What It Takes to Win the Hearts of Gen Z

by Alexandra Pastore and Fairchild Studio | Sep 30, 2021 | 8:34 AM

Born between the mid-1990s and the early 2010s, Gen Zs are digital natives with spending clout. They are children of the Great Recession and have come of age glued to social media and gripped by a world in turmoil, deeply aware of social justice and environmental issues, and the impact of the global pandemic. They also build communities around what’s most important to them.

And that’s the key. For brands and retailers who want to tap into this generational cohort, community building, having aligned values and being “purpose-driven” are essential. Donna Dozier Gordon, head of inclusion and diversity at H&M USA, said younger consumers “are incredibly engaged about the issues that matter to them. They weigh decisions about companies they engage with based on alignment with their own values.”

David Sykes, head of North America at Klarna, the leading global payments and shopping service, said Gen Z “has grown up in the shadow of the Great Recession and confronted climate change-related catastrophes and a global health crisis.”

“So, it’s no wonder this group is looking to join like-minded communities to drive meaningful change not only for themselves, but for future generations,” Sykes said, adding that Gen Z has been in various stages of a pandemic-induced lockdown for over a year and, as a result, have had “plenty of time to evaluate and consider what’s important to them.”

“When it comes to their shopping preferences, they’re interested in supporting companies and brands that share their values and vision,” Sykes said. “In Klarna’s 2021 Reopening Report, we found that 70 percent of U.S. consumers within this demographic said they shop more sustainably now compared to pre-pandemic. In fact, sustainability is the top shopping consideration for nearly one out of two (48 percent) of Gen Z consumers when they’re shopping for outdoor items.”

Sykes said these young shoppers are also “prioritizing their health and the environment and prefer to support brands that use natural and nontoxic ingredients. Companies looking to engage with this audience need to not only offer value in their products, but they also need to define their values and prove that they’re walking the walk, not just talking the talk.”

Jill Standish, senior managing director and global lead of Accenture’s Retail industry group, echoed the sentiment of Sykes and Dozier Gordon. Standish said the pandemic “has very much reinforced Gen Z’s mission to drive positive change in their communities. Our research over the past year showed that 50 percent of Gen Z will buy from brands that put purpose before profit and do the right thing for its customers and employees, while 66 percent of survey respondents said that they believe that COVID-19 will increase societal focus on the environment.”

Standish said research showed that 62 percent of respondents indicated that the pandemic “will increase personal focus on climate change and how individual (my) actions impact the planet — suggesting a link — they think about their health in tandem with the health of the planet.”

Peter Semple, chief brand officer for DePop, said Gen Z “has a set of incredible challenges facing them — several of which are directly related to social and environmental issues.” But they may be more adaptable at addressing these issues as compared to other generational cohorts. Semple said the company’s Gen Z research report with Bain & Co. “determined that through growing up in an era of ubiquitous digital technology and an unmatched rate of change, their generation has developed an interconnected and fluid way of processing the world, rather than digesting it through a binary framework.”

“In fact, 70 percent of Gen Z believe they can be part of a social movement even if they participate only through social media and, therefore, their personas on social media tend to stand out for being more authentic and spontaneous — and less filtered and curated,” Semple said.

So, as a merchant or brand, how do you market to and engage Gen Z? As previously noted, a good place to start is aligning with their values. That takes commitment, and hard work, and, as Dozier Gordon said, requires “taking action in the community.”

Sykes said with a collective spending power estimated to be up to $323 billion, “Gen Z is investing its dollars in brands that back the causes and initiatives that matter most to them.”

“They’re looking to connect with brands that create communities based on their shared passions and interests, Sykes explained. “Because Gen Z’s path to purchase begins online — most commonly on social media — brand storytelling is essential. Retailers need to let Gen Z consumers know that their values are aligned.”

Flexibility and agility should also underpin your brand’s merchandising and marketing strategy with Gen Z shoppers. Sykes said Klarna’s recent Reopening Report found that 80 percent of shoppers “say they now have a greater preference toward shopping online,” which underscores the importance “of offering a truly omnichannel experience.” There are nuances, though, with Gen Z preferences.

“While browsing and buying digitally once felt like a solo act, Gen Z is interested in making it more of a group activity,” Sykes said. “Platforms like livestream shopping are of interest to this group. With that in mind, and aligning with Gen Z’s penchant for health and self-care, Klarna and its retail partner Beautycounter, the leader in safer skin care and cleaner cosmetics, just launched a four-episode livestream series to offer insights, tips, tricks and techniques for a cleaner and better beauty routine.”

Natasha Fishman, chief communications officer and executive vice president of marketing at Authentic Brands Group, said for its Forever 21 and Aéropostale brands, it is important to cater to “trend-driven consumers, particularly Gen Z. Each brand is intentional with its focus on supporting organizations and movements that resonate with and relate to their respective audiences.”

For example, Fishman said Aéropostale is committed to its ethos, Aero Oneness, “which inspires young people to come together to build a brighter, more inclusive future.” The teen brand understands that mental health can be daunting, “particularly for young adults, who are facing intense life challenges,” Fishman said.

Subsequently, Aéropostale partnered with The Jed Foundation to support and safeguard the emotional well-being of the community. “Collaboratively, we guide meaningful conversations, share real-life experiences from our #AeroWorld ambassadors on social media and offer self-care tips and tools to help young adults confidently cope with challenges,” Fishman explained. “Jed ensures young adults and teens have the resources needed for a better future through the relationship, Aéro nurtures positive emotional and mental health.”

Aéropostale has been partnering with The Ali Forney Center, which is dedicated to protecting homeless youth in the LGBTQ community, Fishman added. At Forever 21, the brand is positioned as an inclusive, optimistic and empowering brand “that celebrates the individuality of its shoppers and associates.”

“With a commitment to diversity and inclusion, Forever 21 has partnered with Boys & Girls Clubs of America,” Fishman said. “The partnership was established in 2017, Forever 21 has worked hand-in-hand with Boys & Girls Clubs of America to support programs that drive equity and opportunity for underserved youth. The brand recently announced that its latest back-to-school campaign, which encouraged shoppers to round up their purchases to the nearest dollar, raised over $2 million.”