Gen Zs and how they are influencing brand equity

Born after the mid-1990s, Generation Z is estimated to include more than 2.43 billion young people globally¹.

Now entering adulthood, Gen Z is fast becoming the largest consumer group and as such, wields a growing amount of influence on the commercial landscape.

Many brands have been slow to tap into the buying power of Gen Z, with their attention primarily focused on Millennials, Gen X and Baby Boomers. When companies have tried to engage, the results have been mixed at best. In a recent Business Value (IBM) report, almost half of Gen Z respondents indicated that they were not satisfied/ neutral about the interaction they did have. Those brands that fail to connect effectively with Gen Zers are missing out on their share of wallet, which will grow exponentially over the coming years.

This article looks at some of the ways companies can successfully engage with Gen Z to build their loyalty and convert them into core, long-term customers. With technology at their fingertips, the Gen Z cohort is the first to exist entirely in the digital age. Smart companies are harnessing social media to build brand awareness and loyalty, reduce customer acquisition costs and increase lifetime value.

Gen Zers expect brands to be ready to interact with them 24/7 on their choices of channels and devices. Social media is the main access point for marketing to Gen Z consumers, and the most successful companies are therefore those able to tap into existing social conversations and start new ones by humanising their brand – giving it a relatable personality and an authentic tone of voice.

The rise of e-commerce has been the catalyst for fragmentation of wallet and Gen Z consumers increasingly want to buy from brands which align to their values. Gen Z are vocal about their beliefs and are more likely to choose brands that are socially accountable, share the same values and have a similar world view. Brands that have connected most effectively and built loyalty with Gen Z consumers are prepared to express their views on political and social issues but allow their customers to feel in control and show respect for their opinions too.

As platforms like YouTube and TikTok have transitioned to discovery channels by hosting interactive content, pioneering brands in the space such as Ryanair have skilfully harnessed these and other platforms by forgoing social media advertising in favour of the mantra, “Make TikTok’s not adverts”, enabling them to build relationships and take part in trends.

Another good example of a company that has grown rapidly on the back of its ability to engage Gen Z amongst broader audiences of scale is our portfolio company, Jungle Creations, a social media publisher that creates content across different brands and platforms. They have built growing communities across new and established brands in female lifestyle, food and drink, arts, and crafts and also run campaigns for established brands market such as Heinz, Diageo and Monopoly.

Brands that target Gen Z are only too aware that loyalty can be fickle, especially when they misjudge the tone of their material.

Conversely, the rewards for brands that win and retain the trust and loyalty of Gen Z consumers can be transformative. Our portfolio company, digital marketing firm Brainlabs, recognises the importance of this and recently acquired Fanbytes, a team of digital and social media marketing experts that help brands engage with Gen Z audiences. “Key to our growth has been staying one step ahead in how brands speak to Gen Z consumers, such as using Snap and TikTok and inventing new ways of engaging through them”, said Fanbytes’ CEO, Timo Armoo. “Brainlabs’ global network can supercharge what we do, bringing our technology, expertise, and talent to an even bigger audience,” he added.

Consumer product companies that have yet to tap into this market should take note.

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¹https://www.bloomberg.com/news/articles/2018-08-20/gen-z-to-outnumber-millennials-within-a-year-demographic-trends