Navigating the Labyrinth

If you ask any marketer today what keeps them up at night, it’s one of the following three things (or, for the over worriers, all three… poor souls):

1. Artificial intelligence’s meteoric trajectory, begging questions about both the creative process and the way consumers interact with content;

2. The values-based fragmentation of consumers across media channels due to the polarization in society;

3. How to crack the Gen-Z cohort.

Gen-Zs are one of the toughest audiences to understand—but it’s one worth diving deeper into given that their global share of retail spend is projected to increase to 48% by 2030. Their interests and pet-peeves challenge just about every playbook the advertising industry has deemed successful over the past decade. Take this: they love when brands are quick to insert themselves in cultural moments, like Spotify's TikTok post on the "how often do you think about the Roman Empire" craze. But they also despise when brands hop on trends just because, such as when every company was opening a Threads account because that's what everyone's doing.

@spotify

Roman Empire podcasts weren’t in the queue this week but here we are #rome #fallofrome #podcastrecommendations #podcasts #romanempire #CapCut

These aren't necessarily contradicting, rather a plead for balance—something brands have always struggled with. How to know when you're doing too little or too much?

Well, if there's one thing Gen-Zs do respect, it's proactively involving them in the process. Instead of reading white papers about communities, they value when brands actively engage and build long-term meaningful relationships with communities defined by co-creation, collaboration, and co-ownership. This means a few things:

• The existing lead-gen playbook annoys the crap out of this cohort;

• Long-term brand marketing is less so about coming up with clever ads, and more so about involving this cohort in your brand's growth, and;

• Ad spend needs to be deeply reevaluated. While 43% of Gen-Zs are willing to purchase a product based on an influencer’s recommendation, they are also starting to get ad-fatigue from collabs and constant targeting, often scrolling past posts that hint at being an ad.

Now, let's dig deeper into the nuances of this enigmatic generation. Gen-Z is not just digitally native but also the most diverse consumer group yet. They are well-educated, fickle, and often skeptical of marketing efforts. This skepticism isn't unfounded; it's a byproduct of their lived experiences. Many in this cohort are already feeling burned out, grappling with a cost-of-living crisis, and navigating the complexities of a world in flux.

Despite these worries, only 20% plan to shop less in the coming year, whereas 25% actually plan to shop even more. This makes them what marketers would consider “financially confident” but also realistic, understanding that their spending power is likely to fluctuate.

So, how do brands navigate this labyrinth? One key insight is personalization. Brands like Nike and Amazon have leveraged data-driven insights and AI to offer customized experiences. This isn't just about recommending a product based on browsing history; it's about understanding the consumer's lifestyle, needs, and even their aspirations. It's about creating a Nike By You Custom Shoe that isn't just a shoe but an extension of the individual's identity.

Another critical aspect is cultural sensitivity and inclusivity. Take Popeyes, for instance. Their campaign for 50 years or older employment opportunities wasn't just a hiring strategy; it was a statement, a commitment to inclusivity and respect for different perspectives. This resonates with Gen-Z, a generation that is socially conscious and values brands that take a stand on issues that matter.

But it's not just about what you say; it's also about how you say it. Gen-Z is the generation of memes and TikTok, platforms that have revolutionized the way we consume and interact with content. They use memes to communicate their feelings and ideas, and they appreciate brands that can speak their language. But this should not be a gimmick. Authenticity is key. They can spot a fake from a mile away, and nothing turns them off more than a brand trying too hard to be something it's not.

And let's not forget the role of technology. Gen-Z expects more from brands in terms of technological integration. They are the streaming generation, the gaming generation, and potentially the metaverse generation. They are not just consumers but also creators, influencers, and even critics. They want brands to integrate technology not as a novelty but as a utility, enhancing their experience and offering real value. Take, for example, Angry Butterfly’s campaign they did for Jane/Finch Centre in Toronto, where they turned a community-based organization that fights poverty into a Twitch streamer to make use of an Amazon Prime loophole for a good cause.

Therefore, the customer journey of a Gen-Z is wildly different than anything marketers have ever seen before—they highly over-index in finding brands through Vlogs (which includes gaming streams) and celebrity endorsements; meaning that credibility of a brand is typically positively correlated with likes and comments on social media, but also whether or not they’re ethically-driven and scrappy. For those reasons, building brand love, which is a major factor in converting this cohort into customers, can at times come cheap (by going viral) or wildly expensive (by doing celebrity collabs with Hailey Bieber). There’s very little in-between.

So, where does this leave us? On the one hand, we have a generation that is incredibly complex, with diverse needs and preferences that are constantly evolving. On the other hand, we have unprecedented tools and technologies at our disposal to understand and engage this audience.

The challenge, therefore, is not just to use these tools effectively but to use them wisely. It's about striking a balance between data-driven insights and human intuition, between automation and personalization, between speaking and listening. It's about recognizing that Gen-Z is not just another target demographic but a dynamic community of individuals with their own voices, stories, and dreams. And if we can tap into that, if we can build not just campaigns but also relationships, then we have a shot at not just capturing their attention but also their loyalty.

And in today's fragmented, fast-paced world, that is the ultimate win for any brand.

PPA