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Day two at NRF: Retail bosses debunk Gen Z myths and discuss growth

If day one of the National Retail Federation’s annual conference, Retail’s Big Show, was all about AI, the overarching focus of day two was learning how to appeal to the modern consumer, especially Gen Z.

“Digital strategies to decode Gen Z” was the topic of one of the opening panels. Moderated by Hilary Milnes, executive Americas editor at Vogue Business, it featured representatives from some of Gen Z’s favorite companies, including Linda Li, head of customer activation and marketing of H&M Americas, Ann Piper, head of North American ad sales for Spotify, and Caleb Pearson, vice president of US customer engagement at McDonald’s.

Although these three brands operate in very different retail sectors, Li, Piper and Pearson agreed on a few common tactics for effectively engaging with the Gen Z consumer, from focusing on and enhancing the in-store shopping experience to learning how to “share the pen” with this younger, social-media-savvy shopper. 

Invest in a personalized shopping experience

Right off the bat, Li debunked the idea that Gen Zers are only interested in shopping via digital channels: “They [Gen Z consumers] browse, they learn, they experiment, but what we have seen is that the Gen Z customer actually prefers to shop in stores and that’s been something that’s been a huge lesson for us. 

“I think the reason for this is because the store experience allows for more personalization and for more socializing as well, especially in the post-Covid era…A big part of it is also the desire for self-expression, which helps define this generation quite a bit. The in-store shopping experience can really enable that [sense of self-expression], but as brands and retailers, it becomes incumbent upon us to deliver those in-person experiences that can be differentiated and allow for that aspect of personalization and self-expression.”

A few ways that H&M is attempting to differentiate the in-store shopping experience in various locations is by having specially curated Spotify playlists for specific stores or having a different noted fragrance for a store. 

Let Gen Z in on the (marketing) fun

All three panelists agreed that Gen Z is wary of inauthentic marketing tactics from brands. To navigate this, McDonald’s Pearson has coined the term “sharing the pen” to describe the act of letting Gen Z consumers help shape a brand’s marketing strategy and engaging with these creatively-minded consumers afterward.

For example, Pearson pointed to the Grimace Shake takeover of 2023. To honor Grimace, a character in the McDonald’s storytelling universe, the fast food retailer decided to make a purple shake and release it on his birthday, June 12. However, the campaign did not go off exactly as planned.

The day after the shake was released, a TikToker released a video of himself taking a sip of the Grimace Shake, which then dissolved into a shot of him lying on the floor with the purple drink under and surrounding his face, similar to a murder scene. The video immediately went viral, garnering over 2.6 million views on TikTok alone, and led to a countless number of parody videos of McDonald’s customers pretending to have died from drinking a Grimace Shake. What some may have viewed as a marketing disaster turned into a boon for McDonald’s. 

By playing along with the silly, if slightly morbid, narrative and allowing its customers to influence the product’s storyline, McDonald’s sales rose nearly 12 per cent during the April-June season, beating Wall Street’s previous forecast of only 9.4 per cent. 

As Pearson told retailers in the audience, “This notion of ‘sharing the pen,’ I would just encourage brands to do it authentically. It has to be authentic, you can’t try to control it, and let them [Gen Z consumers] express themselves.”

Listen to the customer, even when it may surprise you

Just as Lin discredited the theory that Gen Z consumers are only focused on digital shopping channels, Spotify’s Piper busted down another long-held belief about teens and younger consumers.

When you think of the musical hits of the summer, especially among teens, you may imagine more carefree tracks. However, as Piper revealed, the most searched term amongst Gen Z Spotify users for summer 2023 was “sad”. Or “bummer summer” as Spotify dubbed the sad tunes that Gen Z listeners were craving.

Piper compared Spotify to a mirror and explained that between experiencing the Covid pandemic during their formative younger years, dealing with post-college adjustments, and other heavy issues, Gen Z consumers have a lot on their minds and are seeking out music and artists that help them express (there’s that word again) themselves and what they’re feeling. 

One reason that Spotify resonates with Gen Z so strongly is because of the listening platform’s ability to understand moods and moments. Similar to how Spotify Wrapped reflects a user’s playlist and top-followed artists, Gen Z consumers want to engage with companies that reflect their own beliefs and interests.  

How Glossier and Béis became the top dogs in retail 

Following these consumer insights, a panel on “Retail Disruptors” addressed the question of how some of the industry’s most exciting brands are appealing to Gen Z. 

Shopify president Harvey Finkelstein moderated a conversation with Shay Mitchell, founder and chief brand officer of Béis Travel, and Kyle Leahy, CEO of Glossier.

Finkelstein started by saying that “in the history of retail, the velocity at which businesses are being built today has never been seen before.” 

“Both Béis and Glossier have grown at what we call at Shopify, “holy shit” speeds,” he said, noting that Béis Travel’s generated over $200 million in sales in 2023 alone. Both brands have “created a category within a traditional category that just didn’t exist before,” he said, and have kept a “vise grip on the consumer.”

What have been the keys to their success? Both brands: 

  • Are open to innovation and listen closely to consumer feedback – both in-store and via various social media channels. They give the customer what they’re looking for, such as luggage with a built-in weight indicator.

  • Create fun and interactive temporary store experiences, such as the 2023 Béis Travel x Shopify holiday pop-up shop, to engage with the consumer and introduce new and mainstay products.

Glossier became Gen Z’s favorite makeup, skincare, and lifestyle brand by recognizing a market that was seeking something different and becoming a brand that defined a generation. 

While Béis Travel currently has a primarily millennial female audience, the brand is rapidly growing its base of Gen Z consumers with the brand’s launch of its Béisics collection, a line of aesthetic but accessible products, with a youthful energy that is appealing to the younger shopper.

From Glossier embracing the “your skin but better look” with lightweight, well-formulated products to Béis Travel catering to the trend-following, jet-setting consumer with practical but pretty travel tools, these brands are keeping up with the so-called flightiness of the Gen Z shopper. 

As Li stated, Gen Z isn’t flighty, they are simply well-educated consumers with a bevy of options to choose from. This means brands must ensure they’re the best option on the market by listening and reflecting back what Gen Z is really looking for.

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Source: https://insideretail.us/day-two-at-nrf-retail-bosses-debunk-gen-z-myths-and-discuss-growth/