Two new reports, one from Ogilvy Consulting and another from Emarketer, shed light on Gen Z preferences and work/life situations, which can help retailers and brands forge stronger connections to this digitally native demographic cohort.
The data shows there’s a lot at stake.
According to Bank of America’s BofA Global Research unit, the spending power of Gen Z is expected to soar. The research report, titled “Gen Z: A New Economic Force,” expects spending levels to rise over the next 10 years, with the consumption patterns of Gen Z having a strong influence on the global economy. “In roughly the next five years, [Gen Z] will have globally amassed $36 trillion in income and that figure is expected to surge to $74 trillion by around 2040.”
The Emarketer research reveals a path to tapping that spending power by meeting Gen Z shopping preferences. The report, titled “Digitizing the in-store experience,” and sponsored by Shopkick, noted that “Gen Z consumers like to shop in person, with digital help.”
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“For Gen Z, the physical store remains the top awareness driver across key categories like clothing, shoes and accessories.…However, their purchase path is increasingly digital-first, even in-store. While shopping in person, Gen Z is more likely to use a store’s mobile app to find new brands or products than traditional signage or product displays, per [Emarketer’s] survey,” the report’s authors said.
Regarding how they’re using in-store digital, price-conscious Gen Zers are seeking out coupons, loyalty rewards and getting the best prices. Sky Canaves, principal analyst at Emarketer, said that as the consumer path to purchase “becomes more complex and fragmented, mobile apps with an integrated loyalty component will play a critical role in keeping retailers connected to their customers.”
Canaves said data captured via these apps “offers direct insights into consumer behavior and preferences, enabling retailers to respond accordingly. But to be worth using, retail apps should provide tangible value for shoppers by combining personalized loyalty offers and benefits with mobile features that enhance the in-store shopping experience.”
The Ogilvy report, meanwhile, takes a higher elevation view of the landscape in which Gen Z navigates and identifies some of the challenges they face and what brands can do to better engage them.
Ogilvy’s researchers said Gen Z, the largest generation in history, is navigating unprecedented shifts in education, employment and societal values. The report, titled “Gen Z’s Economic Crossroads,” noted that this generation is coming of age in a challenging environment marked by rising education costs, an outdated workforce infrastructure and a booming gig economy that is set to encompass half of all workers in developed nations by 2027. The report noted that these changes are fundamentally altering the way young people view their careers, education and economic independence — and in turn, how brands must respond to remain relevant.
According to the report’s authors, traditional pathways, including degree completion followed by 9-to-5 employment, have become less appealing to Gen Z. The decentralized gig economy now allows creators and influencers along with independent entrepreneurs and side-hustlers who average 20 years old worldwide, to develop nontraditional paths to success. The pursuit of autonomy together with meaningful experiences and distrust toward traditional employment and educational systems drives their behavior.
The increasing refusal of traditional structures comes with certain dangers. The report indicates that the gig economy provides flexibility yet creates financial instability and diminishes benefit access and eliminates traditional employment protection for workers. The educational institutions fail to prepare Gen Z students for the new economic environment, which results in their inability to survive the necessary hustle for success.
The current situation creates both an opportunity and a mandatory responsibility for brands and retailers to act. Brands that assist Gen Z members through the economic changes and skill development will earn their loyalty because they function as enablers of personal empowerment, the report’s authors noted.
Ogilvy’s research also shows that consumer expectations have shifted generationally so brands need to adopt transformation through practical solutions for Gen Z’s challenges. Brands and retailers should invest in innovative tools and programs that promote learning and independence to establish cultural relevance at this critical time.
For example, key strategies brands should employ to connect with Gen Z could include redefining learning pathways to support upskilling. The report’s authors said the pandemic fast-tracked the adoption of hybrid learning models that are now essential to workforce development. Gen Z’s demands for education alternatives — such as online certifications, apprenticeships and peer-to-peer knowledge exchanges — are growing, and brands have an opportunity to meet this need by offering:
- Access to e-learning platforms that provide cutting-edge courses in areas such as artificial intelligence, data science and digital marketing.
- Partnerships with institutions or educators to create exclusive business-oriented micro-certifications.
- Networking opportunities or mentorship programs that advance both hard and soft skills for a rapidly changing economic landscape.
The report encouraged brands and retailers to adopt a “talent incubator mindset.”
The notion of employment has transformed — Gen Z not only craves independence, but they also want opportunities for personal growth and creativity without sacrificing balance. Brands can meet this demand by:
- Encouraging self-directed learning among employees and customers, rewarding growth mindsets and adaptability.
- Engaging creators and influencers as collaborators or consultants in product development, marketing and loyalty strategies.
Other approaches include offering micro-internships, “creator co-creation” workshops and “repotting days” for employees, which involve allowing employees to explore other areas of the company for half a day, fostering cross-functional learning and engagement with fresh perspectives, the report noted.
The authors said by deploying transformative strategies, retailers and brands are not only positioned as integral players in Gen Z’s learning and growth journeys but also create deeper customer relationships built on shared values and investment in a brighter future. The report said that more than ever, young people are motivated by passion-led goals, and the brands that enable them to thrive, rather than simply survive, will solidify their place in Gen Z’s hearts and wallets.
In summation, the distinctive buying patterns and changing professional priorities of Gen Z offer retailers and brands opportunities to develop enduring relationships. Brands need to adapt by delivering practical, innovative solutions that enable Gen Z to succeed in the rapidly changing economic environment because their purchasing power keeps growing alongside their evolving paths to success. Brands can attract Gen Z customers by integrating digital elements into their store experiences and investing in learning platforms and loyalty tools and creative development opportunities that reflect their values of independence, purpose and adaptability.
Gen Z’s loyalty requires retailers and brands to function as collaborative partners that enable their aspirations rather than simply providing products or services. The brands and retailers that support Gen Z’s development while sharing their purpose-driven objectives will position themselves as cultural and economic leaders and be among a generation that plans to transform industries while spending billions of dollars.
