💤 Don’t Zzz on Generation Z this Holiday Season

📆 Friday, 17th November 2023 💤 

Hi, and welcome back to Growth Espresso - your one-stop destination for ✨ everything✨ in the DTC industry.

This week we talk about how Gen Z wants to be marketed to, during Black Friday and Cyber Monday. We’re answering that and more—based on 2023 BFCM Consumer Trends Report data.

Before that, here is a hot serving of the key highlights for this week:

1. A Marketplace Founder’s Guide to Fundraising in 2023 + The VCs Investing

2. Stop Comparing Your E-Commerce Metrics To What They Were In 2020

3. How Alibaba's Generative AI Testing Seeks To Empower Smaller E-commerce Sellers

4. Shopify’s Marketplace Expands to the Web

5. What’s the Average Core Web Vital Score for E-Commerce Stores?

6. Platform Economy 2023: U.S. Leads; Europe Lags 

Let’s dive in right away:

Gen Z has been on every brand’s radar not only because they are tech-savvy and mobile-first, but because they display a notable convergence in generational mindset specifically when it comes to consumerism and their expectations of brands.

HOW MUCH ARE GEN Z-ERS PLANNING TO SPEND? 

Considering the age range of Gen Z and that they are probably just starting their careers, it might be empirical to assume that their spending will be less than that of other generations. Though 18% of Gen Z only spends $100-249 on holiday gifts each year, 51% of them spend between $250-999 which puts them at par with other generations. 

📈 What might hit retailers and brands as a surprise is that more Gen Zs than any other generation (31%, compared to only 6% of boomers, 9% of Gen X, and 21% of millennials) plan to increase their holiday shopping spending this year. 59% plan to spend the same, and only 10% plan to spend less.

📈 Of the 31% of Gen Z that are planning to increase their holiday spend, 31% plan to spend $200-249 more and 17% to spend $1K+ more. On the other hand, of the 10% Gen Zs who plan on reducing their holiday spending, 43% will spend only  $50-199 less. The proportional change is lower than the most common choice of the other generations.

Gen Z BFCM Shopping Statistics Speak Opportunity for Retailers

Klaviyo’s Survey on Holiday Spending clearly portrays that Gen Zers possess two of the three main elements needed to convert this generational segment this holiday season; spending power and purchase intent. You are now probably wondering what the third one is and we won’t hold the answer any longer; brand and product appeal. A  brand must heavily invest in understanding its different target segments in order to cater to their needs, shopping motives, and expectations. 

HOW IS GEN Z DIFFERENT FROM OTHER GENERATIONS? 

• Gen Zers are hungry for authenticity: They look at brands beyond labels and product arrays - The mission, the purpose, the story, the experience, the communication and the ethical responsibility are all factored in their purchase decision. 

• Gen Zers value uniqueness to exclusivity: They don’t want to be labeled in a certain way or belong to a certain group for purchasing a certain brand, they want to stand out with items that reflect their personality and express their values.

• Gen Zers care about experiences: For them, shopping is not just a transaction; it’s an experience that enriches their everyday lives.

• Gen Zers are in constant search of information: Growing up in the age internet and social media networks gave rise to a hypercognitive generation very comfortable with gathering and cross-referencing several sources of information and integrating online and offline experiences before committing to a purchase. 

💡 HOW CAN BRANDS STAND OUT?

• Communicate your brand values effectively and frequently. Gen Zers are more inclined to shop from a brand that aligns with and reflects their own values. To ensure long-term resonance with Gen Z, a brand’s BFCM marketing campaigns should revolve around the values they care most about whether it's diversity, sustainability, self-expression, inclusivity, and/or activism. 
  

• Build trust by being authentic. Gen Zers tend to gravitate toward brands that have proven to be trustworthy. Brands are advised to maintain a direct communication line, build community, and generate engagement through the channels that resonate best with this demographic, specifically social media, email, and SMS. 
  

• Use a mobile-first approach: Gen Zers crave user journeys that are cohesive and consistent across every touch point. Since this generation primarily uses their mobile devices to shop, make payments, and stay connected, it is only sensical that merchants meet them where they are with the on-brand experience they expect.
  

• Be loud and proud in your communication: In today’s crowded online space, Gen Z appreciates a brand that stands out from the crowd with bright color palettes, a bold tone of voice, and powerful visuals. Any of the brand’s online touch points including its eCommerce storefront, social media accounts, and retention marketing campaigns should display the brand personality at heart. 
  

• Choose entertaining over selling. With the rise of shoppable social media, gamification of messaging, and video reel, brands are equipped with numerous channels to entertain the easily distracted generation.