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How Retail Brands Can Win Over Gen Z Shoppers

Gen Z is one of the largest-spending consumer blocks in America - and growing. So, how can retail brands show up with what Gen Z wants most?

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If your retail brand is like any of the peer and competitor brands around you, you may have noticed a big change in your demographics over the past couple of years. Let’s talk about how Gen Z are coming into their own and are starting to command a larger portion of spending power in the US.

According to Barkley Inc (via Newsweek), Gen Z’s spending power is more than $140 billion and growing quickly. And it’s not just their dollars alone that makes it important to establish a relationship. It’s understanding how they shop. Gen Zers are more diverse, more discerning, and more willing to abandon traditional brands than every generation before them.

So to just assume that your retail brand will resonate with Gen Z shoppers without putting in the marketing work may quickly make your stores as obsolete as Sears. Rather, it’s necessary to be proactive about courting Gen Z shoppers by understanding what they want to experience when perusing, and ultimately purchasing, from your brand.

Let’s dive into four ways your retail brand can start catering to Gen Z.

1. Authenticity in Action

How well does your business understand what Gen Z wants? Be honest. Because according to research, only 8% of Gen Z feels strongly that brands understand them. That’s not great considering how much money brands are leaving on the table, how little time there is to really understand these young shoppers, and how there’s even less time to actually put these insights into action.

And that third part is the key to connecting with Gen Z. While ostensibly most brands know the right buzzwords to say: diversity, environmentalism, representation, self-care; it’s not immediately intuitive in how these values are put into action.

In a word, we’re talking about authenticity. Not only that brand understands Gen Z’s values, but walks the walk as well. The same study linked above showed that “78% of Gen Zers believe that brands are all talk and no action and that brands say things they simply don’t mean.” So it’s your job to be more than just performative in your marketing.

One example is how Patagonia took a stand in both politics and activism by supporting specific senators that aligned with their environmentalist values, as well as donating over $100 million to activists, and going so far as to join others in suing the Trump White House in order to protect national monuments. This type of real action was a risk, but paid off when Patagonia saw its best revenue performance in decades.

2. Return to Brick & Mortar Stores

As savvy as Gen Z is with all technology, especially mobile tech, there has been a trend of returning to shop in physical locations. Somewhat astoundingly, Gen Z has been shown to prefer shopping in brick & mortar stores more than Millennials, and only trailing Baby Boomers. Some studies show that nearly half (47%) of Gen Z prefer to shop in physical stores rather than shopping online.

Why? Well in many ways, Gen Z is tired of being the “remote” generation. Due to the pandemic and the proliferation of tech, they are showing fatigue for video calls and virtual experiences. Shopping is one of the few ways Gen Zers can convene in physical locations to hang out IRL, which is why you may have seen groups of them in Target or IKEA.

Another reason is that due to social media, especially Instagram and Tik Tok, Gen Z shoppers are apt to show off their in-store hauls with the retail environment acting as a great backdrop for their pictures and videos. For retailers, this is basically free social advertising and it’s no wonder more and more locations are using “staging areas” so Gen Z shoppers can create their content.

Your retail locations should incorporate areas where shoppers can take photos and video, even encouraging these actions by adding better lighting, more mirrors, and signage that show what hashtags they can add with their uploads. Also, incentivize more in-store shopping with coupons and promotions that can only be redeemed when they come in.

And speaking of social media…

3. Approachable & Actionable Social Media

A whopping 80% of Gen Z shoppers have bought something they’ve seen on their social feeds. And considering how important authenticity is, there’s a strong case to be made that even for smaller retail brands, it’s important to engage in influencer marketing to showcase your products.

Influencer “celebs” are considered much more approachable and relatable for the Gen Z audience. Not only that, more Gen Zers are using YouTube and Tik Tok as their main search engines, rather than strictly Google, to find new products to try and buy. And while it may cost an arm and a leg to get the top 1% of influencers to showcase your products, there are plenty of microinfluencers on these platforms that can not only get you plenty of views, but bring along that authenticity that is so hard for brands to simply manufacture.

Another aspect to consider is the ability to transact right from the social media platform. Instagram Stories are a popular way for Gen Z to not just browse, but to actually make purchases using Instagram’s checkout feature. However, your brand can take advantage of first-party data by displaying your own Shoppable Stories right from your own mobile site, email, or SMS. This way, the customer data in your CRM can be leveraged to show much more targeted products that have a much better chance of converting, than trusting Meta’s algorithm to show the right products via Instagram’s feed.

4. Ramp Up Personalization

Ultimately, what Gen Z wants from their favorite brands is to truly be understood. The convergence of authenticity, convenience, approachability is personalization.

According to the 2022 Digital Consumer Trends Index, half of all consumers are irritated by receiving irrelevant content or promotions; and this includes 39% of Gen Z shoppers. When brands show a mismatch of what young shoppers actually like, it results in a major turnoff because it’s evident that the brands don’t really understand each individual person. In fact, a third of shoppers say they don’t feel a brand has even recognized their shopping or loyalty history.

Why collect customer data if you’re not going to elevate their shopping experience into a personal one?

84% of online shoppers say that personalization influences their purchases, and 88% say they’re more likely to keep shopping with a retail brand that offers a personalized experience.