Legacy brands are being challenged by Gen Z’s influence on commerce and culture. Hana Ben-Shabat (Founder of Gen Z Planet) joins Melissa Dixon from BigCommerce to discuss the defining characteristics of Gen Z and how brands can reach younger shoppers.
Listen to this podcast for more insight on Gen Z’s disruption in the industry, including their expectations of modern-day shopping experiences and how you can convert them.
Episode 4 of The Make It Big Podcast
Melissa Dixon Could you tell us a bit about Gen Z? What are the defining characteristics of this generation?
Hana Ben-Shabat explains that “Gen Z” is basically any person born between 1998 and 2016. We are talking about a huge group of people in America — 78 millions. They are huge and hard to ignore. However, they possess many characteristics that make them different than previous generations. The first is that Gen Z is the largest generation in this country. 48% of them are minorities. They are also the most connected generation. 87% of them had access to a mobile phone by the age of 15. This generation has never known a world without a mobile phone, search engine, or social media. It is an entirely different experience. It alters the way they perceive the world and how they learn. Their engagement level is the third characteristic. They are a highly engaged generation. They have been exposed to technology and experienced constant economic, political, and social changes .”
MD Could you tell us more about Gen Z’s impact on commerce?
HB-S. “I always say Gen Z’s entry as consumers will disrupt the consumer market in ways that we have never seen before.” They are not driving the disruption. The disruption is already happening. Retail has been disrupted over the last few years. Gen Z’s entry will accelerate this disruption.
“To talk of disruption, we must understand the history of the consumer market over the past decade. It boils down to two factors. The first is technology. How technology has influenced the way people search for products and discover products. Values are the other. People consume more based upon their beliefs and values. Gen Z is a generation with very different values. They know how technology can be used to their advantage and are going to increase our knowledge of commerce.
“I believe it’s still disruptive because they are a complex group of customers. They are extremely savvy. They expect high quality from retailers and brands. They expect authenticity from brands and retailers. They value authenticity and expect brands to be authentic and transparent about who they are.
MD In which key categories have you seen Gen Z make a significant impact? What resonates with them most? What is their favorite place to spend their money?
HB-S: “Gen Zers have a lot of power and are very empowered consumers starting at a young age. They are used to having access to their parent’s credit cards or some other payment that allows them download music, movies, and games. Even at an early age, they make purchases every day. This is something you need to keep in mind when thinking about this generation.
My research has shown that eating out is the most popular way for people to spend their money. This has probably decreased a bit due to the pandemic, quarantines, but it will go back. They love to eat out or to order from restaurants instead of making their own food. This would be number 1.
“Number 2 is apparel and footwear. This is very important. This is to be expected in this age group, where fashion and beauty are used as a means of self-expression. Fashion is big.
Entertainment is the third. Split the data between male and females to get beauty as a fourth priority category. These are the areas young people are most likely to spend their money on em, even though they may not be ready to make large purchases em>
MD You talk about six building blocks that are the foundation for next-generation marketing in your book. Let us know a bit more about these building blocks and how they can be used to market and sell to them.
HB-S: It’s not necessary to use all these. However, you can choose the right one for you and your brand. Some brands will choose purpose because Gen Z is attracted to purpose-driven brands that are true to their values. This is where you can win the hearts of Gen Z by clarifying your brand purpose. It’s crucial to be authentic because Gen Z is sensitive to BS meter. Gen Z can easily tell when a brand is saying things it doesn’t stand behind.
“The second is to embrace diversity. Gen Z, the most diverse generation, wants to celebrate diversity in all forms. Marketing to Gen Z is about diversity and inclusion.
Connecting through communities is the third building block. Contrary to what many people believe, they are too obsessed with their phones and are isolating theirself because they do everything on their phone. This is not true at all. They crave human connection in every aspect of their lives, both at work and at home.
“Personalization is the fourth building block. Gen Z, as I mentioned, is very individualistic and expects brands to be able to recognize this when they interact with them. This means personalized products and services as well as personalized communication. I found that 70% of Gen Zers who researched my book didn’t believe that brands communicate with them in a personal way. This is a great opportunity.
“The fifth building block, what I call the feed the content beast, is what I call the fifth building block. Generation Z was raised with instant access and constant information. Gen Z lives an active lifestyle that includes exploration. They expect brands that satisfy their curiosity through interesting and inspiring content. This is what they expect. My research shows that more than half of Gen Zs say they won’t follow a brand if they don’t get the content they want.
MDI know that you are able to deliver unique experiences. What does this mean for Gen Z
HB-S. “Unique experience” can mean a lot to different people. But, consumers expect brands to create experiences that are authentic, memorable, and shareable. You have to ask yourself, “Does the experience lend itself for sharing?” It must be something that the person feels is interesting enough to share it with others. Gen Z is looking for that. Gen Z wants to be active participants and not just observers. This is why TikTok has become so popular with this generation. You’re an observer on Instagram, if you think about this. You are scrolling through the content of many other people. You can view other people’s videos on TikTok. But the real fun is creating your own videos and being an active participant.
“I believe that it is essential when designing experiences to put participants at the center. Gen Z wants to be the protagonist of an experience. If they are the protagonist and actively participate in an experience, they will talk about it. They will feel emotionally connected and advocate for your brand. Many people talk to me about their experiences and the role technology plays in them.
“Sometimes people forget it’s not all about technology. It’s possible to have a low-tech experience that engages people and puts them in the centre. JetBlue ran a promotion a few years back for flights from New York to California during the winter. This giant ice block was literally placed in the middle Madison Square in New York. There were prizes inside the ice cube. There were prizes for apparel, gear, clothing, and airline tickets. People were asked to chip in the ice, and then take what they can. This is a popular activity that draws many people. These are the activities Gen Z wants to take part in. Except for the social media buzz, there was no technology involved. It was so simple to put together and puts participants at the heart of the experience. You feel like you are the winner of that experience .”