As a Millennial, I’ve been lucky enough to be on the receiving end of retailers’ wooing tactics for the past few years. Products, payment platforms and brand behaviours have been designed to directly cater to the desires, whims and motivations of my age group. Making buying appealing to Generation Y is a big business, and many transformations to the retail industry have taken place as brands have strategised and evolved to meet the wants and needs of this target market. Self-service checkouts and mobile payment wallets for convenience; use of online data to create recommendation engines and personalised shopping experiences; and let’s not forget price comparison tools for the many bargain hunters amongst us. You name it, brands have provided it.
But forget talking about my generation, there’s a new kid on the block for retailers to focus on. The eldest of Generation Z, born roughly between the mid-1990s and mid-2000s, are reaching their 20s – and they’re armed and ready to shop. Whilst my generation were either struggling students or in low paying jobs at the bottom of the career ladder at that age, the entrepreneurial nature of Gen Z, as well as their penchant for a ‘side hustle’, means that there is enough disposable income sitting within this group of people to capture the attention of retailers. However, recycling the tactics implemented to attract Millennial customers over the years simply won’t cut the mustard when it comes to Gen Z’ers.
Despite often being lumped together, the fact is that there are a lot of differences in the ways that Generations Y and Z see the world. Unlike Millennials, Gen Z cannot remember a pre-digital life. The result of this is a low attention span and an expectation to be entertained – including by the brands they purchase from. Whilst Millennials are in many ways still appreciative of the convenience offered by technology (who wouldn’t be if you can remember using an actual encyclopedia to do your homework), digital prowess cannot be used to wow younger shoppers who expect it from brands as a given. Millennials who came of age during the recession are constantly looking for a bargain, whilst Gen Z’ers care much more about quality, experiences and brand values. You get the picture – the two groups differ dramatically.
This could be why the Millennial mother of all retailers, Amazon, is failing to make the same impact amongst Gen Z. As retail expert, Walter Loeb, recently explained in an article for Forbes, Amazon is not yet offering the online, social or offline experience that this generation desires and expects, and the cost and convenience benefits that have appealed so much – so far, that is - to Millennials simply aren’t enough to seduce Gen Z. Then there’s the matter of being able to provide the products that this age group are actually shopping for, and what’s more provide items of a high quality. Drapers Connected Consumer report published back in October last year, for example, identified that a huge 93% of Gen Z’ers buy clothes every single month, spending between £20-£60. This clearly presents a huge opportunity, but I think even Mr Bezos himself would agree that apparel isn’t one of the giant’s many strong points.
Like the Millennials that went before them, cracking Gen Z can feel like a mystery. But rather than playing catch up, retailers should consider now how they can meet the needs of this generation who will, in the blink of an eye, be responsible for generating the lion’s share of revenue for brands. It will certainly be interesting to see if a giant like Amazon can lead the way or if others will reap the rewards.