Well established brands have long been able to adapt to cyclical changes in consumer behavior. They wouldn’t be as well-established if they couldn’t. Recent years have witnessed some seemingly untouchable brands lose enormous amounts of marketshare or fall off the radar completely. CPG Brands who have immersed themselves in the zeitgeist are embracing a new, more influential buyer and forging stronger consumer relationships. Gen Z is driving consumer behavior and their effect is elevating the expectations of CPG brands. Don’t sleep on this group.
“Gen Z made up 40% of global consumers in 2020. 98% of Gen Z owns a smartphone translating to a substantial mobile market. By 2026, Gen Z’s income will surpass that of Millennials.” – truelist.co
This generation is not only changing ways that brands are viewed but they’re steering the buying habits and brand loyalties of older generations as well. In fact, according to the 2023 Edelman Trust Barometer Special Report:
76% of Millenials, 68% of Gen-Xers and 53% of Baby Boomers said that teenagers and college-aged people influenced where and how they shop. These numbers also show the influence is continuing to trend up. Especially with Baby Boomers showing a 12% increase from 2022.
EXPECTATIONS OF ACCOUNTABILITY
Instagram, TikTok and SnapChat all provide access to a global audience and brands (knowingly or unknowingly) now have a network of attention seeking, eager and willing spokespeople that without malice share reviews and opinions about the products and brands they interact with. Guided by the influencer mentality of Gen-Z, consumers are placing brands under more scrutiny than ever before. Brand integrity is questioned and loyalties are strained. When you think about the amount of information and misinformation that is accessable, it’s vitally important to control the narrative. To thrive in this environment, brands must establish trust, honesty, compassion, and fallibility.
RETHINKING THE PATH TO PURCHASE AND THE NEW CURRENCY: TRUST
The path to purchase used to be a linear path containing a series of consumer engagement steps leading to the action of a purchase. This linear idea doesn’t fit the purchase path of Gen-Z. The mindset of younger buyers dictates that purchase is no longer the end point but is actually the beginning of a brand relationship. (See Diagram Below.)
78% of consumer respondents stated they discovered things about a brand after purchase that initiated loyalty.
79% of consumers interact directly with brands beyond product use, i.e.: connecting on social media and sharing feedback.
In the past, brands may have considered their engagement beyond purchase as a way of promoting new products or offering discounts. Consumers have appreciated those things in the past, but the new consumers want to know more. What are your sustainability initiatives? How diverse is your leadership team? Are you working to make a difference in underserved communities? Are you taking a stance on societal issues? How well do you treat your employees? To adapt and thrive, brands and their companies must be transparent in their operations. Consumers are not just buying products or services, they’re looking for allies in the causes they care about.
THEY WANT TO KNOW MORE ABOUT YOU. MAKE THE STORY CLEAR AND HUMAN.
Again the 2023 Edelman Trust Barometer Special Report indicates that Gen-Z consumers list 3 main reasons for the desire to maintain an ongoing brand relationship:
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To evaluate a brand beyond its product
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To access discounts and other savings programs
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To gather information about a company’s policies.
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With a steady rise in consumer vulnerability — feelings of mistrust and susceptibility to fraud, the need for true brand partnership has become crucial to business. Validating the trust that consumers crave happens with honesty and accountability in storytelling.
PERFECTION NOT REQUIRED BUT FALLIBILITY IS VIRTUOUS.
It’s hard for big brands and their companies to admit when they’re wrong. Although Gen-Z places more scrutiny on brands than ever before, it seems they are more loyal to brands that can own their mistakes and make amends. The more human a brand is, the more accessible they seem to be and therefore, more attractive to their audience. The reality has been proven that younger generations are attracted to a brand that can admit fallibility, owning its mistakes and being transparent. According to a recent survey by Label Insight, 94% of consumers are more likely to be loyal to a brand that offers complete transparency. And 86% of consumers say that transparency is a key factor in their decision to buy from a brand.
SEA CHANGE
Within our scope of clients, we’ve seen a good response to this changing consumer dynamic firsthand. Not only has the Bachman team helped clients design, implement and produce sustainable packaging but we’ve also helped to articulate trust building initiatives. If you find your brand struggling to thrive in this generational consumer dynamic, reach out to us. We’ve got forward thinking, big ideas that can help your brand bolster trust and loyalty with your customers creating the connections that they want. Let’s get the conversation started.