Courting Gen Z
By Pat Pape
Members of Generation Z, youngsters currently as old as 18, make up nearly 26% of the U.S. population and wield great influence over the shopping decisions of their parents to the tune of an additional $600 billion of family spending. With money, yet few financial obligations, these are the consumers every retailer wants. But appealing to this group is a completely new challenge. Unlike winning older shoppers, winning over Generation Z requires far more effort than simply creating a Facebook page and asking for “likes.”
Born in the late 1990s and early 2000s, Gen Z, as the group is most often labeled, makes up a quarter of the U.S. population, according to 2012 U.S. Census data, and is the first true digital generation. “Many do not know what life was like before the Internet,” said Deanna Jordan, senior research analyst at Technomic, the consumer research organization.
These are children who have never known a world without Internet service or homes without a PC.
They have never had to use a phone book or encyclopedia to gain information. And the concept of waiting is ridiculous.
“This group has seen that the world can change really quickly and success is not guaranteed,” said Kate Turkcan, associate head of TRU Youth Monitor at The Futures Company, a global strategic insight and innovation consultancy. “They feel a lot of pressure about finding a career, not being in a ton of debt when they graduate from school, being able to have some savings. They are aware of these pressures. They are practical, astute and responsible. If they splurge on something, they cut back somewhere else.”
Members of Gen Z have been dubbed “digital natives,” a term that refers to youthful “native speakers” of the digital age, those who are at ease with computers, tablets, social media, laptops, smartphones and a continual stream of new apps. Retailers that want to communicate with this group need a strong online and mobile presence.
“Retailers should [make it so that] these consumers [can] see what the store looks like, what they sell and where they are located,” said Dan Schawbel, founder of WorkplaceTrends.com, an advisory membership service for HR professionals. “Gen Z is most likely to do research on a company online before making a purchase. If your brand is hard to find, Gen Z will turn to competitors. To keep them coming back, you need to provide great service and make it easy to shop there.”
When it comes to shopping, the newest generation is looking for experiences and reasons to be at your store. “A lot of other brands, such as Target or Walgreens, have the opportunity to sell to young people where they spend so much of their time, which is online,” said Turkcan. “The c-store has always been a category that is a walk-in. Because this group doesn’t engage with convenience stores online, convenience stores have to work that much harder to actually get them into the store to build that relationship with them.”
How do you make yourself heard? Communications experts say the under-20 crowd is concerned about the environment, prefers visuals over text, likes quick and brief bursts of information and wants it to be a two-way conversation. They like to provide feedback.
Gen Z is far more health-conscious than previous generations. As adept researchers who know how to self-educate and find information online, “they have access to a wealth of nutrition information,” said Schawbel.
Gen Zers are more likely to choose healthy, quality foods than older Americans are. They grew up aware of the results of unhealthy eating, thanks to public information campaigns designed to curtail childhood obesity, and they have heard the dire predictions for the future. Almost half of all adults in the United States will be obese by 2032 if Americans continue their current eating habits, according to the Robert Wood Johnson Foundation, the largest U.S. philanthropy devoted to public health. Some convenience stores, such as Sheetz of Altoona, Pennsylvania, which already post nutritional information for foodservice items online, are in a position to meet the needs of the Gen Z group.
According to Technomic research, nearly half (48%) of Gen Zers purchase prepared-foods at c-stores at least monthly. When they are deciding where to buy food, they carefully consider prices, overall value and convenience. “Of all the generations, fast service is most important to this group,” Jordan said. “These are the areas in which c-stores excel.”
For Generation Z, today’s smartphones are used for more than talking and texting; they’re also prime tools for shopping. “Gen Z prefers to purchase items online, especially on their mobile phones, instead of going to a store,” said Schawbel. “And they are most likely to spend money on food compared to any other goods.”
Because they are accustomed to receiving most everything on demand, “Gen Zers are interested in online and call-ahead ordering for to-go foodservice orders, signaling that c-stores could also use tech capabilities to pique the interest of this tech-savvy generation,” Jordan said. “Along those same lines, Gen Zers and Millennials also make shopping decisions based on loyalty and rewards programs, which can be fully integrated into tech systems.”
At Flash Foods in Waycross, Georgia, overall store marketing efforts have a broad reach, but spokesperson Phil Settle said the convenience chain has launched several programs geared for the under-18 crowd. “We did a name the Flash Freeze mascot [contest], and ‘Ollie’ was the result,” he said. “That also included a kids’ coloring contest that was well-received by kids and their parents. There are certain offerings in key categories that appeal to the younger portion of that group, including kids’ drinks, certain candy and ice cream SKUs.”
Rutter’s of York, Pennsylvania, has introduced healthier food choices that attract Gen Z and is investigating opportunities to have direct communications with customers via their smartphones whenever they enter a store.
But serious pursuit of the Gen Z customer is not yet widespread in the convenience industry. As one spokesperson for a major chain noted, “We haven’t done anything with that demographic, and we probably should start thinking along those lines since they have the largest amount of purely disposable income than any other group.”
“They are currently forming their attitudes and preferences,” Jordan said of the latest youth generation. “Targeting Gen Zers now can help gain their loyalty in the future as they enter the workforce and have more spending power.”
Pat Pape worked in the convenience store industry for more than 20 years before becoming a full-time writer and communications consultant. See more of her articles at patpape.wordpress.com.