Born in the mid-1990s to early-2000s, the big problem with this group is that they simply are not buying that much, either because they are not so interested in consuming in the same way as previous generations, or because their spending power is compromised.
Research recently carried out by the NPD group into the way Generation Z consumers in the US are behaving has hit upon three areas where engagement can be maximized, some of which are surprising.
The three ways to engage Generation Z:
- Retailers and brands need to offer digital in-store experiences
- Use of new digital platforms, like Twitch and other gaming services
- Brands that offer purpose and convenience
Perhaps the most surprising of these three points is that retailers are on the list. But an eye-catching statistic is that Generation Z does more shopping in brick-and-mortar stores than their older millennial and Generation X counterparts.
Generation Z like to buy in stores
According to NPD statistics, across the board in-store shopping still outpaces digital shopping, but drilling down on this statistic it is very interesting to see that 62% of Generation Z consumer shop in-store, as opposed to just 50% of millennials.
Yes, Generation Z are shopping at bricks-and-mortar more often than their older, less digitally inclined counterparts!
But the trick is to engage this younger generation of shoppers through digital in-store initiatives, particularly Augmented Reality to enhance product displays and draw attention to innovation.
According to an NPD consumer panel, the research team discovered that a combination of promoting e-commerce DTC channels, with limited special edition product lines was a winning combination to entice Generation Z consumers into stores in the first place.
Connecting with the audience through gaming
Gaming is massive amongst this generation, particularly with boys in the age group 13 – 17.
“Videos games aren’t just about gaming anymore. Gen Z was the first generation to be raised fully immersed in a digital environment, resulting in a high level of connectedness on digital platforms,” explained Dr. Heather Nofziger, Director of Consumer Research at EEDAR, an NPD Group company.
“Thus, it’s only natural for video games to extend into other aspects of young gamers’ lives.”
This in turn is creating opportunities for brands to sponsor gaming content targeting this type of audience, giving way to a highly targeted and potentially effective means of engagement.
It’s all about purpose and engagement
With limited spending power, Generation Z want to buy products that they will use, that bring value and, in particular, are also convenient.
For beauty brands, this means developing products that are at a reasonable price point, are multifunctional and that can be used quickly and conveniently.
“Success will come from doing it right, differently, and with added benefits. Innovation drives growth,” said NPD Chief Industry Advisor Marshal Cohen. “Whether it’s in a video game, an app, or a store, now’s the time to discover fresh ways to rise above the noise.”