To Capitalize on Gen Z’s Spending Power, Retailers Need to Know How They Shop
Brands that integrate social and environmental best practices into their products and services, and develop relational rather than transactional messages will do best with Generation Z, according to reports by consulting firm McKinsey & Co and Business Insider, a financial and business news website.
“[Brands] need to take an active stance on social issues, satisfy consumer demands for radical transparency and sustainability, and, most importantly, have the courage to ‘self-disrupt’ their own identity and the sources of their old success to win new generations of customers,” according to McKinsey & Co.
Gen Z has a spending power of $143 billion and will represent 40 percent of global consumers this year, according to Millennial Marketing, a consumer and marketing trends agency.
While traditional retailers’ and brands’ biggest challenge is increasing more direct-to-consumer and e-commerce products, creating more personalized and intimate experiences will go further with Gen Z shoppers, who were born between 1997 and 2012, according to Business Insider.
Some of the most popular brands among Gen Z are Nike, Vans, Adidas and Gucci. “To court younger generations, Gucci employed a ‘Millennial Shadow Committee’ to help make decisions about the best way to connect with shoppers,” Business Insider reported.
Gucci CEO Marco Bizzarri created the shadow committee in 2017. It is made up of employees below the age of 30 who can provide a different perspective on the Italian luxury house than its top executives through new ideas and processes.
“The committee’s task is either discussing the same topics that we discuss in the normal meeting with executives, or giving me ideas on different processes,” Bizzarri told Quartz, a global news publication.
Retailers are researching new ways to appeal to Gen Z, including partnering with e-commerce brands that are already popular with younger shoppers.
For example, Nordstrom partnered with e-commerce beauty company Glossier, sustainable clothing company Reformation and luggage company Away, to create pop-up shops inside its stores. The company said its partnerships have introduced it to new customers.
“Nordstrom’s traditional brick-and-mortar setting, combined with the intimate experiences of a pop-up, has allowed for the retailer to establish itself as a good partner both for brands and for shoppers,” according to Business Insider.