution? Improve how you plan and execute your in-store programs. Pay close attention to how consumers are browsing your store, and design your displays and promotions in such a way that they make it easy for shoppers to find what they need.
On a related note, you may want to invest in retail audit software to streamline the store visit process, to ensure that your product is visible and the overall program is implemented according to Head Office plan.
Use social — online and offline
Gen Z is more plugged in than ever, and the lines between physical and digital retail are starting to blur. According to a study from Retail Perceptions, 69 percent of Gen Z shoppers report having visited a retailer’s store as the result of that retailer’s social media post. They were mainly drawn in by posts about new products (78 percent), discounts and coupons (62 percent), new trends (50 percent), and in-store events (46 percent).
These consumers “are on social media a significant amount of time and CPGs need to get their products on those platforms. If someone in this generation recognizes a product in the store from their favorite social media site, they are more likely to buy it.” – Kerri Gois, Marketing Manager, BroadbandSearch.net
Draw Gen Z into the store with in-store only coupons or discounts for checking in on social media while shopping.
Another tactic is to engage young shoppers through social apps like Snapchat, which Euclid Analytics reports 44 percent of Gen Z shoppers use while inside a retail store.
Consider what Michael Kors did last year. For National Sunglasses Day 2016, Michael Kors sponsored a Snapchat filter that enabled users to virtually try on sunglasses. According to Adweek, the lens garnered more than 100 million views and “lifted purchase intent 2.1 times above the market norm.”
Not only that, but Lisa Pomerantz, the retailer’s SVP of global communications and marketing told Adweek that the initiative “added a layer of relevance to a millennial- and Gen Z-heavy audience.”
Generation Z isn’t looking for generic experiences in their everyday life — and they don’t want to buy bland products, either. “When Gen Zs buy products they are looking to have an experience past just the functionality of the product,” says Gois. “Everything needs to feel personal. CPGs can engage this generation by creating a story around their merchandise.”
Don’t let the story go stale, though. Always stay on top of your narratives to keep up with the times. Consider what Theory House, a retail marketing agency, did to reinvigorate the in-store experience for department store chain Belk.
Theory House worked with Belk to rebrand their juniors department, replacing the “Juniors” name with something that resonated more with Generation Z. “We recommended that Belk lose the ‘Juniors’ tag which Gen Z associated with stale and uninspiring fashions and rebrand the department ‘Frolic’ which spoke to our young shoppers ambition to explore the latest fashions,” shared Theory House’s president, Jim Cusson.
“The banner took the extraordinary step of actually rebranding the department with each new fashion season. So ‘Frolic’ in the summer shifts to ‘Glow’ in the winter and ‘Bloom’ in the spring season. The store was now keeping pace with the Gen Z consumer not only in terms of its fashion choices, but in the actual in-store experience. Additionally, completely new signage, fixtures and messaging greeted our Gen Z shopper.” – Jim Cusson, President, Theory House
Give them multiple ways to interact
Despite their reputation for preferring screen time, Zachary Weiner of the marketing organization Emerging Insider Communications found that Gen Z responds positively to interaction with human sales staff in-store. “While many brands strive to deliver customer service via Twitter, digital in-store marketing, and sales integrations, Generation Z positively reacts to stores that add on-floor customer service agents who can provide guidance and help.”
That said, Gen Z is still big on digital. UK outfitters A Hume Country Clothing recently put iPads into two stores in an effort to engage with Gen Z.
“Although many of our older customers are more than happy to talk to a sales representative to find out more information about our products, often younger customers are less willing to talk to our staff and would prefer to consult a tablet instead,” says A Hume’s Max Robinson.
The takeaway? Give Gen Z shoppers different options for how to interact with your brand. Invest in mobile and digital campaigns to reach these young shoppers, but don’t neglect personal customer service in-store.
Make experiences novel
Ad blindness among Gen Z shoppers is a byproduct of their status as the first truly digital native demographic. Traditional in-store displays aren’t as effective in attracting Gen Z’s attention as previous generations, but CPGs can stand out with a strong novelty factor.
Weiner has found that augmented reality (AR) and virtual reality (VR) kiosks are one way to catch Gen Z’s attention in store. “The novelty factor draws attention, and integrating AR/VR delivers a format that Gen Z accepts quite naturally,” he says. “As VR/AR becomes more robust, we can drive more novel experiences — from virtual product tours, to games, video commentators, and social share-ability experiences.”
Companies like Lego, IKEA, and Converse are using AR-powered kiosks and product packaging to help shoppers imagine what finished kits will look like, how furniture will fit in their new apartments, and whether or not a shoe will go with their outfit.
The bottom line: as Gen Z shoppers continue to blur the lines between online and in-store shopping experiences, CPGs need to be prepared to engage them in increasingly innovative ways.
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Do you cater to a lot of Gen Z shoppers? What are you doing to connect with them? Share your thoughts in the comments.