While younger generations were more digitally equipped to accommodate the demands of the pandemic, financially they’ve been hit the hardest. Euromonitor predicts the average global gross income of people between ages 25 and 29 will decline by 49% in 2020. As a result, marketers need to work harder to sell to young Americans.
Budget constraints have led to a shift in spending patterns and shopping behavior. Predictably, BCG found that Gen Z and millennials are increasingly turning to grocery shopping over take out and online marketplaces instead of specialty stores.
As the financial rift between generations grows, marketers must consider new strategies to target and attract young business. Changing preferences and growing financial unrest mean businesses have an opportunity to connect with younger audiences using empathy.
The Toll of COVID-19 on Gen Z
It’s not enough to segment based on generation: Marketers must understand the motivational trends that guide shoppers. That means your marketing efforts should treat each consumer as an individual, personalizing each sale. If your company is just beginning to work with less granular data, you can fall back on demographic trends, then overlay that data with richer profiles once you have it.
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According to our recent survey, one-third of Gen Z respondents (32%) said they were motivated to purchase from brands that offered comforting and empathetic brand messaging. In addition, as expectations for a human connection skyrocket, Gen Zers anticipate seamless, lifelike experiences as they log on from home. Failing to recognize these motivations can result in insensitive communications at a time when your audience is craving empathy and understanding.
With virtually half of younger consumers reporting they’ve been impacted by the pandemic, it’s even more important to avoid sounding out of tune. As shoppers work through one of the most chaotic periods in recent history, you can’t end your personalization efforts by simply adding a customer’s first name to an email. Think about the reasons people are driven to you in the first place. Work to keep shoppers engaged rather than awaiting a response, and remember that true loyalty provides lifetime value. Supporting consumers today ensures they return to you when they’re ready to make a purchase again.
5 Tips for Staying Relevant to Young Consumers
Your business can’t afford to lose the loyalty of young shoppers. Loyalty is far more complex for Gen Z and millennials than older generations due to fixed values and price points, and as a result is much harder to earn. So given their finicky loyalty, failing to personalize when it counts may cost you a customer for life.
- Support customers’ well-being. Many companies say they care about their shoppers’ and employees’ well-being, but their actions speak otherwise. To more authentically engage with consumers, consider your customers’ well-being and determine how their needs have changed. By identifying pain points, you can look for opportunities to put your products in context and shift offerings to better respond to your customers’ challenges — while staying genuine to your brand. For example, mattress companies pivoted to developing seating solutions after recognizing that most consumers are spending long days in home offices.
- Be vocal about your values. Messages that you send — or fail to send — can determine loyalty, particularly among younger generations. Gen Z and millennials are driven by ideals and their moral codes, which means brands can encourage lifelong loyalty by championing their own ideals. Big names like Nike are mimicking Gen Z’s alignment with values as a way to form identity, hyper-targeting certain segments of their audience to build fierce loyalty. Just as Gen Z finds identity in their values, they identify with products and brands they find relatable or niche. However, avoid leaning on your values as a gimmick or a flash-in-the-pan strategy: Gen Z and millennials will quickly turn to brands that more authentically embody their values.
- Create lifelike digital experiences. Our survey found that while Gen Z plans to buy online this holiday season, not all of them would do so given an option to shop brick-and-mortar. That means there’s added pressure to create lifelike shopping experiences for users logging on from home. Your business needs a strong digital presence across channels that are relevant to your shoppers. Pivot to a platform that enables effective omnichannel marketing and continuous improvement through logistics data. As in stores, customers should be guided to related products based on individualized criteria. Budget constraints and supply chain issues could lengthen lead times, meaning you’ll need to take greater care to bring customers back through low shipping costs and incentives to return to abandoned carts.
- Deliver value through sold products. Brands serve their customers best when they think in terms of providing real value, not in terms of opportunities to sell. Not every contact with a loyal shopper should be a direct ask. It’s critical to educate shoppers to help them receive the most value from a purchased product. If a customer just bought sneakers, for instance, what tips can you offer for wearing them to safely protest? Back-to-school shopping was likely harder for families this year — how can they repurpose supplies they may have already purchased?
- Be mindful of tighter budgets. To acknowledge younger consumers’ lost income, consider targeting shoppers with smaller transaction products. Marketers should expect increased purchases for smaller consideration purchases. For example, give customers recommendations based on similar products at lower price points and avoid displaying expensive alternatives to shoppers on a budget.
As we enter the holiday shopping season, brands and shoppers should be wary of scarcity. During periods of scarcity, brand abandonment is common. When shoppers can’t get a product from you, they’ll quickly find an alternative. But by focusing on building loyalty with value-driven younger shoppers, you create opportunities to gain lifelong customers who will wait to spend money until your product reappears on virtual shelves.
Garin Hobbs is the Director of Deal Strategy at Iterable, the growth marketing platform empowering B2C marketers to take control of their cross-channel messaging strategy by leveraging a highly flexible and scalable data model to inform a cross channel 1:1 conversation via email, mobile, web and social channels.