The 2024 CommerceNext Growth Show’s Z Suite sessions offered a captivating glimpse into the values, behaviors and expectations of Generation Z. Across two panels, these young consumers provided invaluable insights into how they shop, what they look for in brands and how they spend their money.
WHAT WE LEARNED:
- Authenticity and Transparency are Non-Negotiable
- Selective Loyalty: Quality Over Quantity
- The Double-Edged Sword of TikTok
- Spending Driven by Emotion and Escapism
- Balancing Aspirational Spending with Ethical Choices
Authenticity and Transparency are Non-Negotiable
Gen Z expects brands to be real. Authenticity isn’t just a buzzword; it’s a core value. This generation wants to feel seen and heard by the brands they support. A prime example is Glossier, which won over many Gen Z hearts by re-releasing an old formula in response to customer demand. This move made consumers feel valued and listened to, fostering a deeper connection.
Transparency goes hand in hand with authenticity. Gen Z demands not just high-quality products but also honesty about the brand’s practices. This includes everything from the supply chain to social and environmental commitments. For instance, one panelist highlighted how a brand justified the price of their $65 boxers by breaking down the costs involved, including paying a living wage and sustainable practices. This kind of transparency can turn price-conscious Gen Z consumers into loyal advocates.
Selective Loyalty: Quality Over Quantity
When it comes to brand loyalty, Gen Z is selective. They are loyal to brands that excel in specific categories rather than sticking to one brand for all their needs. For instance, The Ordinary has garnered a dedicated following due to its commitment to quality skincare products. However, this loyalty doesn’t extend across all categories; Gen Z consumers curate their own style and identity by picking and choosing the best from different brands.
The in-store experience also plays a crucial role. One panelist mentioned their loyalty to Gap, not only because of its high-quality basics but also due to the curated in-store experience that aligns with the brand’s identity. This combination of quality products and a strong brand experience keeps Gen Z customers returning.
The Double-Edged Sword of TikTok
TikTok is a powerful platform for influencing Gen Z shopping behaviors, but it’s a double-edged sword. The platform has made previously inaccessible products, like certain Korean skincare brands, easily purchasable. However, there’s a significant level of skepticism associated with TikTok Shop. While some Gen Z consumers are tempted by trendy products, they often hesitate due to concerns about authenticity and transparency.
The panelists discussed how they are aware of the algorithms and are selective about their purchases. The “brain rot” phenomenon—where endless scrolling leads to fast consumption—also contributes to their cautious approach. Despite these concerns, TikTok remains a significant draw due to its relatability and authenticity in user-generated content.
Spending Driven by Emotion and Escapism
Gen Z’s spending behaviors are heavily influenced by their emotional state and the desire for escapism. Faced with a steady stream of negative headlines and a dismal future outlook, many young consumers shop to dull the pain. As Alanis Castro-Pacheco, an intern at Tiffany & Co., pointed out, “We purchase based on escapism—we want to feel something.” This sentiment was echoed by Clay Lute from Calvin Klein, who referred to this as a “doomsday mentality.”
Spending on pick-me-up “treats” can range from small indulgences like iced coffee to larger splurges like concert tickets. These purchases are often seen as a way to inject some joy into their lives, even if they are still developing their spending power and must make careful decisions about what’s worth their money.
Balancing Aspirational Spending with Ethical Choices
Gen Z consumers are known for their aspirational spending, but they also have a strong ethical compass. Opinions on affordable knockoffs, or dupes, illustrate this balance. While some panelists admitted to buying cheaper versions of expensive items, they also expressed a strong demand for transparency and ethical business practices. For example, Fay Shuai highlighted how Oddli’s response to an Amazon dupe of their fair-wage boxer shorts resonated with Gen Z’s values.
Moreover, Gen Z has no patience for brands that make superficial attempts at diversity or sustainability. They value genuine efforts and are naturally suspicious of brand claims without substantial evidence. Brands that commit to maintaining product quality and longevity, such as offering repair services, can build stronger connections with this discerning audience.
The insights from the Z Suite sessions underscore the importance of authenticity, quality and transparency for brands aiming to capture the Gen Z market. This generation values brands that are honest and socially committed, selectively loyal to those that excel in specific areas and influenced yet cautious about platforms like TikTok. Additionally, their spending is driven by emotional needs and a desire for escapism, balanced with a strong ethical perspective. Understanding these dynamics is crucial for retailers and brands looking to build lasting relationships with Gen Z consumers.
If you want to learn more tips and insights from the 2024 CommerceNext Growth Show, check out our CommerceNext Steps article here to dive deeper!
