Like millennials before them, Gen Z is a tough nut for many brands to crack: an enigmatic generation defined by its willingness to challenge convention and break the rules that brands had previously taken for granted. As this customer base begins to grow — McKinsey projects Gen Z will represent 40% of global consumers this year — it’s critical that brands adapt to remain relevant.
I've worked in software and digital service companies for more than 12 years and have experience in marketing solutions, software products and consumer relationships from a business and sales perspective, including for Gen Z. I've noticed that this is a challenge everyone feels, including legacy brands. Tony Weisman, CMO of Dunkin’ Brands, said it best in an interview with eMarketer: “We have no automatic right to exist or thrive in a rapidly changing world.” Consider how quickly digital behaviors are changing: The meteoric rise of TikTok serves as a timely example of how new means of interacting, driven by youth, have mystified parents and brands alike around the world. The game is changing, and the youth are in control. How does one keep up?
Rethink Loyalty
Gen Z is indeed rewriting the rulebook on loyalty and requiring several shifts in mindset that brands should make to keep relevant. First, I recommend rethinking your approach to loyalty. While younger consumers may feel a desire to belong, that longing doesn’t necessarily translate to loyalty for brands. Citing a Morning Consult survey, a 2018 eMarketer article notes that "More than half (51%) of 18- to 21-year-olds said they would like to try out different items, 'even when I know there's one I like.'" And 2019 Atlantic research found that only 24% of Gen Z respondents said brand matters a lot in a technology purchase.
I believe loyalty still exists today, but brands must significantly rework what that means in their strategy to win (and retain) younger consumers. Today’s brands can achieve this by turning their focus to recognizing, understanding and committing to causes and values that resonate with Gen Z consumers. According to research from DoSomething Strategic (via Forbes), "76% of young people said they have purchased (53%) or would consider purchasing (23%) a brand/product to show support for the issues the brand supported." Consider the whole slew of direct-to-consumer brands that have sprung up to challenge competitors’ legacies by honing a message built around purpose: for example, by dramatically reducing packaging waste while offering a differentiated, virtuous customer experience in the process.
Mitigate Skepticism
Gen Z’ shifting priorities from consumerism to social benefit brings us to another important thing to consider: They likely have a “BS” meter. Brands that are “all talk and no action” simply may not resonate with them. Consumers are rightfully skeptical of marketing buzzwords (what does “artisanal” mean for many products, anyway?) and practices of “greenwashing” or “rainbow washing” products. To cut through to young consumers, brands should adapt by ensuring their claims make a real impact.
Here’s how to gain skeptical consumers’ trust: Just be truthful. Don’t oversell or overpromise, and don’t overflatter customers with your message, advertising or sales strategy.
I've found that young consumers can sniff out overcompensating jabbering. Instead, make sure your "why" speaks louder than your "what.” Stay true to your brand purpose in every touch point to validate and prove your claims.
Be A Better Listener
People generally want to feel heard, not overheard — and Gen Z is likely no different. But when it comes to understanding their preferences, young consumers are concerned with how their personal data is used, even if they appear complicit in passing it along. The Atlantic's research found that 42% of Gen Z respondents called privacy “very important” when it comes to sharing data online. Adobe’s “Voices of the Generations” report paraphrases Jonathan Wan, director of global marketing for media and social at Japan Airlines, who gives voice to youth’s concerns on how their data is used. “These consumers feel powerless to do anything about [risks posed by data misuse] as their media consumption habits are so reliant on data-driven platforms and devices that show data-driven content and apps.” The 2019 report found that 75% of Gen Z respondents didn't trust politicians in particular to protect data.
Not to mention that Google recently sounded the death-knell for third-party cookies, a shift that will drastically change the way data is collected and used in the near future. To survive in the coming data landscape at all, brands should work to entice consumers of all types — not just young generations — to willingly provide their data to brands.
Brands can mitigate any consumer anxieties but still benefit from social listening and user feedback by hosting real dialogues with their audiences. Sure, transparency about data is important, but young consumers may also want to see how their comments and feedback inspire action. A blog post from Forrester Principal Analyst Maxie Schmidt sheds insight on what drives Gen Z to provide feedback. Notably, she said her research showed they’re enticed by incentives, which “might stem from the absence of the most powerful long-term reward of giving feedback: noticing that a company made changes to address the feedback.”
This opens up a pretty significant white space: show consumers that you truly care about what they think. Remember my mention of challenger brands earlier? I've found that many are great at doing this by leveraging user data to aid in product development. This feedback loop allows consumers to feel like their concerns are heard and offers an opportunity for the brand to underscore a sense of connection by giving users the opportunity to have a hand in the growth and evolution of the product.
Despite Gen Z’s characterization as brand nomads, loyalty can continue to exist — at least for the brands that have adapted to the shifting values and concerns of today’s consumers. It all comes down to being more proactive in listening to your customers’ concerns, ensuring that feedback makes an impact and authentically exhibiting your message.
