Gen Z panel shares 5 rules for success

Originally posted on Digital Signage Today.

Will Gen Z destroy bank branches? And why is this generation buying so much vinyl? In the business and technology world, perhaps no generation in history has been more discussed, courted and feared as Gen Z. But what makes this group of consumers tick? And how can brands future-proof their strategies by using proven, data-based information instead of rumor and fear-mongering?

During a general session of the joint Interactive Customer Experience and Bank Customer Experience Summit on Sept. 13, called "On the record with Gen Z," attendees explored results of cutting edge research on trends in Gen Z. The research was unveiled by E.J. Kriz, EVP for training and customer experience at Ath Power Consulting, also known as APC (which helped conduct the study) and Aimee Wright, VP for strategic relationship management at Blackhawk (which sponsored the research topic). In addition to presenting research findings, Kritz brought Gen Z consumers onstage to do a Q and A with the audience.

Actionable insights

"We exist for the time when your brand says: 'Why? Why do our customers feel this way? Why do our employees feel this way? What do we need to do next? And how do we get it done?'" Kritz opened by explaining the mission of business consulting firm APC, which was behind the study.

The study sought to explore three key areas of Gen-Z:

1. Gen-Z's values and beliefs.
2. Gen-Z's impact on traditional industries (restaurants, retail, banking).
3. Understand generational differences from millennials, Gen-X and Gen-Z.

Sometimes people will conflate Gen Z and millennials, Kritz explained, "and that's a natural thing to do. And there are many similarities between Gen Z's and millennials, but there are many differences too. And we really sought to understand those fundamental differences between Gen Z's and millennials so that you all can make data driven decisions for this massive group of consumers, the largest generation that the world has ever seen."

Researchers quickly found that Gen Z has never known life without a number of technologies, including the Internet, the smartphone, and other advanced consumer goods.

"This is also a group that had a very unique experience," Kritz said. "They had two years, more or less depending on where in America you lived, where their adolescence was stolen from them, where a global pandemic caused two years or so of social isolation."

Thus, Gen Z was forced to know life without in-person experiences, including time in-person with friends, school, shopping malls and more.

"We believe that that has caused them to value in an increased manner, interactive experiences."

Mobile apps and social media

Kritz set the context by showing a humorous video highlighting the power experience and the differences between consumer generations during the order process at a coffeeshop.

It's vital to understand that Gen Z is embedded in the Internet and interactive technologies to a degree previously unseen, and to reach them, social media is essential. Kritz said the study found that the big three for Gen Z are Instagram, TikTok and YouTube.

Kritz asked for a show of hands for banks that use TikTok to reach consumers, and found that only a small number (two) said they did.

"Notice what's missing? Facebook." Kritz said. "Remember MySpace? I don't know if Facebook will ever be MySpace but I'm just saying it's not on the list."

Apps are another core area of difference between Gen-Z and Millennials or Gen-X (the other two groups studied).

"We need to create an app that is compelling and adds value to their life," Kritz said. "Retail and restaurants right now are doing a good job, but there's room for improvement because one of the things you'll find in our study… is how likely Gen Z are to delete your app. Gen Z love to delete apps."

What makes Gen-Z happy? (The big five)

Kritz summarized the core findings of the study in five traits Gen-Z demands from businesses.

1. Authenticity

"They will sniff you out if you are a fraud from a mile away. They crave real, authentic experiences with people who are like them… From a staffing standpoint, you've got to staff with people that Gen Z feels that they relate to," Kritz said.

2. PhysiDigital

"Your physical environment has to have digital application. And your digital world should also represent your physical world. I'll go back to staffing. If the staff in your bank, restaurant, retail store doesn't understand your digital environment too, that's a massive miss. The two worlds have to combine, they have to coexist in one very happy place," Kritz said.

For example, this year a major clothing retail brand created a smart fitting room; garments have RFID tags, and the smart mirror recognizes garments as the customer tries them on. Users can even check out right away using the smart mirror.

3. Experiential

Kritz shared an example of an ice cream shop in his home town that was specifically designed to be friendly to Instagram photos, which Gen-Z customers like his kids love to visit so that they can post photos online.

"To simply have a retail environment without an experience built into it will be a missed opportunity, be that an Instagram photo op or (in the case of a restaurant) an experience that they can simply not get somewhere else — and an experience that can be shared with their friends," Kritz said.

Another example, he added, would be the Taylor Swift Eras tour and how, when venue seats were filled, fans were still happy to come jam with fellow "Swifties" in parking lot overflow spaces.

4. Custom

Offering options and tailoring an experience so that individuals feel like it was made for them is vital, along with being willing to be unique and not be all things to all people.

"I think the mass market has worked so hard over the years to create an experience that would please everybody," Kritz said. "How could we create particularly a retail environment where everybody would be happy."

Emerging technologies, like AI, have been a factor here, particularly because the social media Gen-Z takes for granted has always been designed to tailor the experience to each individual with complex algorithms.

"Gen Z will demand, and hold you accountable, to deliver an experience that has been customized specifically for them. Because they have grown up expecting it, they've grown up with things that have been tailored to them."

5. Rewards

"If you don't give rewards, you're dead in the water," Kritz said. "Rewards are simply not enough," he added – custom is importance. "Don't force the reward down their throat, give them the gift of choice, it is a demand, it is an expectation."

Kritz made a point about Trader Joe's as an example of a brand that navigates this list well, particularly with authenticity; one example of which is the brand's ongoing decision to reject a retail trend by not offering self-checkout.

"I don't think they ever will, and I don't think they ever should because that's not their brand," Kritz said. "If all of a sudden there were self-checkout there, they have now lost their brand promise, and their authenticity, the thing that they stand for. That knowledgeable employee who loves food and wants to talk to customers about food."

It illustrates a vital principle at the outset: just because Gen Z is embedded in technology doesn't mean that simply adding tech for its own sake will do you any favors. "Just because the tool is there, doesn't mean it's right for the brand," Kritz said. "It doesn't mean it's right for your brand and its promise — and it doesn't mean that just because you put in something flashy that gen z is going to be down with it — because authenticity matters most."

Gen-Z in action

Kritz then invited onstage three students from local Charlotte schools for a Q and A and to discuss the research findings. APC worked with the local school district to identify volunteers to serve as a focus group.

For example, one panelist was asked about a brand she has always loved from a young age.

"Nike, because I play sports, I play softball specifically, and the first pair of cleats I owned were Nike, and I even own Nike cleats today… everything I wear for sports athletics specifically is Nike. I guess it's just the quality, and I know I can always expect a high quality from Nike and that's what got my attention."

The panel elaborated on additional examples that expanded on a number of points highlighted in the study, especially the question of authenticity and personalized experiences.

The ICX Summit is an annual gathering presented by the Interactive Customer Service Association, an organization dedicated to revolutionizing the customer experience for brands of all sizes.