October 10, 2018

Generation Z Consumers: Engaging with the Digital Natives

2018, Retail Excellence

By Elizabeth Kershaw, Client Services Consultant, Planning

In a previous blog, "Why Should Fuel Retailers Care About Millennials," we spoke about how the expectations from the millennial group of consumers differs from the generations that preceded them. We provided ideas on how retailers could begin adapting their offerings to ensure they evolved to meet the needs of this generation of consumers.

While millennials should remain an important area of focus, the most forward-looking retailers will already be scrutinizing the next generation — Generation Z consumers (Gen Zs for short). They will be asking themselves how their offers and services meet the needs of this emerging demographic, which is already worth $44 billion.

Defined as the generation born between the mid-90s and the mid-2000s, Gen Zs exhibit many of the same characteristics as millennials. They value creativity, freedom, and individuality, but unlike millennials, they have grown up living most of their lives entirely online. Social media looms large in the lives of Generation Z consumers — as they spend an average of three hours a day on social media — 15 percent more than the millennial average. Their online interaction is predominantly on mobile devices rather than traditional computers.

Why do these evolutions matter? Because they change the relationships these consumers have with brands.

Social Media: Moving From Connections to Content

While millennials use social media primarily to make connections and gather information, Generation Z consumers are much more focused on content creation and consumption. They use social media to be entertained, to stay informed, and to seek recommendations before making purchases — a trend highlighted by the social media channels that Gen Zs seem to prefer. They tend to use Instagram, Snapchat, and YouTube more than Twitter or Facebook, and fuel retailers should consider this fact when creating and launching their online presence.

Engaging with Generation Z consumers will require a social media strategy focused on content that is engaging and easily shared; Gen Zs want to build a relationship with the brand. Unique, “Instagrammable” offerings are particularly appealing. For example, 7-Eleven Australia’s “Slurpee BYO Cup Day” had customers drinking Slurpees out of coconuts, kettles, shoes, water coolers, and a host of other interesting containers — all happily shared on Instagram using #BYOCUPDAY. Similarly, Starbucks’s Unicorn Frappuccino was a huge viral success. Better known on Instagram as #unicornfrappuccino, this colorful drink was available for only a few days, but was reported to have netted Starbucks a lot of press and sales during that short time.

Merging Online and Offline Experiences

Gen Zs are even more likely to see no difference between their online and offline lives. They slip from one to the other with ease and expect retailers to do the same. Experiential retailing — allowing them to experience unique events in-store which they can then share online — is particularly attractive, as proved by the recent popularity of pop-up concept stores and events. Gen Zs are not averse to using brick-and-mortar stores, but expect the experience to be convenient, fast and interactive with their devices when appropriate.

Again, Starbucks provides an excellent example of how to manage this integration. The Starbucks app allows customers to view the menu, order, and pay — all before picking up at the store — thus meeting the need for speed of service and convenience. Many convenience retailers already use tablets for taking orders at their food-service counters. Taking this one step further and letting customers order directly from their own devices would allow retailers to speed up their service even further, while also integrating their brand into the consumer’s digital universe.

Unique Data Insights for Better Branding

Engaging consumers directly through social media or a great app allows brands to continually interact with and learn about these digital natives, known as Generation Z consumers. This type of engagement helps retailers provide ever more relevant and personalized services. Gen Zs are happy to share information about themselves in exchange for services that are tailored to their preferences, and brands that can harness this data will be one step ahead in building brand loyalty with this generation of consumers.

Far from being entirely virtual, Gen Zs have shown a desire to interact in the “real world” with experiences and brands that have been successful in tailoring their offerings to their needs. The smartest retailers will adapt to these changes and thrive by providing convenient, individualized services, offerings, and promotions and building an individual relationship with each of these consumers. One thing is certain: Gen Zs will continue to increase in importance as their buying power increases.

To succeed in the fuel and convenience retail industry, retailers need to stay on top of trends like these. Learn how in our white paper, "Uncover hidden value with the 7 elements for fuel and convenience retail success." 
 

Download 7 Elements White Paper

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