Retailers struggle to understand Gen Z because of their conflicting purchasing motivations. They want low price points, but clothes that withstand the test of time. They want near immediate trend responsiveness, but sustainably manufactured goods. They want brands to stand for a cause, but will nix a brand forever for taking the wrong stance on a social issue. With so many conflicting motivations, what’s a well-intentioned retailer to do to win Gen Z loyalty for the long haul?
Gen Z’s age range is between 10 to 25 years old. Members of Gen Z were born anywhere between 1997 to 2012. This generation makes concrete changes that those that came before them only dreamed of, which has won them the respect of other forward-thinking demographics. With that said, no retailer or supplier has ever called Gen Z an easy sell. Unlike millennials and Gen X, Gen Z doesn’t buy into the idea of a brand; they buy into the efficacy of a specific product, based on its perceived usefulness. This is why there are so many in-depth product application videos in recent social media ads — next-gens want to see their potential purchase put to work before they buy in.
In this article, I’ll answer some of the most vexing questions about Gen Z customer loyalty. So, let’s take a look at how retailers can pave a path to success with this highly discerning and frugal customer demographic.
Misconceptions about Gen Z loyalty
Retailers aren’t the ones setting the fashion precedents anymore... social media is. But this doesn’t mean that social media is the only thing retailers need to think about. Legacy retailers have been trained to think about customers on a macro scale, appealing to next gens happens on a case-by-case basis. It’s a mistake to think of Gen Z as a disloyal consumer demographic. It’s simply untrue: 42% of Gen Z will stay loyal to a brand forever if they have continued positive purchasing experiences. The purchasing experience, however, is highly individualistic. It’s rooted in product quality and customer service.
While a strong social media hype team can certainly help to connect with customers and make initial sales, we’re still living through a global pandemic. How a company responds when the item isn’t delivered as promised, how they address supply chain shortages, and the individual staffing choices they make –– who are ultimately the people interfacing with customers –– are the decisions that will make or break company loyalty in the long run.
Harness the power of social media to retain young consumers
Let’s talk about a term that so many are volleying around in retail these days: “social commerce.” All too often, retailers attribute the lack of next gen customer loyalty to their brand to the prevalence of “call-out culture” or “cancel culture.” Social media initiatives like #pullupforchange, which now has over 112 thousand followers, have legacy retailers in a perpetual state of inaction. They’re over-censoring, afraid to say anything for fear of being labeled a hypocrite. Instead of taking tangible action on social issues, they focus on the aesthetic of their inventory and social media profiles. Now, if you’ve seen the Y2k flashback fashions that Gen Z are shelling out for, you should already know that aesthetics are not their bottom line.
Millennials are all about connecting with a brand’s mission statement; Gen Z wants to connect with a brand’s workers and supply chain. The two are not the same. Now that every customer and employee has the power to write reviews, anyone can be a brand’s champion on social media. But transparency doesn’t mean perfection.
Take a look at Adidas, one of Gen Z’s favorite brands. Adidas came out and said “we aren’t where we need to be in terms of human rights advocacy, supply chain transparency and working conditions, and sustainable manufacturing. But here’s what we’re doing to get there and our timeline for doing so.”
It’s the honest assessment, continued action, and regular updates that resonate with next gens. Adidas isn’t greenwashing, or glossing over hypocritical practices. They’re creating an honest brand assessment, making real changes and measuring the impact, then –– and only then –– are they throwing a parade for their practices on social media.
Where retailers fall short with Gen Z
All too often, we see retailers try to use generalized data to appeal to highly specific customer demographics. This causes a lot of confusion. We have to remember that we are talking about an entire generation of highly diverse individuals with their own unique values and lifestyles. Gen Z is the most diverse batch of humans to grace this planet and they want that to be recognized in retailers’ marketing efforts. So, while there still are some overarching themes for Gen Z, such as values-driven purchasing, frugality, and self-expression; retailers need deeper insights than statistics alone to achieve lasting loyalty.
Take Deloitte’s most recent study. It found that 64% of Gen Z would pay more to purchase an environmentally sustainable product, while 36% would choose a cheaper product that is not as sustainable. This is a significant bifurcation, and it explains why fast-fashion retailers with nebulous reputations are still making sales despite Gen Z’s affinity for values-based purchasing.
Too many retailers are hyper-focused on bottom line profit metrics while neglecting the grassroots customer experience. Customer service, in the modern age, isn’t effective when siloed. Things are changing so quickly that new supply chain issues continually arise, such as shipping issues, understaffed warehouses, empty packages, understocks, and more. A brand’s CX response times and ability to effectively resolve issues are key.
The worst thing a retailer can do is make an individual Gen Z-er feel unimportant. Millennials were the first generation that demanded to be seen and marketed to by retailers, but Gen Z takes this to the next level. They don’t want to wait for a response for days while team members seek out feedback from the C-suite. A seamless communication process between all branches of your business –– manufacturers, suppliers, shipping and physical stores –– is a must-have, so you can nip supply chain issues in the bud as they arise. When every Gen Z customer feels like your company is going above and beyond to address their needs, they’ll have no reason to look anywhere else. It all comes back to communication. Which all comes down to finding the right retail management software solution.
Basic retail management software doesn’t give companies the necessary tools to create an agile supply chain. Even retailers and suppliers that identify the need for PLM software can choose the wrong solution provider, and wind up lacking the features that fueled their investment. There’s only one retail PLM solution that guarantees 10X ROI in a single year.
Jasmine Glasheen is Content Marketing Manager at Surefront. Glasheen is also a retail thought leader with a special focus on generational purchasing behavior. She has presented her thought leadership at industry events such as: The Ohio State Digital Solutions Gallery, ASD, The Perry Ellis International Sales Conference, Shop.org, the classrooms of NYIT, and many others. Find more of Glasheen’s unique insights at the Surefront Blog or on The Robin Report.
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