Redesigning Your Brand for Gen Z? Start With These Best Practices

Consumers seek out brands that share their values, know them well, and provide the experiences they expect. Smart retailers leverage this knowledge to build customer relationships that endure. However, when it comes to relationship building with Gen Z — the cohort of consumers born between 1997 and 2012 — seasoned decision makers sometimes struggle to understand the values, motivations and behaviors of this unique generation that’s flexing its consumer influence in new ways.

The first thing to understand is that these consumers already wield $360 billion in disposable income in the U.S. and $4.4 trillion worldwide. The oldest Gen Zers are turning 24 this year. As this generation ages and moves into careers, their spending power will only grow — and their brand loyalties are being formed now.

The second important thing to understand is that because Gen Z is so different from preceding generations — in terms of diversity, insistence on authenticity, and fluency in digital experiences — connecting with this cohort offers retailers the opportunity to modernize their brand stories and experiences, or build them from the ground up. Updating or creating your brand will require moving away from standardized experiences to meet a whole new slate of customer expectations. These best practices are a good place to start:

1. Put loyalty first.

Traditionally, retailers have viewed loyalty as a level of trust that’s earned after a series of engagements with the customer. That process needs to be flipped to succeed with Gen Z. Loyalty offers up front are a way to get their attention and to collect the first-party data brands need to create a single view of customer behavior. That level of insight is critical early in relationships because Gen Z has spent their whole lives interacting with algorithm-driven digital platforms. As a result, they expect brands to recognize them and understand their needs in context.

For example, an athletic wear brand uses its free membership app to drive digital and in-store customer experiences, while collecting data that helps to continuously improve product, service and event recommendations.

2. Give Gen Z the tools for multifaceted self-presentation.

Gen Z consumers want to project different facets of themselves, and the traditional boundaries defining identities in past generations are blurrier now. Consider that 41 percent of Gen Z say they “identify as neutral on the spectrum of masculinity and femininity,” and one in three say their most authentic self is their online identity. Those numbers help illustrate why this generation doesn’t consistently follow a single traditional young-adult aesthetic. Rather than consistently present as a preppy kid, jock, goth or something else, this generation is more likely to pull elements from each of those personas to create something that feels true to them.

Brands that help them express different facets of their identities are likely to earn their loyalty. This is an area where legacy brands can experiment. For example, an outdoor brand with a longtime customer base of hikers and mountain climbers became a “gorpcore” streetwear must-have among teens and young adults during the pandemic by partnering with celebrity influencers and other popular brands.

3. Use nostalgia and community to foster a sense of belonging.

One of 2020’s hottest items among Gen Z shoppers was a puffer coat first produced in 1996. In fact, Y2K-era fashions were popular through 2021. That’s because younger consumers balance their desire to express their individuality with a desire for connections to the past. Nostalgia, in the form of shows like “Stranger Things” and vintage content that’s now online helps Gen Zers find traditions and styles they can try out and perhaps use to shape their future selves.

In addition to connecting with the past to express their individuality, Gen Z consumers also seek out communities online and communities that blend digital and real-world experiences. Savvy brands are leveraging this desire for connection by meeting their Gen Z customers where they gather, such as digital gaming platforms and hybrid digital/in-store experiences.

4. Rethink the role of the physical store.

Gen Z consumers shop differently from previous generations, so the role of the brick-and-mortar store must evolve. Rather than present a traditional boutique or department store experience, some retailers are turning their stores into a kind of clubhouse or playground where customers can gather to get ideas for their personal aesthetic, try out products they may later buy online, and connect with their friends and peers.

For example, one legacy luxury retailer opened a social retail store in China to provide an immersive, hybrid experience for social media-savvy customers. The store is integrated with Pokémon and features virtual try-on technology that allows shoppers to see on their phones what a garment on the rack will look like on them — no trip to the fitting room required.

5. Meet Gen Z’s desire for luxury and sustainability.

That social retail store example highlights the spending power that Gen Z deploys in the luxury category. A 2022 Bain report found that through 2030, Gen Z’s luxury spending will grow three times as fast as other generations’ will. The report also found that unlike previous generations that made their first luxury purchase at age 18, on average, the average Gen Z shopper makes their first luxury purchase at 15.

At the same time, Gen Z is also a powerful force in the resale space, where it outpaces other generations in buying and reselling clothing, shoes and accessories. Gen Z consumers may choose resale for trendy vintage items like the 90s puffer coat because they view resale as more sustainable than buying retail. Sustainability is more important than brand for more than 75 percent of Gen Z shoppers, which means that luxury brands must also show their sustainability credentials.

What about luxury brands that are also sustainable? It’s wise to focus on one aspect or the other, with the other element in the background. For all brands, it’s smart to focus on one of these elements. Ignoring both luxury and sustainability leaves brands in a boring middle ground that Gen Z shoppers are likely to overlook.

6. Evolve brand experience along with Gen Z trends and attitudes.

Focusing on loyalty, identity, community, fresh retail experiences, and the desire for luxury and sustainability can help brands strengthen their connections with Gen Z customers. Keeping up with their changing tastes as they grow up and move into new life stages requires ongoing monitoring of trends. In addition to customer data from loyalty programs and other digital channels, there are new artificial intelligence tools that mine social chatter to identify trends as they emerge.

Connecting with Gen Z is different from connecting with any past generation. It’s a challenge, but also a unique opportunity for retailers to drive engagement, create value, build loyalty, and improve their performance.

Liron Reznik is an executive strategy director, head of consumer strategy and head of brand strategy at frog, part of Capgemini Invent, a global creative consultancy.