Retailers say recognizing Gen Z is key to business success
TORONTO, May 28, 2019 /CNW/ - Millennials tend to receive the most marketing attention from retailers, but many now realize that Gen Z is proving to be a powerful economic force, perhaps even more so than previous generations. This poses a tremendous opportunity for retailers and those who take action now have the greatest chance for success.
A recent survey commissioned by American Express Canada and conducted by Nielsen reveals discrepancies between retailers' priorities and the unique needs of Gen Z. More specifically, while a majority of retailers (51 per cent) claim a need to reach and understand this burgeoning generation, only 25 per cent of those retailers currently market to Gen Z.
"While it is clear retailers' marketing efforts will likely continue to shift focus to Gen Z, there is a gap to bridge between Gen Z's unique needs and what retailers are doing," says Kerri-Ann Santaguida, Vice President and General Manager, Global Merchant and Network Services, American Express Canada. "There is an incredible opportunity for retailers who take action today, as the influence of this soon to be powerhouse generation continues to grow."
Who is Gen Z?
To better understand this age group, Nielsen on behalf of American Express Canada, surveyed Gen Zers aged 15 to 22 years. These findings suggest this group is grounded and financially savvy, with 72 per cent currently saving money for future expenses/investments and one-third (33 per cent) paying for 100 per cent of their own expenses when shopping for personal items. Survey results suggest they are a generation who cares about quality and authenticity, with 63 per cent choosing better quality products as the one of the top three factors that influences them to spend more on a brand and 45 per cent saying they are influenced to spend more on a brand when friends or someone they know shops there.
Brick and mortar is not a thing of the past
While it's no secret Gen Z are digital natives, an underlying insight throughout the survey illustrates their appreciation for in-store shopping experiences. In fact, 65 per cent of Gen Zers prefer to shop at brick-and-mortar, which is more than double the number of those who prefer to shop online (32 per cent). More specifically, 51 per cent of Gen Zers stated that their ability to see and try a product before purchasing may influence them to shop at a particular retailer.
What comes as a surprise is retailers' understanding of Gen Z's shopping preferences. According to the survey, an underwhelming number of retailers invest in marketing tactics that are sought out by this generation: only 15 per cent invest in sampling and 23 per cent offer unique in-store experiences, further demonstrating a discrepancy between what Gen Z expects from their shopping experiences and what retailers are doing.
Gen Z expects more when it comes to social
While there is still work to do, some Canadian retailers (33 per cent) are making strides in delivering on Gen Z's expectations by prioritizing social media as a sales tool. It's no secret that Gen Z is active on social media, with almost 100 per cent of Gen Zers saying they have a presence on at least one social media platform. That said, 75 per cent of retailers are either only now considering an investment in strategic social media marketing that directly targets Gen Z (25 per cent) or are not targeting Gen Z at all (50 per cent). This represents a significant area of opportunity for retailers.
Investments in digital payments are growing
One area where retailers are right on track with addressing Gen Z's expectations is digital payments. When it comes to making purchases in-store, 35 per cent of Gen Zers expect the option to pay using mobile wallet/in-app or contactless (i.e. tap) payments solutions. Retailers' current capabilities are right in line, with 32 per cent currently accepting mobile or digital wallet payments. That number is likely to grow given 57 per cent say they are investing in digital (wallet/in-app) payment solutions.
With Gen Z's growing spending power and influence, it's vital for retailers to understand the gaps in their capabilities and ensure they are getting ahead of this unique generation's needs. By prioritizing the right shopping channels, implementing the right payment technologies and approaching marketing strategically, retailers can learn how to influence this important generation and remain relevant for years to come.
About American Express in Canada
American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. American Express was established in Canada in 1853 and offers a variety of consumer and business products. Learn more at americanexpress.ca and connect with us on Facebook, Twitter, YouTube and Instagram.
About The Nielsen Company
This survey was conducted online within Canada by The Nielsen Company on behalf of American Express Canada from March 29 to April 10, 2019 among 200 retailers with businesses operating in QSR, food/ restaurants, retail and technology (services) sectors and 400 Canadians aged 15 to 22 (referred to as Generation Z). The data were weighted by Business size and Region for Merchant sample and by Region, Age and Gender for the Generation Z sample. This was done to bring them in line with their actual proportions in the Canadian business landscape and Canadian population aged 15 to 22 respectively.
SOURCE American Express Canada