Is Your Brand Ready for Generation Z?

This post-millennial generation makes up a quarter of the U.S. population, influences family spending decisions and controls $143 billion in spending power.

As illustrated, Gen Zers in growth markets are more willing to share their opinions with brands across a range of different channels than those in mature markets.* For example, 53% said they had posted comments on social media, compared with 40% of those in mature markets. Twenty-nine percent said they had posted comments on the brand’s website, versus 22% in mature markets. In growth markets, 27% said they had telephoned a customer service representative; only 17% of those in mature markets had done so. And 12% said they wrote about a brand in their personal blogs, versus 8% from mature economies. Source: IBM Institute for Business Value

*Note: Growth markets are those with rapidly expanding economies, such as some nations in Asia, central Europe and Latin America. Mature markets are those with economies that have developed a significant degree of equilibrium, such as the United States, western Europe and Japan.

Just because millennials and members of Generation Z are close in age does not necessarily mean they share the same belief systems. Born between 1997-2010, Generation Z are, by and large, the children of Gen Xers, and they tend to share similarities with their parents — like their underlying skepticism of brands that focus on profit over people. For this generation diversity, purpose and honesty and more than hashtags, they are virtues these young consumers expect from all brands.

3 WAYS To CONNECT WITH GEN Z

1) Represent Everyone

Gen Z is the most racially and ethnically diverse generation in U.S. history. According to a January 2018 McKinsey study, companies in the top quartile for racial and ethnic diversity are 35% more likely to have financial returns above their respective national industry medians. An excellent example of a brand that represents all races and ethnic backgrounds is singer Rihanna’s Fenty Beauty collection. The brand launched in 2017 and has already become a marketing case study.

Fenty’s first “Beauty for All” campaign featured models of all sizes and offered foundation and concealer products in 40 shades. By simply tapping into a palpable void in the market for more inclusivity in commercially sold beauty products, the brand quickly became a Gen Z favorite. One widely liked photo on Instagram showed a Sephora counter with 13 of Fenty Beauty’s darkest foundation shades sold out, and a caption that read: “This is for all the makeup brands who think the dark shades won’t sell well.”

Sandy Saputo, chief marketing officer at Kendo Brands, which includes Fenty Beauty, advises that brands consider the changing consumer landscape. “If you haven’t thought about inclusivity in your advertising, I’d encourage you to make the case for it. The best way to break through with inclusive marketing is to share authentic stories that are rooted in culture and are emotionally meaningful to the consumers you serve. Our approach to inclusion marketing has always been about ‘showing, not telling.’ In fact, we never once used the word ‘inclusive’ in our messaging. ‘Inclusive’ is how we were defined by the press and consumers. The marketing, social and creative team prioritizes and engages in this conversation on a daily basis with the Fenty Beauty community.”

2) Be Authentic

Gen Z expects brands to have a purpose and be socially accountable. According to Ad Age, 69% of this group are more likely to buy from a company that contributes to social causes, while 33% have stopped buying from a company that contributes to a cause with which they disagree. This means brands need to think of Gen Z as collaborators and not consumers. This can be done by taking every opportunity to listen to Gen Z’s concerns and questions. Eighty-five percent of this generation feel either very or somewhat empowered to shape the future. Smart brands can seize this opportunity to influence and inspire these consumers as they move toward adulthood.

By engaging with them on social media and asking their opinion (for example, on new flavors they’d like to have, brands are more apt to deliver on exactly what this generation wants and needs. Brands that want to gain trust and loyalty with Gen Z need to be aware of the issues that matter to them and support causes such as sustainability and transparency. Of course those causes must truly align with the brand’s mission and core values because this generation can sniff out any activism that is a marketing ploy.

3) Help Them Change the World

Gen Z craves a personal, authentic connection to brands. This is a generation that grew up watching and interacting with ordinary kids who happened to be YouTube stars and they are not influenced by mainstream Hollywood celebrities who carefully control their image. According to the Ad Age 2019 annual study of Gen Z, 84% trust a company more if they use actual customers in their ads, and 79% of this generation will trust a company more if the images its brand uses are not Photoshopped. According to the research firm UniDays, 76% of Gen Z want brands to respond to their voices and feedback and view “responsiveness” as a metric of a brand’s “authenticity.” Brand owners can start by revisiting the brand’s mission and make sure that products, brand strategy and messaging aligns with what the brand stands for then develop relationships with influencers through individual engagement, recognition and rewards.