Retailers Up Their Game To Win Over Gen Z

Part of the trick in retail is knowing when to pass the torch, so to speak – in other words, focusing more effort on reaching younger consumers and meeting their desires. Target stands as one of the latest examples.

To reach consumers on the hunt for offerings that are “clean and natural,” Target has rolled out its Everspring household brand. The line includes products such as dish soap, paper towels and laundry detergent. The selections are made from recycled and bio-based materials as well as natural fibers. They will also come with a new “Target Clean” symbol, which indicates an item is not made with chemicals like propylparaben or sodium laureth sulfate.

The items are sold in small quantities to catch the interest of Generation Z and millennial consumers who are just starting out and aren’t interested in buying in bulk. According to the report, Target research has shown these consumers aren’t as loyal to specific brands as older shoppers.

Christina Hennington, a senior vice president and general merchandise manager at the retailer, said it had taken over a year to bring the household brand to fruition. “From the sourcing to the packaging … we had to do it right,” she said. “We hired the right expertise to make sure the chemical quality was up to expectations.”

Gen Z Focus

The Target move underscores the growing appeal of offering sustainable products in hopes of becoming more attractive to younger consumers – and not just millennials. Indeed, retailers, including Target, are upping their innovation game when it comes to the so-called Generation Z. Not only is the chain rolling out more brands that target the consumer segment, but it has also launched a startup incubator and retail lab in hopes of connecting with those shoppers.

Larger retail trends support such a move.

Gen Z – generally defined as people born after 1996 – are expected to become the largest consumer segment within a year, when they will account for 32 percent of the global population. Those consumers have never known a non-digital, web-free world. They were youthful members of The Great Recession. And in the U.S. and certain other countries, they have never known a world without war.

Early signs indicate that Gen Z, despite digital habits honed since birth, will not reject the brick-and-mortar experience. One study that mirrors the findings of others – this one from Euclid Analytics – found that 66 percent of Gen Zers prefer in-store shopping, while 28 percent want to interact with store associates. That said, Gen Z, commonly considered a mobile-first generation, uses digital channels to research products, but then prefers to go to the store to touch and try out those products prior to making their purchases.

The consumer power of Gen Z also extends to influence: A report by IBM and the National Retail Federation said that 70 percent of the average family’s spending is influenced by these post-millennial consumers.

Much of what retailers are doing today to appeal to millennials – offering new products and services, and trying new ways to reach them – will likely spill over and influence efforts to reach more consumers from Generation Z.

Battle in the Cities

Take Jet.com, owned by Walmart. It is battling with Amazon for the coveted upscale, younger, city-dwelling consumer. Jet.com has broadened its selection and is rolling out same-day delivery in New York City for the kinds of items millennials purportedly crave, like craft beer and local foods. To assist in those efforts, Walmart has tapped another company that it acquired – logistics company Parcel – to bring grocery delivery to New York City customers within a three-hour window. That service option ups the ante for speed and flexibility through Jet.com, as the retailer previously had a relatively early 9 a.m. cutoff for same-day deliveries. To help meet its new delivery window, Jet.com plans to use its Bronx fulfillment center.

It’s a retail battle that never ends: the competition for younger consumers, and for those consumers who are steadily gaining more purchase power. The battle is likely to take place both inside stores and online, and will no doubt bring more experimentation and innovation.