4 ways to zero in on the Gen Z consumer
As the newest generation of consumers, Generation Z (Gen Z) is a force to be reckoned with. This digitally savvy group is challenging brands to think differently to meet its expectations. With an estimated $360 billion in disposable income, Gen Z is a key audience to prioritize for retailers looking to grow their businesses. It’s crucial to take the time to understand this generation’s values and implement strategies that resonate with them. As a parent of three members of Gen Z, I have experienced firsthand many of this special cohort’s unique perspectives and behaviors.
Read on to understand four revenue-driving strategies retailers can implement to tap into the potential of this powerful consumer group.
1. Understand how and where Gen Z consumes media
Gen Z has grown up in a world where technology is ubiquitous and media consumption is constant. They are digital natives, and as such, they engage with media in a variety of ways that are different from previous generations.
Social media is at the center of how Gen Z consumes media. They use it to share content, connect with friends, and stay up to date with the latest news and trends. In fact, nearly 9 in 10 US Gen Z adults spend more than an hour on social media each day, and nearly half spend more than 3 hours using the platforms. The top three social platforms among younger members of Gen Z are YouTube (95%), TikTok (67%), and Instagram (62%). As such, social content and campaigns are essential for brands to connect with this generation.
Gen Z is also mobile-first — in other words, members of this generation use their smartphones and tablets to consume media more than any other device. They rely on mobile devices to stay connected, watch videos, and browse social media. In fact, Gen Z accounts for almost 40% of mobile users. This means companies looking to reach this audience must develop mobile-first marketing strategies. And throw out email marketing plans — as I’ve learned from my own Gen Z kids, this generation communicates primarily via text and direct messages. Forget about even trying to get them to make a phone call or use voicemail.
Influencers also play a significant role in media trust and consumption habits. Gen Z tends to follow their favorite influencers on social media, and many trust them more than traditional celebrities or brands — with Gen Z and millennials being two times more likely than baby boomers to trust influencers. Influencers can help companies reach Gen Z by partnering on sponsored content or featuring products in their content.
2. Craft marketing messaging and content that resonates
Gen Z expects brands to speak to them in ways that are interesting, authentic, and meaningful.
One of the most important factors for targeted messaging is authenticity. This generation is highly attuned to when brands are trying to sell them something, and they are quick to disregard messaging that feels inauthentic. Brand authenticity matters — 32% of Gen Z say brand authenticity plays an important role in making decisions, and 25% value brand transparency. As such, companies need to be transparent about their values and mission, ensuring that their messaging reflects that.
Visual and short-form content is also crucial. Gen Z responds well to images and videos. Social platforms are designed for bite-sized content that’s quick and easy to consume. Companies that use high-quality visuals relevant to their messaging will be more likely to capture this generation’s attention. To connect with Gen Z, brands should focus on promoting information that can be easily consumed on the go rather than longer, more in-depth content.
3. Offer flexible payment options that meet the Gen Z life stage
Gen Z is relatively new to the world of finance and credit. However, financial concerns are front of mind for this generation, with 46% living paycheck to paycheck and cost of living cited as the top concern. Members of this demographic are only just starting to build credit as they enter adulthood and begin to navigate financial independence. At the same time, they are relocating from home and may be moving into their first apartments — meaning access to durable goods like furniture is essential. The lack of credit history can make it challenging for Gen Z to qualify for traditional credit products, such as credit cards. In addition, many Gen Z members watched their parents experience the recent financial turndown and are distrustful of traditional finance options like banks and credit cards.
Flexible payment options like buy now, pay later (BNPL) and lease to own (LTO) appeal to younger consumers since they are less likely to have established credit and are wary of incurring credit card debt. They are also more likely to struggle with larger purchases since they have yet to hit their prime earning years.
This generation is familiar with alternative credit options, which provide more accessible ways to pay for essential items. In fact, according to a Katapult survey, 60% of Gen Z and millennials would be more likely to shop from a merchant that offers flexible payment options compared to 45% of their Generation X and older counterparts. Additionally, younger consumers are slightly more likely (6%) to have used LTO previously.
More and more retailers across key categories are discovering that BNPL and LTO can be cost-effective strategies for attracting younger buyers. At the same time, more Gen Z consumers can get the essential items they need.
4. Brands should make their purpose clear
Gen Z places a high value on purpose and authenticity, and they expect the companies they engage with to do the same. In fact, 73% of Gen Z only buy from brands they believe in. For companies looking to attract Gen Z, it’s essential to be clear about your brand’s purpose and values and communicate this in a way that resonates with the audience.
This characteristic is what I admire most about Gen Z — they truly put their money where their mouth is, directly linking their values and spending habits.
Companies can define and communicate their purpose by using stories to illustrate how their values have impacted their customers’ lives and showcase the ways in which they’re working to make a difference in the world.
Finally, it’s important to act on purpose and values. Gen Z values action over words, and they are more likely to engage with companies that are making a tangible difference in the world. A survey found brands that act on societal issues experience a four times higher likelihood of purchase. Brands should make sure that their purpose is reflected in their actions, whether that means supporting social causes, reducing their environmental footprint, or promoting diversity and inclusion. Brands that can successfully communicate their purpose will be well-positioned to attract loyal, engaged Gen Z consumers.
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Reid Bork is the chief revenue officer (CRO) of Katapult, where he leads sales, marketing, client success, and partnerships. Prior to Katapult, he was the vice president of enterprise sales at Sezzle, where he was responsible for leading the company’s net new sales and revenue growth with the largest US merchants. Reid served in various leadership roles at PayPal, where he led sales and growth initiatives with PayPal’s top global merchants. Reid was director of travel and entertainment partnerships at Bill Me Later and held numerous management positions at American Airlines. He has a BA from Kansas State University and an MBA from the McCombs School of Business at the University of Texas at Austin. Reid and his wife, Amanda Clark, have three children, two dogs, and a cat named Big Ben.