Image Source: IRCE
What Do Gen Z And Alpha Want From Brands?
Generation Z and Generation Alpha’s relationship with technology is, naturally, yielding different shopping habits from older audiences as the younger generations grow into consumers.
In a session at the Internet Retailer Conference & Expo in Chicago last week, Kit Garton, vice president of product at Chubbies, David Morin, vice president of customer strategy at Narvar and Tanya Brinich, senior director of client success at ThredUp, discussed with Julia Berk, head of consumer insights, North America, at Snapchat, the emerging trends they have observed with Gen Zers/Alpha-ers, and gave recommendations about how brands can win the business of these cohorts.
Ms. Garton characterized Gen Z as a generation raised with access to everything, not just online but mobile in particular, leading to an expectation of immediacy, including from retail interactions and in areas like shipping.
“As a brand, it’s really important to make sure that we are optimizing our online and physical experience to meet that instant gratification, that instant dopamine hit as we’re working with Gen Z,” Ms. Garton said.
The centrality of the smartphone to that generation’s experience has led to text messages becoming a more effective customer service channel than other online contact methods.
“Most younger generations don’t like email,” Mr. Morin said. “They prefer mobile first.”
Mr. Morin said brands should make sure to have an SMS strategy as part of their transactional program.
Chubbies stopped publishing its customer service phone number and, with 50 percent of customer service interactions handled through text and most of the rest through email, has seen its agents’ satisfaction scores improve.
In terms of transactions, Chubbies finds that while 80 percent of their online traffic is mobile, far fewer convert via mobile, which for Ms. Garton illustrates the value of implementing digital wallets and mobile payments to ease transactional friction for younger customers.
This tracked with research from Snapchat, presented by Ms. Birk, which anticipated Gen Alphas never using physical wallets.
Ms. Garton also recommended hiring Gen Z staff and empowering them to make decisions on things like product design and copy, even if a given idea perplexes an older audience.
“I might not understand it, but our customer base sure does,” Ms. Garton said.
Discussion Questions
DISCUSSION QUESTIONS: Do brands need to consider the panel’s observations and how can they best fit them into their business model? What additional consumer characteristics have you seen emerging in Gen Z and Gen Alpha that brands should be aware of?
Poll
Loading …BrainTrust
Georganne Bender
Principal, KIZER & BENDER Speaking
Katie Thomas
Lead, Kearney Consumer Institute
These points are fair, but I wouldn’t get bogged down in the narrative that Gen Z and Alpha are digital/mobile primarily. In our research, Gen Z consumers are just as likely to say they prefer to discover and purchase products in-store rather than online, and are also often more likely to say they want to unplug from their digital world. In order to have a full picture of their behaviors, all channels must be considered together – not disparately.
Great point Katie. And, remember, demography is not destiny. Cohorts change over time. That’s why you don’t see Boomers dancing naked and body painted in public parks (Thank God) or Get Xers walking around in an existential funk wearing “Greed Is Good” hoodies (Thank God again). What separates Gen Z and the Alphas is that they have grown up with digital tools, but plenty of Boomers, Xers, and older Millennials aka Gen Y shop by phone in the same way many younger shoppers shop in store. As any anthropologist will tell you, smart animals use tools.
Gen X is still in an existential funk, that never went away. No one cared how we dressed – anything we did was criticized. We did get rid of neckties once and for all, however.
The payment observations about reducing friction when using mobile is something I’ve witnessed myself – I have seen Gen Z get to the checkout page on a mobile site and pause – “Oh, they don’t do Apple Pay? I’m not sure I need it that badly”.
And the phone number thing – I have come to the conclusion that no amount of demonstrating otherwise will convince Gen Z that sometimes it’s just easier and faster to actually dial a number and speak to someone live. But I think retailers and brands should pay real attention to just how anxiety-inducing that is for that generation. It’s not about preference – it’s about anxiety avoidance, which puts supporting SMS, chat, etc. at a whole other level of urgency for companies looking to engage and enable that generation.
The notion that digital wallets and mobile payments are the keys to decreasing the mobile abandon rate is a stretch. Mobile abandon rates have always been incredibly high and I’m not sure it’s entirely due to “form of payment.” I think brands need to appeal to all their demographics with sincerity and with a great product. Many brands today claim sustainability and associate themselves with charitable causes but few seem sincere in those pursuits leading to the sentiment that “it’s just marketing.” In the end, we are a nation driven by consumerism. Be sincere, put forth a great product and make it easy for people to buy from you wherever they choose to do so – easier said than done!
We have all seen brands go full throttle chasing one generation at the expense of another. It’s a fine line because what’s hot for one generation is kryptonite to another.
Brands would be smart to find out what each generation expects from a shopping experience and deliver whatever that is with deliberate care. Not publishing your customer service phone number seems counter productive when you say your customers want instant gratification.
Brands aspiring to be enduring will actively and intentionally seek an understanding of every customer segment, including Gen Z and Gen Alpha – then mindfully find ways of mitigating what these customers see as friction in the customer experience – whether it be customer support, online payment options, etc. These two “generations” in particular look for brands who are truly authentic in their brand promise, who operate with honesty and honor, and who are socially and environmentally responsible.
Beyond a mobile-first experience, young consumers want brands they can trust. Reviews, user-generated content, celebrities and influencers build trust and sales among Gen Z and Alphas.
Brands that are fun, entertaining and social community magnets have an edge among these cohorts.
Spot on Lisa!
Not publishing your customer service number sends a message. “I don’t want to talk to you.”
Gene, you stir up several pet peeves about customer relations:
1) Ditto on no cutomer service number – or almost worse, a 20 branch automated decision tree. 2) 30+ minute holds while the robot tells me repeatedly how important I am. 3) The invitation to submit something via the website and never getting an acknowldgement of having done so never mind an actual response. 4) Not a single reference on the website to a human being, which means you’re trying to relate to a soulless machine. And we wonder why customer relationships are disintegrating.
Had a telephone line down in my backyard after a big storm this spring (not my own line, even), and it took me a week to figure out who the utility was – CenturyLink. For many of you in the middle of the country, I can hear the moaning already. Long phone tree with no obvious reporting option. 90 minutes on hold before being able to speak to someone. Human being did not have a script and had to put me on hold five times. Assured me someone would be over in a work-week. One month later, with cord still draped over my yard… I used their chat service – still took a half-hour, but a contractor was there within 20 minutes. That was exhausting, and I am a Comcast customer.
The key takeaway that I got from this article is that call-in customer service is ready to emit its death rattle. As an elder millennial, I’ve been encouraging companies to offer online CX for quite some time.
Retailers need to realize that many Gen Z-ers, Alphas, and Millennials are phone-phobic. Dated, largely illegal call-to-cancel policies (as I covered in this article last year https://www.therobinreport.com/retailers-policies-deter-memberships/) are one of the worst tactics for consumer retention.
In 2023, word spreads like wildfire. Gen Z and Alphas are demanding the retailers they spend with work with them, not against them. The more retailers can make purchasing from them a collaborative experience, on the channels next gens prefer (mobile and physical), the better positioned they’ll be when Alpha’s step up to the economic plate.
They want:
1. Integrated online/offline
2. They want fun, interactive, immersive, multi-dimensional experiences
3. They want authenticity
4. The want you to forget about the idea of a sales and marketing funnel
5. And most of all they have one demand “spoil me, or else” – Spoil them or else they will find the brand that does.
The #1 thing to be aware of and practice is to be sincere. Gen Z and Gen Alpha can smell insincerity a mile away. If your business believes in something don’t treat it like a promotion. Show your passion for ESG, Diversity, Inclusion, Parental Leave, Fair Working Conditions/ Fair Wage every business day. Whatever it is do it, show it, support it 24/7/365. If you think a social post celebrating Juneteenth makes your company look good and believe it will create positive vibe or higher satisfaction from Gen Z and A – you are fooling yourselves. The 13-17 & 18-34 age segments know better. They are watching you every day and aligning with sincere brands who live their values every day.
Yes, as more Gen Alpha and Gen Zers age, enter the workforce and grow into consumers, their shopping habits will be important for retailers to keep in mind. As the panel discussed, these two generations are especially interested in efficient shopping experiences, leaning into social commerce, SMS-based service reactions and mobile wallets. Looking at the immediate future, these generations are used to sharing their data and information online and with retailers. As a result, they expect to reap the benefits of it through personalized interactions, from search to product recommendations to marketing campaigns.
Brands must continuously re-evaluate their tech stack to ensure they have the right tools to provide the most personalized, convenient shopping experience that meets these expectations.
In my opinion, for the younger generations, shopping can be seen as a form of work, unless they are going out with their peers. Furthermore, when Gen Z and Alpha customers decide to buy something, they want it right away and expect immediate fulfillment. If retailers are unable to provide same-day delivery, this generation may lose interest and move on to something else.
I strongly believe that brands need to reconsider their go-to-market strategy and accurately identify their target customers. Once the target base is established, brands should modernize their product offerings to capture the attention of Gen Z and Alpha consumers.
Additionally, I think the mobile aspect of the article is critical because the younger generation’s lives revolve around mobile phones. They do not want to carry cash or credit cards, let alone a wallet, which feels like an “extra” item. Retailers should be prepared to accept payments in whatever form the younger generation prefers, as it would be embarrassing for a store to be unable to provide easy mobile scan choices such as “Apple Pay”.