Understanding Gen Y & Z: How to Appeal to the Next Generation of Customers

Advertising doesn’t work like it used to. As media consumption has changed, traditional ad mediums have become nearly obsolete, especially among Gen Y and Gen Z. These generations watch less linear TV, and even when they do, they switch to their smartphones during ad breaks. That means brands can only reach a max of 25% awareness with TV for the target group 18-29 year olds.

But reaching these generations is key – they already account for over 40% of spending in Europe, and that number is expected to increase to 53% by 2035. So how can your brand target them effectively? You need to put your advertising where your audience spends their time, and make sure that you live up to their values and expectations.

Understanding Gen Y & Z: What Sets Them Apart?

Let’s start with a quick definition. Gen Y, also known as the Millennials, were born between the early 1980s and mid-1990s, while Gen Z was born between the mid-1990s and 2012. That means that Gen Yers range in age from their late 20s to their very early 40s, while Gen Z ranges from 10 years old to their mid-20s.

Compared to past generations, Gen Y and Gen Z are very well-educated and have a more liberal worldview. They see climate change as a critical threat and are interested in sustainability, activism, and fighting social inequality. Gen Z is political and can often be found at protests or building awareness on social media.

In America, Gen Z is the most racially and ethnically diverse generation so far, with only 52% identifying as “non-Hispanic white”. They were also twice as likely to identify as part of the LGBTQIA+ community than Gen Y. As a result, Gen Z supports diversity of all kinds, and brands need to do the same if they want to attract them as customers.

Likewise, members of Gen Z list “trustworthy and transparent” as one of the top three factors that leads them to engage with a brand on social media. Staged, airbrushed advertising is out, and authentic connection is in.

How Can Brands Market to Gen Y & Z?

As we mentioned before, traditional advertising channels don’t work well with the younger generations. So how can you market to Gen Y & Z? The best way is via social media.

According to Forbes: “The majority (97%) of Gen Z consumers say they now use social media as their top source of shopping inspiration.” As an example, the viral hashtag TikTokMadeMeBuyIt racked up over 8 billion views in early 2021, and the number continues to climb.

So here are a few things to focus on in your social media marketing.

1. Collaborate With Thought Leaders

Find creators and influencers who support the values that are important to these generations. This boosts your credibility and trustworthiness right from the start.

• Choose influencers who fit your brand image.
• Go where your customers are. TikTok, Twitch, YouTube, Instagram, and even Snapchat are hugely popular with Gen Zers.
• Be authentic and give creators the freedom to create content that fits their audience. Your content shouldn’t feel like advertising.
• Track performance. How well was the campaign executed? How was the quality? Did the campaign achieve the KPI goals?
• When you find creators who get results, develop long-term relationships with them.

2. Generate Interest in Your Products With Exclusive Collections

Collaborate with influencers on exclusive collections. This will attract their audience to your brand.

• Choose your collaboration partners carefully – they need to fit your brand and know their craft.
• Create authentic collections that truly represent the creator/celebrity.
• Have them promote the collection to their followers in exchange for a share of revenue.
• Try out new formats like live shopping where influencers give exclusive insights into their collections.

3. Boost Reach With Exciting Brand Experiences

Consider investing in real-world events that are designed to achieve huge reach on social media.

• This technique is costly, but very effective – especially compared to TV advertising.
• The number of media touchpoints makes the investment worthwhile.
• Make sure your shop system can handle sudden spikes in site traffic during or after events.

4. Use Bold Promotions to Push Customers to Buy

Create a promotion that is so unique, so exciting, that everyone will be talking about it.

• Aim to go viral – a garden-variety promotion won’t do.
• Boost sales with a sense of urgency – make it a limited offer.

How to Keep Your Brand Growing Sustainably in the Long Term

So far, we’ve talked about marketing to Gen Z and Gen Y. But that isn’t enough for sustainable, long-term growth. Once you gained a new customer, you need to prevent churn and maximize sales. To do that, interact with your customers at multiple touchpoints. You should also consider personalized offers and loyalty programs to increase share of wallet. But to implement these techniques, you’ll need the right tech stack.

Keeping Gen Y & Z as Customers: How to Choose the Right Technology

When you’re setting up your tech stack, remember that your brand experience doesn’t stop in stores. You need software that offers a seamless experience across touchpoints, and that lets you add and remove functionalities and scale with ease. Take live shopping for example: Unless your shop infrastructure enables growth for all connected tools, you’re most likely up for performance issues, are limited in setting up your buying experience, or might miss out on aligning your live shopping with the rest of your marketing activities.

Headless architecture allows you to create a seamless brand experience across all channels. This will give your customers a great experience no matter the touchpoint and help you manage multiple front ends easily. Inspire your customers while optimizing conversion rates, e.g., with singular front ends for different touchpoints.

A headless system also allows you to build and launch campaigns instantly and for whatever touchpoint you choose. This is especially helpful for short-term discounts. On top of that, you can modify your front ends to include personalized promotions or interactive experiences with only a few clicks. Aim to excite your customers and get them enthusiastic about your brand.

How to Keep Evolving Your Customer Experience

Be it Gen Y, Gen Z, or any other audience: The right digital marketing strategy is key to gaining and keeping the attention of a new target group. Which channel will increase your profit? Which will generate more revenue? Make sure to research where to reach your target customers and strategically raise your profitability and revenue by prioritizing your best-performing channels. Once your strategy is in place, ensure that your online shopping experience is just as well-designed and set up as your promotions.

For creating a memorable, friction-free shopping experience, you need to pay special attention to several aspects.

• Create one-of-a-kind touchpoints: Design unique front ends that fit your customers’ needs. A headless architecture enables greater flexibility in designing and delivering personalized user experiences.
• Evolve with your customers: Today’s novelties might be tomorrow’s standard. A flexible commerce technology lets you select and integrate best-of-breed services and tools to cater to ever-changing customer needs.
• Gain loyal fans: Make your shopping experience worth coming back to. Take advantage of scalable, on-demand cloud-based resources to ensure great performance at all times.

You never know what the future will bring. To keep up with ever-evolving consumer behavior, your brand needs to invest in future-proof, flexible technology. A system with a central admin panel will give you a seamless experience, allowing you to manage multiple touchpoints and online shops using a single central data hub. Also, look for a user-friendly design that lets your staff independently manage shops.

Win the Hearts of Gen Y and Z

Gen Y and Gen Z are key target groups for eCommerce retailers, but they are hard to reach with traditional advertising channels. To gain them as customers, your brand needs to switch to a social-first approach, using influencer marketing, real-world events, and viral promotional offers to generate attention and social media reach.

Also, show that you care about the concerns and live the values of the younger generations: diversity, inclusion, and sustainability. You could, for instance, demonstrate diversity by showcasing models and influencers of different ethnicities, body shapes and sizes, and with unique characteristics. Inclusion could then be demonstrated through special LGBTQIA+ campaigns (e.g., for Christopher Street Day) and similar engagements. And sustainability? Consider obtaining reputable seals and labels, or at least providing convincing, transparent, and easily accessible information on production, transport and returns. And all this needs to be communicated in a way that feels trustworthy, transparent and authentic.

Once you attract the desired Gen Y and Gen Z customers, retain them with seamless, omnichannel commerce and a scalable, future-proof software that will adapt to changing demands. A personalized customer experience, enabled by a modular, headless eCommerce system will give you all of that.