How Retailers Can Win Over Gen Z

Gen Z is becoming one of the most powerful generations in terms of consumer purchasing power, and the young shoppers are already the economy’s leading tastemakers. Therefore, it’s no surprise that retailers are competing for their attention. But how can they stand out?

Retailers can begin to command Gen Z’s dollars by understanding the nuances of what they care about, who is influencing them, and where to find them. Gen Z is known as digital natives, but making blanket assumptions about this generation is a missed opportunity to gain brand loyalty from this passionate consumer. Brands can start by taking a data-driven approach to build a strong social media presence, tap into the generation’s interest in nostalgia, and support causes authentic to their brand.

Building a Social Media Presence

For Gen Z, social media is the most significant source of shopping inspiration. In fact, 97 percent of this generation uses social media to guide their shopping, according to Forbes, so leveraging the one-to-one relationships these platforms have established is a no-brainer. And with 60 percent of Gen Z turning to Instagram for new brands and products, retailers can’t afford to sit on the sidelines.

Partnerships with influencers are now common practice, but like most digital channels, the most strategic play is no longer the top-ticket influencer that covers millions of followers. Understanding the creator's audience is more important than the size of that audience. This data-driven approach is how you can authentically align a partner with any business objective. As such, retailers can capitalize on the creator's captive and loyal fans to meet their target customers where they are.

As retailers partner with influencers and build social media presences, understanding if the content they're producing resonates with their customers is key. Deeper audience insights, what they care about, their lifestyles, and what they consume, help brands identify creators as well as content topics and formats likely to resonate with their audience or help them reach a new one.

Tapping Into 2000s Nostalgia

For a generation that was born around 9/11, grew up in the most severe recession since the Great Depression, and came into adulthood during a pandemic, nostalgia is a source of comfort. Therefore, it’s perhaps no surprise that half of Gen Z favors the brands they grew up with.

The Y2K aesthetic has never been trendier. From low-rise flare jeans to butterfly clips, what’s old is new again. Retailers can take a hint from this sweeping trend by tapping into nostalgia marketing, incorporating the early 2000s style into their creative.

From mall brands like Abercrombie & Fitch to high-end fashion houses like Miu Miu, the nostalgia trend transcends time by reminding younger consumers of more carefree times.

Aligning Genuinely With Causes They Care About

The call to action for young people extends to financial decisions, and Gen Z holds brands and their ambassadors to account. According to Helixa’s Total Consumer View (its fusion product with MRI-Simmons), members of Gen Z are 43 percent more likely to shop from brands that support social causes that align with their beliefs.

But empty words won't cut it. For example, 59 percent of Gen Z say they would pay more for a product if it’s safe for the environment, according to Helixa and MRI-Simmons research. The generation is also known for valuing authenticity, so brands that praise environmental action while donating to politicians averse to environmentalism risk criticism. The key is to be vocal about the positions your brand is truly prepared to stand by; find the values that are authentic to you, and put your voice behind them.

Gen Z represents a $360 billion opportunity. To compete for those dollars, retailers will have to leverage deeper insight into what this vocal and trendsetting generation cares about and how they live. Social media engagement, nostalgic throwbacks, and genuinely impactful activism are just the tip of the iceberg. These strategies reflect the high standards of authenticity and accountability to which young consumers hold brands and influencers. This is what our next generation of shoppers is demanding; retailers should answer the call.

Laia Pescetto is the vice president of global marketing at Telmar, a company that provides strategic targeting and media planning solutions to advertisers, agencies, data suppliers and media sales houses.