The newest generation is on the block with some major purchasing power and a thirst for luxury, eco-conscious and socially-responsible brands.
It’s Gen Z, of course.
And if you’re thinking, “Isn’t Gen Z a bit too young for luxury and clienteling?,” think again. Gen Z is defined as those born between 1997 and 2010, which means they’re coming of age now—between teenagerdom and their mid-20s. As a result, they are starting to have disposable income of their own, and are looking to luxury brands to satisfy their shopping cravings.
Already Millennials and Gen Z are driving all of the growth in the luxury industry, and by 2030, Millennials, Gen Z and Gen A are expected to make up 80% of the luxury audience.
In this article, we’ll show you how to effectively cater to your Gen Z audience and how to understand the needs of this new generation.
What Gen Z Wants, Needs and Expects From Shopping Experiences
Gen Z, following on the heels of many Millennials, grew up immersed in a digital world, and expects, more than anything else, for their digital and physical experiences to be intertwined at every turn. For many Gen Z consumers, they see no separation or difference between their online and offline lives—and expect brands to act accordingly. But how does this affect their shopping expectations?
Gen Z’s Shopping Behaviors and Preferences
First and foremost, Gen Z not only wants, but expects omnichannel shopping experiences. Their personal life transitions seamlessly between online and offline worlds, so they expect their shopping life to do the same.
Omnichannel shopping and service not only provides seamless experiences, but it ensures that customers have consistent experiences across all touchpoints, both online and offline. Many luxury brands outsource elements of their clienteling or customer service in order to offer superior omnichannel experiences.
But Gen Z’s online-offline cohesion goes further than just expecting omnichannel service. They also place a higher value than other generations on input from other consumers, whether that’s through reviews, personal recommendations, influencer or UGC content, peer influence or other means. They aren’t just looking for a product—they’re looking for a status, an accessory to belonging, an experience. In short: luxury.
This desire for honest, luxurious brands they can trust from reviews and peers’ recommendations has led, in part, to the rise of Direct-to-Consumer (DTC) brands. With DTC brands, products and services that are traditionally sold through third-party providers are offered directly to consumers. With an emphasis by DTC brands on excellence, value and transparency, they’ve captured the trust—and wallets—of younger consumers.
Which just goes to show—when it comes to Gen Z, shopping behaviors and preferences go deeper than just shopping trends or experiences, but dive deep into the social and ethical values of Gen Z.
The Tech-Savvy and Socially Conscious Gen Z
For example, even though Gen Z grew up as “digital natives,” their relationship with technology isn’t always as straightforward as it seems. For example, 75% of Gen Z shoppers prefer to shop online when possible, but 65% of Gen Z shoppers also want to be able to touch or experience products in person before purchasing them.
This is one of the biggest reasons why omnichannel solutions are so crucial for this audience—they want to be able to “try before they buy” while also optimizing for convenience.
But convenience isn’t the only factor for Gen Z. This new generation also wants the brands they shop with to support the values they care about. As a result, Gen Z is much more interested in social responsibility, inclusivity and diversity, and ethical business than previous generations have been. The research shows this clearly:
- 80% of Gen Z consumers will base purchases on a brand’s purpose or mission.
- 60% of Gen Z consumers say they want to know more about a brand’s commitments to diversity and inclusion before purchasing.
- 74% of Gen Z shoppers agreed they would be “likely to boycott brands for crossing an ethical line and going against their personal values”
Much more than just lip service, Gen Z wants to put their money where their mouth is and support brands who care about the same causes they do. That means that brands also have to step up to proactively champion social equity and change.
Building Loyalty and Trust with Gen Z
So, how do you create effective clienteling with Gen Z? It starts with building loyalty and trust—which can be more difficult with this younger generation than of those past. Here are three key ways to build loyalty and trust with Gen Z:
Engage Gen Z with loyalty programs. Some research has shown that about 70% of Gen Z belongs to a paid loyalty program, indicating not just that loyalty programs are appealing to Gen Z, but that they are willing to pay for additional bonuses, perks and rewards for brands they are loyal to. However, for many Gen Z consumers, your standard loyalty program isn’t enough. Rather than purely financial incentives, Gen Z wants to see loyalty rewards for exclusive experiences, increased personalization, social initiatives (like buy-one-give-one) and so on.
Prioritize consistent and transparent communication. Gen Z highly values honesty and transparency from brands they shop with, so brands who can consistently and openly communicate about how their products are made, what their values are, and so on will be able to win over Gen Z consumers more easily. 78% of Gen Z consumers believe that most brands are “all talk and no action,” or that brands “say things they don’t mean.” As a result, brands that earn Gen Z’s trust will be able to speak honestly and openly about their brand mission, values and products.
Partner with authentic brand ambassadors. Trust in traditional “influencers” is already waning among younger generations—a massive 84% of Gen Z consumers say they’ve lost faith in influencers. Instead, they want to hear from brand ambassadors and other real customers—like themselves—to assess whether or not they should buy your product. Brand ambassadors are an effective strategy to get the best of both influencer marketing and real-life reviews for social proof that Gen Z will trust.
Clienteling Strategies for Gen Z
But clienteling goes way beyond just building and improving trust for your consumers. Among our clients, these are the strategies we’ve seen have the most impact with effectively clienteling Gen Z consumers.
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Personalize, personalize, personalize. Personalization—especially for Gen Z—needs to be more than just using the |*FNAME*| function in your email outreach. In order to personalize effectively for Gen Z, you need data and omnichannel solutions to provide personalized offers, communications and recommendations based on known behaviors and preferences. Personalization could look like recommending products specifically for them based on past purchases, providing personalized communication based on where they are in the purchase process, or sending reminders to order refills or replacements based on their order history.
Prioritize experiences over transactions. For Gen Z, part of the luxury experience is related to their experience, even more than the product or transaction. In addition, Gen Z—like the Millennials before them—prefer to spend money on experiences over items. As a result, creating luxury products for Gen Z consumers will also entail creating luxury experiences, whether that’s exclusive access, VIP experiences, 5-star service, or something else.
Leverage social media. Gen Z is the most digitally connected generation ever—so use this to your advantage when creating a clienteling strategy. You need to meet your customers where they’re at, and for Gen Z, this likely means social media. Instagram, TikTok, Youtube and other social media platforms are all effective places to build honest, authentic relationships with your audience and community, and develop a sense of meaning and purpose in connection with your brand.
Be available 24/7. Gen Z is online all the time—so you need to be too. Consumers today expect—especially from luxury brands—that they’ll be able to get service whenever and wherever they need it. Chatbots and messaging apps can help extend your availability and ensure that clients can get support whenever they need it. But don’t discount the importance of direct communication when it comes to forming real relationships with your clients. An outsourced customer service team can help you implement 24/7 service for these digital natives without losing the human touch.
Put mobile first. The average Gen Z consumer spends a whopping six hours a day on their phones, with most saying they frequently use more than one device at a time. That’s a lot of mobile time—which means that if your brand is prioritizing and optimizing for the mobile-first experience, you’re losing Gen Z before you even begin. Make sure your clienteling strategy‚ your app, your website and other customer touchpoints are optimized for Gen Z’s mobile-first, always-on behavior, and you’ll have more effective clienteling.
Challenges in Clienteling for Gen Z
Of course, simply the changes and challenges of a new generation are enough to make any clienteling strategy difficult to incorporate Gen Z into. But this generation also brings unique challenges to luxury clienteling. For example:
Distrust of traditional advertising. If one thing is clear from Gen Z consumers, it’s that they’re tired of being advertised to. A whopping 99% of Gen Z consumers say they always skip ads if it’s an option, and 63% use ad blockers to hide traditional online advertising. Overcoming this obstacle may seem impossible—but it’s actually one of the reasons clienteling is so essential for Gen Z. Without traditional advertising methods to lean on, brands have to build personalized, authentic relationships with their customers in order to cut through the noise and develop loyalty.
Staying relevant. Ever heard of “cancel culture?” If you don’t meet Gen Z’s needs or expectations, this is a generation that’s quick to “cancel” a brand or celebrity and move on to someone else who can step up to the plate. Staying relevant and up-to-par for this generation’s expectations can be a major challenge for many brands who aren’t used to such scrutiny. The easiest way to overcome this is to be honest and direct in all of your communications, and don’t make promises you can’t keep. Similarly, don’t try to make your brand or products sound better than they are—many Gen Z consumers can read through “eco-friendly” claims and become increasingly distrustful of things that sound too good to be true.
How Global Response Help You Craft a Gen Z-Centric Clienteling Strategy
There’s no easy way to adjust your clienteling strategy to encompass Gen Z consumers’ needs, behaviors and preferences—but if you haven’t already done so, now is definitely the time.
As Gen Z comes to occupy a larger and larger share of the luxury and general markets, being able to manage effective clienteling, connect with younger shoppers, and position yourself as an authentic and trustworthy brand is paramount to succeeding in the future.
Need help creating a Gen-Z friendly clienteling strategy? Global Response is here to help. With 40+ years of experience in CX, customer service, luxury clienteling and more, we know how to navigate changing customer expectations and rising demands of new generations. Connect with an expert from our team today and we’ll show you how we can help you develop the luxury clienteling strategy you need to capture the next generation.
