The rise of Gen Z creates new challenges for retailers

Gen Z is connected, informed and ready for business

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Generation Z, led by today’s teens and tweens, is coming of age. And make no mistake: they don’t think, act or shop like Millennials.

If you hope to connect with their growing purchasing power (US$44 billion in the US already1), you need to understand who they are, what they want and how they want it.

Gen Zs are natural entrepreneurs

This generation is more self-aware, self-reliant and driven. They are realistic, über-productive, goal-oriented innovators.

These traits affect how they like to interact with, and what they want from, businesses, as well as their taste in entertainment and advertising.

Gen Z is redefining loyalty

They are more informed than any generation, and they want to take charge of their lives and their futures. So it’s not surprising that they are less loyal to retailers.

Our research shows that if you try to win their support with traditional loyalty programs, cards and promotions, you’re fighting a losing battle.2

Gen Z expects you to deliver

Getting them into stores is tough. Even more than Millennials, they want to shop online and have you deliver – coming in to pick stuff up is less appealing.

This makes it harder to grab and hold their attention. Retailers and brands must find new and authentic ways to win the hearts and minds of this generation.

Winning their business

Here are a few of the “at par” requirements just to stay in the game:

  • Provide them something they value where and how they want it, free of hassles, and intuitively deliver on their evolving needs. Gen Z’s low threshold for mistakes and “system issues” will make Millennials look like patient saints.
  • Enable them to be part of the solution. Provide them the ability to create what they want out of your offer. Personalization and customization are not enough.
  • Develop a relationship of mutual respect, where you demonstrate loyalty and trust before asking for it. Traditional reward programs will be DOA.

Innovate or die!

Adjusting your Millennial strategy will not be enough. A radically different generation requires a radically new approach.

  • 1 "Activities of Kids and Teens," Mintel Reports, November 2013.
  • 2 Americas retail report: redefining loyalty for retail, EY, June 2015.