Generation Z consumers were the first generation born with the Internet. As a result, they’re often referred to as digital natives, and they are reshaping how companies engage with their target demographics.
A survey published by Vogue Business illustrates how Gen Z shoppers are not as brand loyal as their Millennial predecessors. Gen Z consumers crave a deeper connection to their brands and will often opt for independent and micro-brands that are aligned with their personal ethos.
Gen Z is a large and influential generation that aims to stay on top of and push cultural change, but brands have to earn their way into their wallets. As a result of the pandemic, 70% of Gen Z said they are monitoring their spending more closely than before. This shift in Gen Z shopping habits underscores the importance of brands needing to speak to individualization and identify niche narratives to help their product stand out among the rest and be able to engage today’s consumers.
When targeting Gen Z, branding must go beyond catchy marketing on social media. Young people are placing a greater emphasis not just on high-quality items, but on larger societal and environmental issues. Gen Zers expect a company to ethically source products and use its platform and influence to address inequalities, environmental issues, and make real change in the world.
The newest addition to the workforce, Gen Z is equipped with purchasing power and an appetite for higher quality items, shifting consumption behavior. Although purchasing from a variety of brands, one aspect remains consistent: brands that understand their consumers and focus on sustainability and community come out on top.
Gen Z is redefining what newness means with the expansion of the secondhand market — a market that 27% of Gen Z are more likely to shop. With more resources and tools at their hands, this new wave of shoppers is keenly aware of a brand's level of transparency and their environmental, social, and governance (ESG) practices, which are now deciding factors in generating new business. Resale platforms like Depop are slowing down the cycle of new purchases, but still allowing consumers to enjoy many different trends.
A study conducted by Forbes from a panel of Gen Z shoppers put together by Berns Communications Group found that quality and fit were the most common words mentioned when it came to shopping for fashion. Younger consumers are demanding a stronger price and value proposition where they don’t need to compromise quality for price.
This balancing act of desiring higher quality items but wanting reasonable prices is echoed in the increasing usage of buy-now, pay-later (BNPL). Since the start of the pandemic, 123% more Gen Zs have used BNPL than before, the strongest uptake of any generation, and one-third of Gen Z said they are likely to use BNPL solutions in the future. This is significant because BNPL has enabled more consumers to be able to purchase more expensive, higher quality products by paying for these goods in stages.
A fragmented market
While Gen Z shoppers have similar underlying motivations and overarching values when it comes to their shopping habits — quality and fit, for instance — it doesn’t mean the choices they make are the same. This latest generation avoids big name brands and luxury labels, throwing a wedge into many traditional marketing strategies. In fact, consumer products have seen a massive amount of market fragmentation as niche brands are able to cater to micro-markets that provide a medium for consumers to feel more connected to their purchases.
While prior brand strategy focused on being the leading brand as a selling point, Gen Z consumers don’t necessarily want brands that say “mass.” Instead, niche brands are making their way into consumers’ wallets, which is tricky because the reasons consumers like one niche brand could be applicable to other brands as well.
Looking to personalized messaging
Faced with increased market fragmentation, it is more important than ever before for brands to know their customers across generational divides. With Gen Z consumers leaning to niche brands, delivering 1:1 messaging across channels based on their shopping preferences is vital.
Gen Z consumer insights shows that this is an omnichannel generation — shopping wherever suits them best in the moment without preference as to where they find what they want. Gen Z is 56% more likely to have shopped for fashion in-store over the last three months and 38% more likely to have shopped online.
With Epsilon, delivering personalized cross-channel messaging at the right time is made possible. With Gen Z consumers having niche preferences, it means that personalized messaging is key to building conversations and loyalty. Named a leader in the Forrester Wave ™ Email Marketing Service Providers, Q1 2022, Epsilon has helped countless clients talk to their customers. No matter what generation your consumers fall into, real people deserve real conversations.