As business continues to adjust to the demands of millennial consumers, they must also consider the expectations of Generation Z. Don Brenchley, Director of Industry Strategy, LLamasoft, explores how brands can cater to the needs of the new kids on the block.
Every generation is assigned its own tag such as ‘Generation Z’, ‘Millennials’ or ‘Baby boomers’ but the personality that each generation becomes known for is largely down to the social, political and cultural events during their own lifetime. Generation Z (those born from 1996 onwards) are the first generation known as culture creators.
They’re the most culturally diverse generation yet and instead of being told what to like, they decide what to like. They’ve shunned brand loyalty yet they understand the power their influence has on brands. As highlighted in Accenture’s 2017 Global Consumer Shopping Survey, the majority of Gen Z consumers (70%) like to leave written reviews despite being part of the least brand loyal generation yet.
When it comes to appealing to this generation, having a positive impact is more important for retailers than ever before. It’s key to driving up brand loyalty from a generation that is reluctant to pledge its loyalty to brands and its paramount to customer reputation among a generation that likes to leave reviews.
In the wake of the disruptive demands of the millennial consumers who came before Generation Z, brands have centred their service around convenience. But Gen Z demands that brands go further by complimenting that convenience with precision and personalisation.
The Next Wave
Gen Z represents significant spending power yet they are beyond the reach of traditional advertising. According to research from analytics firm Marchex, this mobile-centric online generation has a shorter attention span than any preceding generation.
For businesses that want to cater to this generation, the challenge lays beyond finding the right channel and format to engage with the consumer. Businesses must strive to react to emerging trends and get the right products to market as efficiently as possible, delivering to consumers whenever and wherever they want.
To understand how to cater to Gen Z, brands must consider what triggers the buying process, how Gen Z choose what to buy where and when but also how. They must also consider who is influencing their purchasing decisions, whether it be celebrities, friends or social media influencers. They must navigate the Gen Z consumer mindset when it comes to preferred methods of purchasing, fulfilment and customer experience. They must consider the customer experience that takes place within those processes and how this will impact customer behavior post-purchase.
Accenture’s study revealed that the majority of Gen Z shoppers (60 percent) prefer to purchase in store but 37 percent prefer to purchase online and or on their smartphones. Brands must ensure products are readily available in store and in the distribution centres that serve their online channels. Brands must implement digital supply chain technologies that provide efficiency in speed to market, accuracy in product delivery and maintain optimal inventory levels to ensure the right items are always in the right place.
Optimising the Journey from Point A to Gen Z
Delivering on the expectations of Gen Z will require a resilient and flexible supply chain that can accelerate speed to market in order to profit from fast-emerging consumer trends. The supply chain must provide increased flexibility to ensure sufficient stock levels in both fulfilment warehouses and retail stores. Achieving this comes down to collecting as much data as possible from every touchpoint across the supply chain network, providing a global view of each and every asset.
Of course, this requires a complete remodel of the existing supply chain, but existing supply chain modelling technology can integrate with the systems used to govern each of those assets and provide a clear end to end view of the entire network. Essential data from across the network can then be used to plan the best route from product conception to customer fulfilment.
Supply Chain Management (SCM) software that incorporates modelling technology is also enabling businesses to build digital models of their physical supply chains and using the data consolidated from across the supply chain network. This allows them to simulate and test different scenarios to understand how they will impact the supply chain in terms of risk and cost and how they can prevent such events negatively impacting supply chain operations.
To cater to the needs of Gen Z and the generations that follow, supply chain design must be continually analysed and remodelled. Data will become increasingly important in the challenge of meeting growing consumer demand and digitally transforming your supply chain is the key to unlocking this potential.