Until recently, Baby Boomers, Generation X, and Millennials have been the target demographics for most modern businesses when marketing their services/products.
However, businesses should consider the purchasing power and the burgeoning influence of another: Generation Z. Generally considered to include people born between 1996 and 2014, they are the rising demographic armed with an economic force to be reckoned with. So, turn your attention to the effects of the youngest generation of consumers. Many B2C and B2B businesses have already started.
According to Forbes, Gen Z is set to become the largest consumer cohort by 2020, impacting up to $143 billion in direct spending per year. A 2017 report from IBM and the National Retail Federation cited that last year more than 70 per cent of Gen Z-ers influence their family’s spending. There appears great reason to shift your focus from previously dominant Millennial trends to those of the up-and-coming Gen Z.
Gen Z vs Millennials
Intrinsically, there isn’t much difference between Millennials and Gen Z. Both heavily utilise social media, mobile apps, and other online content. Both want to purchase from authentic brands that reflect their values and interests.
But what stands the two generations apart is Gen Z’s increasing dedication to those things that Millennials first discovered and then normalised. Gen Z has intensified the Millennial usage of technology and the requirement of brand personalisation. A VidMob survey of 1,000 individuals from each generational bracket revealed that Gen Z users outpace their Millennial counterparts in some key social platforms.
The survey also reveals that ads which young people were more likely to interact with were those that reflected best the individual’s taste and style. Gone are the days of traditional methods of personalisation: matching gender, age, or ethnicity. Now, a more focused look at the psychological profiles of who Gen Z-ers are as people is required.
Let’s have a look at some of the industries most affected by the incoming tide of Gen-Z, and how you can capitalise on the freshest generation.
Gen Z Kills Industries?
As businesses move further and further towards an entirely technological era, there inevitably comes the predicted deaths of some well-established industries.
E-commerce can be credited for a decline in both the use of cash and the retail industry. 169-year-old department store chain House of Fraser was recently rescued from administration by Sports Direct. Before the deal, 6,000 jobs were at risk due to 31 of the chain’s branches being earmarked for closure. This sign is evidence of the mounting pressures facing the UK High Street. Partly to blame is the acceleration of the digital economy and the purchasing of clothes online, perpetuated by Gen Z.
Print magazines have also continued there decline in popularity and sales. In March this year, NME magazine closed after almost seven decades. Consequently, B2B marketers must take note of how much this could bolster digital and social channels of magazines.
Online engagement, if it isn’t already, should be central to your marketing communication.
General Electric, the world’s fourth-largest B2B business, has been dubbed the 'most exciting boring brand' due to its social media efforts. Instead of using traditional marketing methods, GE uses a mix of questions, images, videos, links, and virtual reality to create content that relates to a wide range of topics including jet engines, medical science, outer space, and data science. GE marketers are even exploring the potential of bots and artificial intelligence, as well as voice automation, following the release of Amazon Echo and Google Home.
Of course, just as Millennials were supposed to kill off beer, cereal, and bars of soap, such predictions of dying industries should be taken with a pinch of salt. In fact, 98 per cent of Gen Z consumers still buy in store some or most of the time, according to the National Retail Federation and IBM.
To appeal to a larger audience, in 2016 GE ran a TV and social media ad campaign called ‘What’s the matter with Owen?’. The campaign was a hit and in a year since launching recruitment of engineers and computer scientists had increased by 800%. Also, GE continues to invest heavily in clean energy sources and highlights their success on social media. Both of these marketing techniques will make Gen Z marketing executives much more likely to do business with their company.
It’s not about industries falling off the face of the earth. But you must adapt to the times in which we live.
Appealing to Gen Z
So, how can you capture and hold the attention of the latest batch of consumers?
To conduct a strategy that appeals to Gen Z-ers, it first helps to understand what might discourage them from purchasing from your business. A significantly different approach will be required.
Firstly, businesses need to be prepared to say goodbye to the days of brand loyalty and the loyalty programs that come with it. A study conducted by Mobile Marketer found that Gen Z-ers are reluctant to join loyalty programs for a variety of reasons, with almost half (40%) of this segment surveyed saying the programs require too many purchases to earn rewards or to redeem points. Gen Z-ers aren’t interested in long-term investments. Instead, they yearn for instant gratification.
In light of those disparaging opinions of loyalty schemes, Gen Z-ers also have a tough time trusting a business.
Current issues such as data misuse and online hacking, among others, have created a volatile time for consumer trust. As a result, Gen Z are intelligent, self-aware, and will not be lured into the loyalty strategies of the past. They want state-of-the-art tech combined with influencer involvement, social engagements, and pop-culture integrations which create the authentic brand they want to engage with.
In this light, Brite:Bill conducted a survey of 3,200 participants which concluded that half of Gen Z respondents said they would like access to a chatbot for bill enquiries, while just under a third (32%) agreed that chatbots were a good alternative to usual customer care lines. Gen Z are more inclined to favour the quick and easy option of automated customer service, as opposed to the slower, more traditional methods of phone calls and email.
If selling to businesses with a large Gen Z consumer base, it’s important you allow Gen-Zers to feel a part of the conversation. A business must be vigilant of this demographic. It’s increasingly important that businesses loosely position their content to align with the values of generation Z. This is not to form a bond that overrides any ‘superficial’ loyalty programme, but rather, helps build a relationship and a trust in light of these challenges.
For SaaS companies, a platform must appeal to the eight-second filter of Gen Z-ers. With 54 percent of this generation saying they use multiple devices at a time, amounting to 10.6 hours of online content a day, they can identify things that relate to them very efficiently. SimplySaaS highlight three things required to perform well with Gen Z marketing executives: get to the point, use a mobile-first strategy, and highlight company values on their preferred platforms.
Above all, you must create a product that both promotes and embodies authenticity. The key is to be less biased and more human. Gimmicks and ploys for the B2B or B2C business will repel Gen Z. Instead, actively listen to them, not simply follow the latest trends. They might be elusive to brands in the traditional sense, but they are listening to one another. Make it your mission to be a part of those conversations.