Gen Z and Building Authentic Community: Understanding the Value for Retailers and C-Suite Executives

Forward-thinking CPG and retail brands like Jiant, Kudos and Sienna Naturals continue to grow through consistent consumer connection and a steadfast commitment to building authentic communities. These brands show strong year-over-year growth, possess loyal customer bases, and prioritize strategic public collaboration efforts, very often through genuine celebrity and influencer partnerships. To cut through the noise and uncover great brands with opportunity for growth among Gen Zers, retail executives should learn to understand what key indicators reflect true, long-term strength and market authenticity.

Here are some essential factors for C-suite executives and retail investors to consider when trying to identify winning brands ahead of the game.

Identify Brands With a Steady Growth Trajectory

One of the primary indicators of a brand’s potential is its growth trajectory. Steady ongoing sales and revenue growth, as opposed to erratic financial performances driven by short-lived trends, signal a brand's resilience and a sustainable market. Retailers and investors alike should look for brands that have shown steady growth over time, even amidst market fluctuations. This is especially true for brands that resonate with Gen Z, who value transparency and authenticity in their consumer choices.

Another key element of steady growth trajectory? High product quality and consistent customer satisfaction. You need a great product to be a great brand, and prioritizing quality in whatever niche you're focused on is key. Brands that prioritize superior product quality tend to enjoy healthier profit margins and a robust competitive position. For instance, the success of Sienna Naturals at wholesale partner Credo and its direct-to-consumer (DTC) business exemplifies how high-quality products can drive traffic into stores and foster strong customer loyalty. It should go without saying but a great product keeps people coming back, and brands do actually need to keep folks coming back in order to grow steadily.

Building Connection Through Authentic Celebrity Partnerships

Brands that align with cultural figures who genuinely resonate with their values and products often enjoy enhanced credibility, reach and rate of adoption. However, authenticity is key when making partnership decisions. Target’s strategy of incubating brands with room to host future celebrity partners is a prime example of this approach. By working closely with celebrities to develop products that align with their personal brands and values, retailers can not only raise awareness but also drive foot traffic and sales. An authentic celebrity partnership goes beyond mere endorsements; it involves a deep, genuine connection with the brand’s ethos, as seen with brands like Oh Norman! by Kaley Cuoco and Sienna Naturals co-owned by Issa Rae. That authenticity also means that the celebrity partner is ready, willing and able to roll their sleeves up and lean in when and where the brand needs them to do so.

A high repeat purchase rate and positive customer reviews are clear indicators of a brand’s genuine connection with its audience. These metrics often translate into stable, long-term growth, as loyal customers are more likely to provide consistent revenue and act as brand advocates. For example, Jiant’s hard kombucha and hard tea products have cultivated a dedicated customer base that values quality and innovation. This loyalty is a testament to the brand’s ability to meet the specific needs and preferences of its target demographic while also delivering a standout product.

Gen Z's Role in Community Building and Shifting Culture

Gen Zers aren't just passive consumers; they actively seek to engage with and contribute to the brands they support. They value brands that provide platforms for community building and allow them to play a role in shaping the brand’s identity and culture. This involvement creates a sense of ownership and deepens their connection to the brand. Brands that encourage user-generated content, foster community discussions, and respond to consumer feedback tend to build stronger, more loyal followings. This participatory approach resonates with Gen Z’s desire for meaningful interactions and their preference for brands that reflect their values, like organizations that see how critical the future of a sustainability-first mindset is.

Another key element for Gen Zers? Brands that own the ability to shape and shift culture. These brands often set trends rather than follow them, influencing consumer behavior and preferences. For instance, Jay-Z’s luxury champagne brand not only sets a high-end market standard but also reflects a broader cultural trend towards premium, experiential products. Retailers looking to attract Gen Z must consider how their brands can drive cultural conversations and remain relevant.

Smart Distribution Channels, Trends and Celebrity Influence

While DTC data and metrics are quite valuable, major distribution channels still play a crucial role in a brand’s success. Balancing the exclusivity of high-quality products with the reach of large retailers is essential. Brands must navigate the fine line between maintaining product integrity and capitalizing on the exposure provided by big-box stores. For example, Kudos, a diaper brand which is set to launch at a major big-box retailer this fall, exemplifies this balance.

The propensity of celebrity partnerships in retail and CPG continues to grow each year. From personal care to pet nutrition, celebrity-led and “celebrity-built” brands are gaining traction across various categories. Membership clubs like Sam’s Club and Costco are also capitalizing on this trend, stacking celebrity brands high on their shelves. This symbiotic relationship benefits both celebrities, who gain valuable visibility for successful projects, and brands, which enjoy increased credibility and access to a celebrity’s loyal following. By focusing on niche CPG brands that resonate deeply with their audiences and effectively leveraging relevant, strategic celebrity partnerships, retail investors can uncover potential gems in the crowded marketplace.

Samyr Laine is the managing partner at Freedom Trail Capital, a company that helps launch, manage and scale billion-dollar businesses and brands.