Gen Z expects unobtrusive, entertaining advertising with a purpose

What this means: As retailers prepare and plan for the next generation of in-store experiences, taking generational nuances into account is critical. Younger shoppers inherently view the retail experience through a different lens, as they are digitally native. Creating effective in-store marketing, merchandising and signage takes out-of-the-box thinking to entice shoppers that tend to go online first. Gen Z households spend an average of 12% more on consumer packaged goods than all other households, according to NCSolutions (NCS) purchase data. In light of the generation’s shopping poweress, the majority of Gen Zers (58%) don’t like advertising that interrupts the content they’re enjoying, compared to 38% of baby boomers, according to a NCS survey. Likewise, more than half of Gen Zers (52%) say they’ll engage with creative and entertaining ads compared to 42% of baby boomers. As one of the first generation of digital natives, many Gen Zers were born in an era of cord-cutting — and many are probably cord-nevers, Alan Miles, NCS’s CEO, told Retail Leader Pro. In turn, they are less accustomed to sitting through minutes of advertising that interrupts their content. “Gen Z is significantly different from other generations, and it’s important for brands and retailers to understand their lifestyles and motivations in order to be able to improve their appeal and grow with them through their life stages,” Miles said. A couple of Gen Z themes NCS reported include: 43% prefer humorous ads, and they also tend to pay attention to ads with social/purpose-based messages. 27% are loyal to brands when the brand’s mission aligns with their own beliefs. 72% are most receptive to experiencing ads in their social media feeds. Gen Z shops differently and values convenience in several different ways too. According to NCS, 55% of Gen Z keep frozen meals on hand compared to 49% of older generations. More than half (51%) are frequent snackers compared with 42% of baby boomers. One-fifth of Gen Z are meal planners, while more than one-third of baby boomers plan weekly meals. Additionally, 22% of Gen Z shop for food items at convenience stores, and 18% look for food products in drug stores. Only 8% of Gen X shop for food at a convenience store, and 6% seek food products at a drugstore. Values and sustainable Gen Zers prefer brands whose missions align with their values and are more willing to support and be loyal to purpose-driven brands. According to NCS, 30% of Gen Zers value brands that prioritize the environment, compared with 15% of baby boomers. More than a quarter (27%) of Gen Z will stay with brands that use sustainable packaging compared with 18% of baby boomers. As a result, Gen Z is less concerned than other generations about being loyal to brands that provide the best quality or value for their budgets. For instance, 59% of Gen Zers find the quality of a brand important, compared to 75% of baby boomers. Although 79% of baby boomers believe value is important, and 68% of Gen Zers say it’s important to them. However, many Gen Zers (36%) are loyal to brands they grew up with in their younger years, according to NCS. “Understanding Gen Zer's preferences provides valuable data allowing advertisers to focus on those brand attributes that matter most to this audience,” Miles said. “It might point some advertisers, for example, to create campaigns that are both funny and, if authentic to their purpose-driven brand.” Social connection More than other generations, Gen Z is most engaged when advertising is humorous or entertaining and dislike ads interrupting their content. More than half (52%) prefer creative and entertaining advertising, while only 42% of baby boomers, 44% of millennials and 40% of Generation X agree. Ads with a social message also resonate well with Gen Z; 17% like ads when they are aligned with the social messaging of the ad compared with 6% of baby boomers. In turn, Gen Z is most receptive to advertising that appears in social media feeds, much more so than ads that appear on either cable TV or broadcast television. Nearly three in four Gen Zers (72%) say they’re open to seeing ads in their newsfeeds, compared to 28% who say they’re receptive to ads on cable TV and 20% who say they’re open to broadcast TV advertising. By contrast, just 19% of baby boomers are more receptive to ads on social media, compared to 58% who say they’re receptive to broadcast TV advertising and 45% to cable TV ads. Gen Z also is 81% more likely to buy products endorsed by social media influencers, according to NCS. “I can’t underscore enough the key difference between Gen Z and prior generations – this group was raised on the internet,” Miles said. “They are accustomed to having a wealth of information at their fingertips, and they want ads to be more like content but don’t want to be sold to. Just look at how influencer content takes on the look and feel of a social media feed rather than an ad. This might be a driver for the trust Zers places in social influencers.” Gen Z also is more familiar with individual social media and streaming platforms than prior generations. Fifty-nine percent of Gen Z is familiar with Twitch compared to 14% of boomers; 58% have experience with Discord versus 39% of millennials; and 71% know the ins and outs of Snapchat compared to just 49% of Gen Xers. Looking at Gen Z’s overall media consumption habits and preferences, it’s quite clear where Gen Zers spend their time and where they are most receptive to advertising: social media — 72%. streaming TV — 47% cable TV — 28%. broadcast TV — 20%. “Retailers seeking to appeal to this youngest generation will need to adjust their marketing and in-store and online experiences to build a long-term relationship with this large market segment,” Miles said. Some tips Miles shared from NCS’s research: Retailers whose mission and actions include a commitment to the environment, sustainability and other social causes can underscore that connection, where possible, in their advertising along with physical and online shopping environments. Treat your ads as content. Ensure ads are entertaining the Gen Z audience and not just selling to them. Review tone and content – commercials or ads that are creative and funny are more likely to capture Gen Z’s attention. Reconsider your ad medium mix, putting a heavier focus on the social media and streaming media platforms frequented by these consumers. Gen Zers love convenience. What size packages are retailers offering? Single-serve or smaller sizes fit more in the Gen Z lifestyle and provide the opportunity for younger consumers to try your products. For superstores and convenience stores, you have a leg-up in terms of courting Gen Zers. Ensure you are innovating to create an inviting, unique in-store and online experience that will resonate with these younger shoppers. Being found online is important, too; Gen Z is more likely to research products online and buy online than other generations. What’s next: Gen Zers gravitate toward essential retailers more than previous generations, but the expectation is that these channels can easily fit their needs. Prepared and packaged foods are clear drivers of shopping behavior by younger shoppers at essential retailers. The industry should continue to grow these offerings and also equip stores to more easily fulfill those purchases.

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