Z: The Next Generation of Shoppers

Generation Z, the only generation to have lived its entire life with the Internet, is already driving changes in retail strategy and execution. Born approximately from the early to mid-1990s to the present, this cohort of consumers is causing marketers to adjust their lenses and understand where the generation is heading.Marketers have begun honing in on Gen Z as they have done with the Millennials, Gen X’ers and Boomers before them. “This generation is quickly coming of age,” says Heather Campain, director, shopper marketing & category insight, Johnson & Johnson. “They serve as the leading indicator of shifting values, and values are what drive behavior. The collective thinking on this generation is that this cohort is smaller in numbers than the Millennials (Gen Y) but poised to wield even more influence.”Some suggest that consumer product marketers are moving away from thinking about things through such generational lenses. “As we’ve evolved the way we go to market, we’re starting to talk through different types of segmentation,” says Bryan Jones, senior director of shopper marketing, Pepsi Beverages, PepsiCo. “On the consumer side, more of our segmentation conversations are around attitudinal segmentation. We take a look at how people are consuming and using products and what the drivers are of that consumption – and those factors tend to cut across cohorts.”Nonetheless, to understand how Gen Z differs from the Millennials who came before them, Shopper Marketing queried multiple consumer packaged goods professionals and solution providers to get a deeper understanding of this segment and hear how companies are adjusting their marketing lenses. On the following pages, we provide edited responses to our questions from the following industry experts:Alison Chaltas, EVP, GfKHeather Campain, director, shopper marketing & category insight, Johnson & JohnsonBala Mallela, senior director, category and shopper insights, Kimberly-ClarkDarren Kweitel, director shopper insights, consumer and marketplace insights, NestléTara Day, senior brand manager for Aquafina FlavorSplash, PepsiCoBryan Jones, senior director of shopper marketing, Pepsi Beverages, PepsiCoJonathan Asher, EVP, Perception Research Services (PRS)Regina Bailey, senior director of marketing to shoppers, UnileverBonus Content: New York-based agency Sparks & Honey provides a checklist for connecting with Gen Z.FOCUS: What you need to know“They’re going to be a challenge to keep up with because they grew up in a time where technology was becoming ubiquitous, information was endless and possibilities were hard to come by.” — Heather Campain“They’re on the go, their life is portable, and there are very few social filters between themselves and the world. Millions of people have the ability to know almost everything about them, and they don’t seem bothered by this.” — Darren Kweitel“This generation is more pragmatic, and the goal is to be a bit more financially responsible since they’ve grown up in an era with recession.” — Tara Day“They’ve been raised with the mindset that there might not be enough money tomorrow. They’re comfortable with technology, but whom they talk to, whom they get advice from (and how they relate) … it’s 250 people at a time.” — Alison Chaltas“There’s a huge shift in terms of the power teens have within their households today. Their definitions of healthy are going to be very different than other generations, and teen request is critical to all beverages, because if they don’t consume it, mom sees that as a big waste of money.” — Bryan Jones“Gen Z’s identities are shaped by financial challenges, global conflicts and environmental disasters. Goals are shaped early in life and grounded in the realities of today’s harsh world.” — Regina Bailey“They’re the first group to have always known the Internet. Gen Z is creating content, not just absorbing it, and they’re more socially conscious.” — Jonathan AsherFOCUS: Compare to generations past“They’re different from Gen Y. It’s not all about me.” — Alison Chaltas“No other generation has influenced older generations more so than Gen Z, mainly because of its highly tuned digital IQ.” — Bala Mallela“They’re much less influenced by traditional advertising. … Gen Z is in control of their own media, and they like creating things. They don’t just take what you give them.” — Jonathan Asher“This generation is somewhat of a compilation of greatest hits of the preceding generations – that sense of wanting to stand for something and change the world like Boomers, the pragmatism of Gen X’ers, and the connectivity associated with Millennials.” — Heather CampainFOCUS: Effect on marketing“Clean & Clear launched the “See the Real Me” campaign, which wonderfully synthesizes the core values and communication preferences of Gen Z. Rather than talking about acne, it’s about building self-confidence.” — Heather Campain“We haven’t figured them out completely yet, but companies are realizing that we need to allocate the resources to understand this segment really well.” — Bala Mallela“Homeplus (Tesco) opened a virtual store in a Seoul subway station in Korea back in 2011. The images are life-sized on pillars and doors, and it offers everything from fresh food to packaged goods. Download the app, take a photo of the bar code and have the products delivered same day.” — Darren Kweitel“The ‘Make A Splash’ marketing program for Aquafina FlavorSplash is speaking to creative and passionate teens. We know they like flavor and different forms, so we developed an entire platform for teens that they could have a fun beverage any way they wanted it.” — Tara Day“Gen Z’s exposure to research makes standing out in a crowded marketplace difficult.” — Regina Bailey“We’re starting to see a lot more with social consciousness and cause-related marketing. Not just more of it, but more interesting, appropriate and tailored.” — Jonathan AsherFocus: Advice“Know the Gen Z shopper, and know them for your category. We need to think about Gen Z shopper research and Gen Z understanding and not just make gross assumptions on what categories are important to them. They still care an awful lot about the in-store experience, and they care about traditional tactics, but with a new spin. Marketers can’t walk away from basic blocking and tackling in terms of category management and product demonstrations.”— Alison Chaltas“We’re working hard to listen and learn as much as possible so we can develop empathy for who we’re communicating to. The more we know and understand them, the easier it will be to connect.” — Heather Campain“Be authentic, and have a two-way dialogue that is equal parts talking and listening. … We need to be a trusted guide, offering council and support every step of the way.” — Bala Mallela“Make sure you’re on top of new and emerging technology, and engage with your audience instead of just speaking to them about your product. Home in on things they care about.” — Tara Day“Make sure you listen to them more than anything. Be genuine.” — Jonathan AsherFOCUS: Going forward“Gen Z will be more ethnically diverse, and communications need to adapt to that change. They will also be more selective in choosing brands and more demanding that brands uphold their values.” — Regina Bailey“Mobile shopping, mobile research and mobile sharing has to be a part of everybody’s shopper marketing plan. It’s intuitive for them, just like Gen Y’ers are intuitive of going on the Web. So get over e-commerce, it’s m-comm now.” — Alison Chaltas“Understanding this generation will be very important since the prize of winning is huge in terms of loyalty. Retailers need to be able to relate to her world and understand her unique needs.” — Bala Mallela“The impact is clear – more portable and faster. If you can’t adapt your business to these ever-evolving needs, then your ability to grow your business via these shoppers will certainly be a challenge.” — Darren Kweitel“They’re growing up in an age of change. They don’t get as attached to anything today because it might not be around tomorrow.” — Jonathan AsherFOCUS: Impact on shopping/household purchases“Given technology is their life, they’re more likely than any other generation to self-educate by sourcing products online, seek information and make decisions based on social networking.” — Darren Kweitel“It’s only beginning to emerge. This group is less brand loyal and thinks more about what works in this moment in time.” — Jonathan Asher“The most direct influence we can feel right now is that they’re both helping their parents go digital and then using their parents’ money to shop digitally.” — Alison Chaltas“Gen Z is known for maturing more quickly than their Millennial counterparts. They tend to see themselves in a mutual-respect relationship with their parents – they consult each other and have a more collective approach when it comes to household decisions.” — Heather Campain“Gen Z parents report being highly influenced by their kids in shopping. In order to develop a relationship with this future consumer, we must understand who she is and meet her needs better than anyone else. Providing a seamless exchange of information between digital and retail is critical, and we need to provide a multisensory in-store experience.” — Bala MallelaFOCUS: Brand preferences“It depends on the category, but this generation is able to identify brands much earlier today.” — Bala Mallela“They’re very astute and have been exposed to every form of media from a young age. And they’re very influential in their parents’ lives.” — Heather Campain“It’s less about age and more about lifestyle changes. Each life event is an opportunity for retailers and brands to change the paradigm and grab those shoppers who then likely will get in the habit until the next life change.” — Alison Chaltas“Whatever you grow up with in your house, that’s what you tend to resonate with – or are at least more familiar with.” — Tara Day“Previous generations have given these kids a voice, and they’ve grown up with the expectation that their opinions matter.” — Jonathan Asher

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