Generation Z: Taking the Food Scene by Storm

SmartLabel millennial

During the past 15 years, companies have spent billions of dollars and countless hours to better understand Millennials. Their goal: to develop products and marketing strategies to attract and inspire Millennial loyalty.

Well, the time has come for Millennials to step aside; there’s a new kid in town. The latest demographic that companies are clamoring to attract is Generation Z. Gen Zs are born in mid-1990s through the early 2000s. They are the new target consumer. According to Forbes (2015), Generation Z makes up 25 percent of the U.S. population. This makes them a larger cohort than the Baby Boomers or Millennials.

GettyImages productlabelYoung consumers have captured the focus of retailers and consumer product goods (CPG) companies. They are also driving change in an industry that’s not renowned for its agility. Generation Z is nearly 70 million strong, and with those high numbers they bring huge potential spending power. 

Generation Z differs drastically from its predecessors. These young people were raised with global warming, an ailing economy, and U.S. terrorism as the everyday norm. They’ve also been inundated with health and wellness information, much more so than the generations that came before them. These realities shape their wants and expectations.

According to Inc. Magazine, like the Baby Boomers preceding them, Gen Zs inherently distrust corporations. Gen Zs are wary of big government and big brands. They are practical savers, cautious of how they spend money. Raised with Wi-Fi ready devices in their hands, they are also extremely plugged in. They witness and consume a 24/7 news feed of economic uncertainty, and therefore they seek more stability than previous generations.

This mix of attributes contributes to challenges for CPG companies and retail brands competing for their brand loyalty.

Generation Z is Diverse and Curious
Generation Z includes robust racial and ethnic diversity. Though caution is a generational hallmark, they do love new experiences. This includes experimenting with new and unique foods and travel. According to Food Business News, Gen Z seeks out an array of global cuisines and innovative preparations, both in restaurants and in the groceries they purchase to prepare at home. To capitalize on these trends, CPG companies and retailers must be innovative with their products, store design, and food preparation.

Generation Z is Skeptical. They are Buyers Who Want to be Heard 
They were raised during the recession that began in 2008. It’s no wonder Gen Z is a financially savvy group. Saving money ranks among their top three priorities, along with graduating from college and securing a stable career. This wariness translates to how they shop, where they shop, and what they buy.

Most of Gen Z doesn’t bother with entering a store just to browse. In fact, according to Business Insider, they rarely go to a mall. Instead, they do their homework online, check online reviews, and consult with friends. The information they glean directs many of their purchases.

iStock consumerPennywise, they do value a good bargain. However, they are also willing to pay extra for products they believe are of higher quality and completely transparent. This means they will seek out superior ingredients, sustainable and manufacturing processing that aligns with their ideals, or a company that shows a commitment to a social cause they believe in. An overwhelming majority of Gen Z is also eco-conscious and concerned about environmental impact.

This generation is heavily influenced by friends, and in turn, will influence their own family’s purchasing decisions. Even the youngest members of Gen Z help direct family vacations, clothing purchases, and grocery purchases. In fact, 94% of Gen Z parents admit that their children have guided household spending decisions.

Perhaps because Gen Z is responsible and savvy, or maybe because of the social, political, and economic climate of their childhoods, “helicopter parenting” is giving way to a more hands-off style that promotes independence, exploration, and preparedness. Young people who have high expectations, greater responsibility, and who drive decisions require CPGs and retail brands to recognize these traits and respond appropriately. Understanding the power of this generation’s influence both today and in the future is essential in successfully appealing to this group of consumers.

Generation Z is Resolute in their Demand for Transparency
Inundated with health and wellness messages from an early age, Generation Z is even more concerned than Millennials about eating well and being active.

Gen Zs are educated about how food is prepared and processed, and by whom and where it was sourced. This is just as important as how good it tastes. They are willing to pay more for food that is sustainably and locally sourced, and non GMO. Needless to say, they are also demanding transparency in labeling to help them make informed and healthy decisions.

A Label Insight study revealed that 83 percent of Millennial moms ages 18-24 said transparency would make them trust a brand more, compared to with 78 percent of all respondents. Furthermore, 86 percent of the 18- to 24-year-old Millennial moms reported they would pay more for product transparency compared to 73 percent among all respondents. We are witnessing that the younger the generation is the more important transparency becomes.

Generation Z is the first generation of true digital natives. From birth, their every question could be answered immediately at the touch of a button. They are constantly with a smartphone. To attract these consumers, retail and CPG brands must respond to their expectations of easy-to-understand, immediate, transparent and comprehensive information.

How to Capture Generation Z Buyers
Generation Z wants to be heard and expects to be part of a solution. The job of CPG companies and retailers is to listen and be amenable to change.

So, how can CPG companies and retail brands capture the attention of these curious, leery, practical, assertive digital natives?

  1. Develop an omni-channel strategy.
    1. You need to reach this generation where they socialize.
    2. Engage on social channels, but be mindful of distinct etiquette for each channel. (e.g. Do not simply copy the same message to every social channel and expect engagement.)
  2. When marketing to Generation Z, keep it real.
    1. Do this even at the expense of revealing imperfection.
    2. These consumers prefer the truth over everything, even when it’s not perfect.
  3. Keep your messaging and visuals inclusive of all races, and non-stereotypical.
  4. Invest in product transparency vehicles.
    1. Tell your product story online where Gen Z prefers to find information, as well as on the package.
    2. Empower consumers to search and find complete and accurate information.
    3. When you are transparent, you maintain control of your brand story while building consumer trust and loyalty.

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Rich Coleman has 20 years experience assisting retail and CPG brands to maximize customer marketing capabilities to meet the consumer's demand for relevancy through enriched data.

About Label Insight: Label Insight is a data refinery for product data that powers transparency between CPG brands, retailers and consumers. The company works to capture, analyze and enrich data contained on the packaging and labeling of food, pet, and personal care products. Label Insight's platform enables transparent, open access to accurate product information. Label Insight's platform contains more than 350,000 products, representing 80% of the top purchased CPG products in the USA today. Label Insight customers use this data to provide greater transparency to consumers; easily participate in industry and government initiatives, such as SmartLabel; create more connected omni-channel experiences; and maximize category growth potential. To learn more, visit www.labelinsight.com.

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