Winning Over Millennial and Gen-Z Shoppers in a Competitive Market
Connecting with future generations is always challenging and a painful way to show your age. We’ve all tried to decipher Millennial or Gen-Z jargon at family gatherings, fast-food joints, and shopping malls. Most of the time you’ll just end up starting a sentence with “back in my day” or embarrassing yourself trying to use youthful slang.
What does this have to do with ecommerce? The future generations of shoppers, fueled by the post-pandemic economy have rapidly evolved. Shopping habits have changed, attention spans are getting shorter, and attitudes are shifting. Although our tried-and-true marketing principles are the same, the new generation of spenders are shopping in an entirely different way. So what does this mean for retailers? What has really changed and what can retailers do to capture this evolving shopper?
Meet the Evolving Shopper
First, let’s understand the shopper profile of Millennials, Gen-Z, and Gen Alpha. There is some crossover between Millennials and Gen-Z. The same is happening with Gen-Z and Gen Alpha, but Alpha is actively evolving right in front of us.
Millennial profile
- Uses social media like Instagram, Facebook
- Influencer marketing is effective for specific niches
- Like to use Buy-now-pay-later apps, for ease of accessing credit
Gen-Z profile
- Uses traditional social media, but primarily TikTok, Instagram, Snapchat, and YouTube
- Short form video content is substantial (TikTok, Instagram reels)
- Micro influencers have better impact than big celebrities
- Favor user generated content and authenticity
- Biggest user group of Buy-now-pay-later apps, easiest way to stretch spending power and access credit
Gen-Alpha profile
- Not so much on traditional social media, uses mostly TikTok, YouTube shorts
- Influencer marketing will continue to dominate and expand
- Much more likely to buy on an influencers recommendations
The takeaway: The latest generations of shoppers are primarily social and app-first based users. Although they utilize some level of traditional media, they are not always running wild in the open web. They often get their news and consume media via social platforms, mobile apps, and short form video.
This paints an interesting picture of the new generation of shoppers. It means attention spans are shorter. It also means they want compelling, organic and authentic content. They’re feeling less empowered financially than previous generations. All this makes sense as we find they’re being inspired by Influencers and using Buy-Now-Pay-Later (BNPL) apps.
Another thing to note, it’s apparent that Gen Alpha, much like Gen-Z, is taking cues from its previous generation. So far it looks like Alpha’s characteristics are similar to Z’s but with some being more amplified. As such, gaining incremental share in the right places will be more important as these channels continue to expand. The actions retailers are taking now will prepare them for success into the next generation. It’s always better to be ahead of the game.
If retailers are not at the right place, at the right time, with the right content, and offering some flexibility (i.e., through discounts or payment options) their efforts can become ineffective and retailers will face challenges in growth with this potent demographic.
What Retailers Need to Understand
To capture Millennials, Gen-Z, and essentially prepare for Gen Alpha and beyond, you have to know where to reach them, how to navigate the channels they use, and your content needs to speak to them. Below are key points on how to successfully capture these shoppers.
Content authenticity resonates with these users
Simply put, you have to do content right. Hoping to strike a chord by riding trends or using the latest buzzwords is not enough. Being authentic is important to this group of shoppers. Otherwise, you’ll look just like another retailer that is sponsoring an influencer just to make another dollar for another click. The content has to speak to the audience and this is where most of the disconnect happens.
Optimize and maintain relationships with influencers and channels
While working directly with influencers may sound like a fun job, marketers are not talent agents. Creators are a unique group of users and need to be treated as so. Smaller influencers might need more support while more experienced influencers might not give you the time of day. The challenge that comes with these channels are negotiating rates, deals, contracts, etc., and on top of that figuring out how to maximize the ROI of each.
Effectively target users based on their unique needs
You’ll need to be in the right places and address the needs and values these young shoppers seek. Each generation of shoppers we’ve identified have unique profiles when it comes to this. For example, Millennials like niche influencers for specific interests; Gen-Z prefers micro-influencers, and are not easily persuaded by celebrity influence. Both use BNPL apps primarily to find new products and shop the best offers. However, Gen-Z users use BNPL apps primarily for the flexible payment options because they have less spending power than their more established Millennial counterparts.
Simple Answers for Complex Questions
Seeking the attention of the new and next generation of shoppers is important as they continue to be the biggest contributors to the ecommerce market for many years to come. It’s clear that these channels will be the cornerstone of ecommerce for Gen Alpha and beyond. It’s a challenging task to take on, but there are ways retailers can capture them by speaking their language, in their natural environment, in an authentic and even flexible way.
Connexity provides a stress-free, turnkey solution for retailers to gain incremental exposure on the open web–Including the Influencer and BNPL channels that these complex demographics occupy. We’ve made some great waves within the Influencer and BNPL space. Our owned-and-operated Influencer marketing platform, ShopYourLikes, has been driving growth for retailers having delivered over $500M in new sales from 5000+ influencers in various segments. They have influenced shoppers to try and buy new products resulting in a 2x new customer rate. It’s not your typical cookie-cutter influencer marketing relationship. That’s because we’re working directly with influencers to drive your growth.
Connexity also powers in-app shopping marketplaces for the biggest BNPL platforms like Afterpay, Affirm, and Klarna, where our proprietary technology creates exclusive and unique experiences you can’t get anywhere else. This one-of-a-kind partnership will help you gain share-of-voice and drive additional incremental growth with our exclusive inventory.
At the end of the day it’s a simple marketing principle: Understand your audience. Knowing what channels they use, how they shop and how to speak to them will put you at a major advantage over your competitors. It sounds like a daunting set of tasks, but by working with a partner who manages competitive exposure in both social influence and buy-now-pay-later, Connexity delivers sales performance from the most coveted young audience demos without the hefty responsibilities that comes with investing in these channels–And without your messaging getting lost in translation.
