4 Gen Z trends that your CX can’t ignore
When it comes to customer experience, we’re never in a static state. People and their behaviours are constantly shifting so businesses, and the services they offer, should too. But who are we adapting for?
As a millennial myself, I can hold my hands up and say we’ve talked about this demographic perhaps too much. But fear not, because their successors have overtaken us. The Gen Z cohort, born between the mid-1990s and early-2000s have entered adulthood, meaning a new wave of consumers for businesses to welcome and marketeers to target. How can retailers not only keep up with this change but pro-actively create experiences tailored to them? Here are a few key trends of this consumer-type and what it could mean for customer experience.
1.Expectations exceed themselves
Gen Z have grown up in an era of hyper-convenience and hyper-personalisation, so much so that the prefix of “hyper” is obsolete. The pace of change in technology is faster than ever and solutions that previously delight are only just meeting expectations. This can be illustrated in the user hierarchy of needs as no longer do customers expect a service to be functional they expect it to preditct their need and even think for them. 67% of Gen Zs believe they should be provided with a truly personalised experience, and by truly we mean smart, real-time, contextual, 1:1 experiences.
So what does that mean for customer experience..
- Lead with data. To truly offer these differentiated experiences brands need to find ways to make data actionable into a customer benefit. Orvis, the men’s retailer, collect data through every interaction across channels. They surface the data across the business particularly in-store to be able to offer a personalised shopping experience.
- Innovation at the core. We’re already seeing a shift in the way organisations are run, moving away from silo-ed functions and towards collaborative product innovation to be able to keep up with customers ever-increasing demands. Amazon are key leader in innovation having the “Amazon effect” on every industry going. Their principles and business set-up put innovation at the forefront and are able to adapt to ever-changing customer needs at scale.
- Speed is a priority. The race to be the first is tougher than ever for brands. With increased demand for great experiences comes increased competition. Agility and responsiveness is key to ensure propositions aren’t just an internal strategy but actually make it to Gen Zs’ fingertips.
2. Loyalty redefined
Studies have shown that Gen Z are less loyal to brands than previous generations having a direct impact on retention rates. Our understanding of what a loyal customer is and how to measure loyalty will need to shift. 80% of Gen Zs believe price is the most critical factor and that they are more likely to switch between brands without a second thought therefore businesses should welcome flitting customers with flexible loyalty schemes.
How your CX can respond…
- Research their motivators. If convenience is no longer prioritised above expense, perhaps Gen Z would prefer to be rewarded with free delivery as opposed to fast delivery. 79% of shoppers surveyed stated that free shipping would make them likelier to shop online. Investing in research to truly understand your customers needs and wants is always worthwhile.
- Balance attrition and retention. Whilst the cost of acquiring a new customer is much higher than keeping an existing one, with swaying loyalties there is a need to not exclude either. Aviva’s Existing Customer campaign highlights how focusing on growth of your customer base, leaves your current customer base disgruntled.
- Get creative with schemes and incentives. Previous delighters are now expectations so focus on innovation and data to create a differentiated experience. Sephora’s Beauty Insider program is a personalised points reward system that allows users to choose how to spend their points. It’s tiered, it’s gamified, it has ample UGC and it accounts for 80% of Sephora’s annual sales.
3.Privacy overtakes social
Gen Z entered the world after the revelation of Facebook, being able to voice your opinions to whomever is another accepted norm. Instead, their behaviours see a shift to more private platforms such as Instagram and Snapchat. They favour content that can disappear as quickly as the mind can change. However, unlike millennials, 87% of Z regard keeping their information private more important than popularity measures such as likes and comments.
What this trend means for CX…
- Integrate with social platforms. Gen Z are much more likely to skip and block ads therefore social media needs to be used beyond just a marketing tool and as a functional experience. Japanese platform LINE is a great example of a private social platform that has integrated with eCommerce.
- A personal approach. Gen Z appreciate 1:1 interactions, despite their back-end complexity, the value in personalised private experiences is growing. Today 50% of mobile users expect to see a live chat function highlighting the importance of dedicated, global, 24/7 customer engagement.
- Allow customers to own their privacy. All of us, including Gen Z, are more aware of the intricacies of our privacy rights. Privacy should be an easy-to-use, empowering feature for any brand. While over half of Gen Zs state they trust brands that they grew up with, a suprising 58% stated they don’t trust Facebook (a brand they grew up with) with their personal data.
4.Mobile more crucial than imagined
As generations have evolved, our dependency on our mobile devices has too. Designing mobile first was once a revelation that came with millennials, however, Gen Z are twice as likely to shop via mobile than their predecessors. As laptops and desktops become as laughable as a Motorola flip phone, the rise of 5G means we’re more connected than ever. This demographic have a deeper understanding of technology so there’s a need to re-invent the capabilities of mobile and leverage the latest innovations.
What does that mean for customer experience…
- Leverage the latest technologies. 2020 is already seeing the rise of real-time personalisation, geo-targetting and AI image recognition to name but a few. For example, WholeFoods have started targeting customers when they near a competitors store by offering them discounts through the mobile app which resulted in 4.96% post-click conversion rate.
- Integrated experiences with the smartest APIs. Ikea have tackled this by implementing AR for customers to envision furniture in their space. This alongside other data and AI APIs can boost innovative experiences with minimal business effort.
- Don’t neglect omni-channel. Yes Gen Z are primarily on mobile but no experience exists solely in one channel. Strategically map the transition points between channels and what value they bring to your Gen Z-ers
Evidently, their behaviours, needs, likes and dislikes are more differentiated than that was perhaps expected. Some have referred to Gen Z as Millennials 2.0 but that kind of blanket approach will lead to a vast misunderstanding of your consumer base. Instead, take the time to learn from these new consumers, target them when it comes to research and testing to understand what they value in brands and experiences. Trends are good to identify an overarching strategy or approach but regardless of the generation tag they may have, people are people and they like to be treated like that. Never stop investing in understanding your customers, as above all, empathy is the key to building an effective customer experience.
