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What is common among Puma, Starbucks and Lego? Each of these brands are actively engaging with Generation Z (those born after 1995) in very innovative ways. For instance, Puma 'creative factory' invites buyers to get hands-on in the creative process. The creative factory is a shoe-making studio where consumers can design their own sneakers. Starbucks' 'My Starbucks idea' is an invitation to coffee drinkers all over the world for suggestions on how to make Starbucks better - its products, its services, any aspect at all. Of the thousands of suggestions it receives, between 13 and 17 are implemented every year - an example how Gen Z can inform and change large organisations. Lego has in-store interactive areas where children can get the product out of the box and - literally - into play.
But why should marketers care? Because Generation Z is very different from the millennial wave of digital natives. According to a report by Fitch Design India, a retail and brand consultancy, by 2020, today's 14-19 year olds (Gen Z) will be the largest group of consumers worldwide, making up 40 per cent of the US, Europe and the BRIC countries, and 10 per cent in the rest of the world. The needs and behaviours of this group will inform not only the next generation of shoppers, but the future of mainstream retail.
If you consider only store design, this generation is different from how the previous ones browsed a store. According to the report, Gen Z goes by contrast and colour, before exploring product features. They don't look up when shopping; they navigate at eye level.
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Says Sameer Mehta, head, business and operations, TracyLocke India, DDB Mudra group, "Generation Z people are informed buyers. They have the tools to compare products and hunt for the best prices. There is a lot of peer pressure on them in terms of brands. They have the power to hop between retailers - be it physical stores or online - snapping pictures, sharing on WhatsApp and discussing with friends before making any purchase decision. Marketers and retailers have to be part of the ecosystem that this generation has created."
The Fitch report says this generation desires involvement in the entire chain of activities that brings a product to the market - from conception, design and creation, to marketing and retailing. Lucy Unger, managing director, Fitch in South Asia, explains, "Co-creating experiences and engaging consumers can go a long way in wooing not just these new set of consumers but can revolutionise retail as a whole. An example would be how we renewed the focus on customisation at The Arvind Store in Ahmedabad. We created a styling studio where customers could design their own wardrobes in a modern environment. By bringing together the fabric and the 'masterji', Studio Arvind created a platform for the customers' individuality and expression."
No wonder, engaging Gen Z requires a fundamental change in the way retail works. It is impossible to achieve seamless retail if you have separate, siloed departments for store design, online operations, marketing and logistics. The report suggests an essential part of this future will be the introduction of chief experience officers, who will oversee the newly organised, holistic operations.
That apart, the Gen Z wants nothing more than to share data and information, but most organisations currently are unable to receive it. The CXOs will not only gather and use that feedback, but also use it to build advocacy and loyalty. The role and design of stores themselves will also have to change - and that doesn't just mean new fixtures and fittings. Stores will need to offer compelling, brand-led experiences that are more about aspirational browsing and less about a direct push for purchases.
