What happens when digitally native Generation Z (14-19 year olds) overtakes Millennials as the generation with the most purchasing power? And what happens when this generation is powered by more than 20 billion connected devices? If you don’t know the answer, you will in 2020. That’s when industry experts forecast Generation Z becoming the largest purchasing group fueled by a fully connected world.
I often blog about marketers needing to evolve or go home, and in reading a recent Ad Age article titled, “Move over Millennials – you’ve been a force to reckon with, but Gen Z is coming in hot,” I was reminded once again about the importance of not only staying current but also getting ahead of tsunami-sized market trends cresting right on the horizon. With the pending arrival of Generation Z hitting mainstream markets with a forecasted wallet of $44 billion by 2025, we must learn how best to serve this digitally native consumer base.
So what are the characteristics of Gen Z? Accenture surveyed almost 10,000 of them and found they crave speedy delivery and are willing to pay for it; they rely heavily on "influencer circles" for advice. They are interested in automatic replenishment programs, voice activation, and new shopping methods, like social, as a transaction channel. Oh, there’s one more thing: Gen Z consumers haven’t formed strong brand loyalty yet. Sounds like an opportunity for us.
This generation is far more immersed in technology than Millennials, and it’s shaping their perceptions, experiences, and habits. As a growing customer base, they are showing up with a different set of expectations for the brands they do business with.
Many brands, particularly in the retail industry, are challenged to close the widening gap between consumer expectations and brand experience. But, as technology is shaping consumer preferences, it’s imperative to update our strategies to meet generational wants and needs. Generation Z wants authentic, two-way communication with brands. We’re living in a world of data, sensors, devices, and unprecedented connectivity—and we have a massive opportunity to use that connectivity to learn and grow, and drive personalized interactions that build long-term relationships.
Market to people, not devices
As the Internet of Things continues to permeate our everyday lives, one thing is certain: the challenge to keep up with the number of devices that consumers are using to interact with brands will continue to grow. But marketing to devices is the wrong approach. The right starting point is to focus our efforts on people rather than devices.
Our opportunity lies in understanding the individual preferences of Gen Zer’s and then delivering what’s right for them. My call to action for marketers is to go meet them face-to-face. Get into the field or on sales calls, ask questions, and learn pain points. Listen in on a support call. Sometimes we have to get a little old-school to get the best insights. From there, test messaging and experiences to see what drives and motivates this particular audience. It’s our job to be the expert on our audiences, not just the devices they use.
Demonstrate our worth in a new purchasing ecosystem
Not only do we need to truly get to know our customers, we must also demonstrate our worth. Traditional distribution systems are being upended, and we can’t operate in a vacuum. With Generation Z, we may only have a few seconds to capture their attention, which means we have to show them why they should choose our brands every step of the way.
If we want their data and information, we have to work for it, and we have to build trust to show that we care about them as individuals. It is in our best interest to establish a relationship over the long-haul, not just shepherd them to the completion of one transaction. Doing so requires moving beyond the traditional marketing campaign. The goal should be to develop personalization over time and plan each interaction to yield a little more customer data while demonstrating value.
Update marketing strategies
As marketers, we must create experiences that prompt return engagements again and again. While content and services is the "art" of marketing, complexity on the "science" side is the tricky part. System integration, velocity of data, silo’d departments, and traditional thinking are the challenges and culprits that keep many brands from connecting the real-time omnichannel experiences that are baseline for the digitally native generation. But that’s exactly what we have to design for.
Consumers will continue to grow up and, to be successful in the future, brands must grow up too. By developing strategies that market to people rather than devices, and demonstrating ROI in a new purchasing ecosystem, we can grow generational brands that will be successful both now and in the future.
In an ever-changing world, we can’t plan for every market change, but we certainly can plan to build relationships with our customers. At Sitecore, we design experiences that excite and engage consumers across every generation. Connect with us to learn more about what it takes to develop the right strategies to capture Generation Z’s attention and loyalty.
Scott Anderson is Sitecore’s Chief Marketing Officer. Follow him on Twitter @ScottsVoice.