Keeping Gen Z happy might be the path retailers should take to build a better customer experience for all the alphabet generations and others.
Retailers are sometimes a bit like anthropologists — studying the rituals, values and mores of various tribes to better understand what makes them tick. It’s an occupational hazard, what with trying to sell to millennials, baby boomers, Gen X and Gen Z among others. It was the Gen Z crowd that a panel at NRF’s Big Show dug into on Monday in a session that noted the demographic represents $44 billion in buying power. And the more Patrick Duncan, of Helzberg Diamonds, Billy May, of Abercrombie & Fitch and Chris Wong, of IBM talked, the more it seemed that what Gen Z shoppers — ages 13 to 21 — want might not be so different from what most consumers want. At the center of the conversation was research by IBM, which was based on interviews with 15,600 members of Gen Z. (Not that’s not all of them. Just a lot.) And some of the findings were surprising. First there’s that $44 billion thing, which apparently is based on the finding that Gen Z members influence 93 percent of household spending. Ninety-eight percent of them shop in stores, with 67 percent shopping in stores most of the time. Yes, Gen Z lives on its smartphones That doesn’t mean they’re not smartphone natives. The study found that 75 percent say mobile is their device of choice. Nearly 90 percent are connected to high-speed internet at home and 44 percent said they don’t watch TV. All of which, taken together, makes them worthy of study, Wong said. “This is the connected generation,” he said. “This is the generation that is, as we all know, not only born online and born on mobile, but their ability to be connected is really part of their neural network. It’s their fabric.” Which is something for retailers to think about, given IBM’s look into retailers’ preparation for the next generation of money-spending grown-ups. “They’re not really ready for this generation,” Wong said the research concluded. “A lot of the things that they’re doing today are still geared toward the baby boomers, toward the millennials. They haven’t really started to think, ‘What’s different about this generation?’” With that in mind, here are a few takeaways about the lucrative generation gleaned from Monday’s panel discussion: Manage expectations: Gen Z has high expectations for e-commerce sites and the digital shopping experience, May said. “The expectation is it’s all seamless, integrated and most importantly it works and it works very quickly.” Now, nobody is perfect, so when it’s not all seamless, integrated and when it doesn’t work or work quickly, retailers need to react — fast. “If they expect it immediately, but you manage the expectation and say you’ll get a response within X number of hours, often you’ll find that they’re accepting of that. And you want them to be accepting, because one other thing Gen Z is: social. If something goes wrong, their social networks will know about it instantly. And so retailers need to be ready to address problems, through customer support, social media and, May says, by giving store associates the power to do what’s necessary to make something right. Be quick about it: Think about it. Gen Z has never known a world without Amazon and they expect to get their stuff fast. “This idea of wanting things quickly,” Duncan says when asked about the Zs. “They don’t really care where it is shipping from. If we don’t have it in-store, it better be coming from another store.” Gen Z just expects it to happen. Make them part of the experience: Gen Z expects to participate in their commerce experiences. And they expect to do that by their own choosing. May said Abercrombie’s Hollister brand started a loyalty program, Club Cali. “The idea is, there is an experiential element included in that.” Hollister teamed with SnapChat to create location-based filters that customers could use to post and share the Hollister love with friends. "Instead of drawing the consumer to our app, it’s where they’re spending their time and how we become relevant to them.” Helzberg lets consumers design their own jewelry online or in the store, Duncan said, which is an opening for Gen Z to participate in a very meaningful way. They also participate enthusiastically through social media. Jewelry isn’t so much about a thing, Duncan said, but about the emotion and meaning behind the thing. Expressing that truth is social media gold and a sign of how commerce is changing. “They’re now creating content on the web. It’s content that we’re now being tagged (in) as part of that great experience,” Duncan said. “Being able to share with a brand something they got as a gift, you couldn’t do that five years ago — or people didn’t want to.” And he said that the trend is only going to grow and retailers need to be ready. Be authentic: “They’re going to look at the companies they work with not just as a product but what you stand for,” Wong said of Gen Z, citing IBM research. “Do you do what you say you’re going to do?” And if you don’t, he added, they’re gone. Both Duncan and May said their companies are very clear about things such as sourcing of goods, a particular issue in the diamond trade. Duncan said sourcing used to be something jewelers didn’t want to talk about. Now, it’s a selling point, he said. He explained that Helzberg has a “My Diamond Story” program, which allows customers to trace their diamond from the mine to the purchase. Authenticity goes to the issue of how you handle customer data, too. May said there was a time when retailers took the approach of collecting all the customer data they could get their hands on whether customers liked it or not. Times have changed. Consumers deserve a say in how their information is collected and used. “Now it’s, ‘I want to create a relationship with you. That is absolutely a clear expectation.” And if you hire Gen Z, build tools with them in mind: This is the iPhone generation, a group that has grown up with smartphones with intuitive functions. The gizmos often given to store associates, on the other hand, are very IT-oriented, May said. That’s not going to cut it with a generation that wonders why work tools aren’t every bit as intuitive as the digital devices they live with every day. “The Gen Z associate that is up and coming, is much savvier,” May said. “Our belief is those interfaces that we develop and employ need to be developed from the consumer backwards, so the interface needs to behave and look like a consumer-facing orientation.” It’s hard to argue with May, Duncan and Wong when they talk about ways to connect with Gen Z. As a matter of fact, And, as a matter of fact, it’s pretty good advice for attracting the rest of the alphabet, too. Photo by Mike Cassidy Mike Cassidy is BloomReach’s storyteller. Contact him at email@example.com; follow him on Twitter at @mikecassidy.