Marketing
to Gen Z
A Fresh Approach to Reach
a New Generation of Consumers
Table of Contents
02 Introduction
05 The Next Generation:
Changing Course for a New
Mindset
07 Tech in Perspective:
Understanding the
“Post-Technology” Generation
10 The Pendulum Swings:
Understanding Gen Z’s
Practical Side
- Gen Z Goes Shopping
- The Media Habits of Gen Z
- The Gender Distinctions of Gen Z
15 Top 10 Takeaways from the
Experts: Putting Generational
Insights into Action
02
INTRODUCTION
Gen Z is changing the rules of consumer
engagement when it comes to media,
shopping, technology and brand loyalty.
How can brands evolve to meet these Key findings:
expectations? This report examines new data
around Gen Z’s motivations, behaviors, and Young consumers crave in-person settings
preferences–and provides strategic ways for more than brands think. But they expect
marketers to engage and drive them to action. an experience that is immersive and
experiential, not simply a place to make a
To help marketers put the Gen Z difference purchase.
into real-world context, Sailthru parent
company, CM Group, recently partnered with Gen Z expects a “post-technology”
F’inn, an innovation agency that combines omnichannel experience across every
design thinking with user-centric insights, on touchpoint.
a cross-generational survey of more than 1,000
consumers. The supply chain is about more than
delivery updates. It’s an essential part of
Marketers who aren’t evolving their creating a dialogue with Gen Z about the
strategies to engage this younger brands and products they love.
generation are already falling behind.
AR, VR, and other emerging technologies
are cool–but only if they deliver true
enhancements to the customer
experience.
Gen Z might be the most ad-adverse
generation living today, yet they’re also
the most receptive to value-oriented
messaging and tactics.
03
More than any prior
generation, Gen Z expects:
- Personalized communications
from companies
- Seamless experiences across
all channels
Gen Z Snapshot:
22% of Gen Z has used Apple Pay,
compared to 13% of millennials, 11%
of Gen X, and just 5% of boomers
49% say they obtain their news and
information from YouTube vs.
37% of millennials
25% are optimistic about climate
These findings emphasize the vital
change vs. 32% of millennials
importance of a data-driven customer
experience.
55% want to wait until At the same time that Gen Z emerges as a
technology is proven to work key target audience, brands are evolving
vs. 47% of millennials their capabilities, and these two things
will be inextricably linked.
A focus on customer-centric
38% prefer to rent or shop for items
marketing driven by zero- and
second-hand vs. 27% of millennials first-party data, and automated
AI-driven personalization is the
best way to reach Gen Z.
04
PART ONE
The Next Generation: Changing Course
for a New Mindset
Marketers: Get ready for some messaging habits is only going to grow. This critical point
whiplash. You’ve likely spent the past two in their lives provides the perfect opportunity
years adapting to new expectations around for brands to collect key data insights that can
brand values and propositions in a turbulent be used to segment and personalize outreach
world. From the effects of the pandemic to to ensure relevance now and in the future.
new urgency regarding diversity and inclusion
to the ever-escalating impact of climate Pew defines Gen Z as people born between
change, marketers have been pivoting around 1997 and 2012. Growing up in the shadow of
highly charged topics that have reshaped their the September 11 terrorist attacks, all they’ve
approach to messaging, advertising, ever known is the polarization that defines the
and overall customer experience. current political environment. Gen Z entered
the workforce in an economic recession, and
Today, brands have an imperative to rethink they’re the first generation for which social
their marketing approach. In doing so, it’s time media and constant connectivity has always
they take a fresh look at Gen Z. The oldest in been an expectation.
the bunch are graduating from college, getting
jobs and starting their adult lives, and the
influence of their spending power and media
05
Gen Z has grown up in a different world The future of retail is “phygital.”
than the generations that preceded it. The boundaries between physical and
But importantly, it’s also experienced the digital shopping experiences have
past two years in a different way than vanished. Success in an omnichannel
other generations. It’s not hyperbole world requires stellar in-person and
to say that the world we live in has online experiences—and the ability to
fundamentally transformed over the past transition from one to the other.
24 months. Consider:
Sustainability is now table
stakes for business success.
The workforce has never been Sustainability initiatives aren’t a
more diverse. “nice-to-have” for businesses anymore.
As of 2020, multiracial individuals Today, climate risk is investment
and people of ethnic minorities risk, and the future belongs to the
constituted the majority of the U.S. businesses that prioritize social and
population under age 18. By 2044, environmental responsibility.
that statement will be true of the
full population.
This is the reality in which Gen Z is
emerging as the primary driver of our
The future of media is social workforce and economy. And it’s in this
and fragmented. new world that this bold yet grounded
Today’s primary communications generation is positioned to redefine—well—
vehicles are participatory—and there just about everything.
are more of them than ever. For brands,
marketing and messaging at scale will To guide their media and marketing
never look the same. strategies in the coming years, brands need
fresh insights around the generational
differences that are reshaping the
landscape, particularly as it relates to the
growing influence of Gen Z. That’s why
we undertook this study. And here’s what
Technology is reshaping we found.
how we work.
The pace of technological disruption Methodology
will continue to increase. In the future The purpose of this research, undertaken
of work, as AI and machine learning by CM Group in partnership with F’inn, was
absorb a wider array of repetitive work to gather insights into the consumer out-
responsibilities, we will see look for the next five years. For this study,
a shift away from rote tasks and we conducted 15-minute online quantita-
toward technology skills, creative tive surveys with more than 1,000 U.S. con-
jobs, and empathy-focused human-to- sumers, across all generations, between
human connections. Sept. 30 and Oct. 7, 2021.
06
PART TWO
Tech in Perspective: Understanding
the “Post-Technology” Generation
Just because Gen Z has grown up with more The excitement and idealism that has
access to technology than any other generation colored digital growth and new technology
doesn’t mean they’re more obsessed or in the past are fading, as is the danger of
enthusiastic about it than older individuals. misinformation and misperception. In a
With so much technology available to them sense, Gen Z and younger millennials have
since birth (from Instagram to Apple Pay), “mastered” technology. They use it to suit
they’re comfortable taking what they want and their convenience, and they’re appropriately
leaving what they don’t need. They’re not about skeptical about tech capabilities and company
to marry a robot and never leave their rooms. motivations. According to our research:
In fact, they like in-person social interaction
and shopping, and they aren’t afraid to ditch
technology for a better experience “IRL.”
07
Have Used Apple Pay in the Last 6 Months
22%
13%
11%
5%
Gen Z Gen X
Millennials Boomers
Gen Z ranks their online
privacy as being less
important to them than
other generations.
50%
However, their usage of ad blockers
and other web browser add-ons to
prevent advertisers from tracking
them is on par with others.
Gen Z are more likely of Gen Z say they have
than other generations control over their
to have downloaded an personal data.
app they saw advertised However, they are more likely than
or to have watched an ad in a video other generations to admit that
game to unlock a bonus. they don’t know how much their
personal data is worth.
08
Gen Z is less likely
While Gen Z avoids ads more than than other generations to
any other generation, they are object to companies having
less likely to object to ads that are
relevant to their needs and lifestyle.
their personal data.
In this regard, they prefer native
ads more than other generations.
Interestingly, they’re
also the generation In order to meet younger consumers on
that’s most likely to their level, brands must become masters of
make a purchase technology. More than anything, they need
based on an ad, and to be respectful of Gen Z’s cautious approach
55%
to advertising and be prepared to deliver
value in exchange for personal information at
every turn. This requires agile omnichannel
technologies that can collect insights and shift
to accommodate individual preferences. For
of Gen Z thinks the ads example, presenting recent online shopping
are the best part of the behavior to an in-store associate to ensure that
Super Bowl. they can be as helpful as possible to a Gen Z
customer looking for a specific item.
09
PART THREE
The Pendulum Swings:
Understanding Gen Z’s Practical Side
In addition to their sophisticated yet cautious
approach to technology and advertising, Gen Z
is proving to be a more practical and ambitious
18% of Gen Z want to be
group than the generations that came before
them. This means they’re looking for a deeper
highly educated—
level of authenticity and straight talk from the a full 8% higher than millennials.
brands they patronize.
Here’s where Gen Z stands out:
Optimistism about climate change
Gen Z is less optimistic than millennials
about major societal challenges like
climate change and gender and racial
equality. For example, only 25% of Gen Z
32%
are optimistic about climate change, vs.
32% of millennials.
25%
of Gen Z consider a
high-paying job to be a
sign of success in their 32%
personal lives -- 10%
higher than any other generation.
Gen Z Millennials
10
Gen Z ranks authenticity
as being more important
than almost any other product and
company attribute.
Gen Z, despite being
early adopters of
mobile wallets and
certain other digital
conveniences, is
generally more
cautious about
tech adoption than
millennials,
with 55% wanting to wait until
technology is proven to work Not surprisingly, Gen Z has embraced digital
compared to 47% of millennials. and mobile shopping, with 75% shopping
on their smartphones compared to 69% of
millennials (and far lower percentages of Gen X
and boomers). That said, they’re just as likely
as other generations to seek out in-person
experiences.
38% of Gen Z prefers to
rent or shop for items Interestingly, Gen Z shows a higher preference
second-hand, versus for in-store shopping than millennials in multiple
categories, including electronic devices (43%
27% of millennials. Gen Z is also more likely vs. 37%) and clothing (43% vs. 40%). Millennials
than millennials to use coupons and promo have higher in-store preferences than Gen Z
codes when shopping. when it comes to health and beauty, as well
as appliances.
Gen Z Goes Shopping
This affinity for both online and in-person ex-
Gen Z shoppers are distinct from other periences underscores the need for brands and
generations in their preferences—and perhaps retailers to create hybrid “phygital” experiences
not always in the way you would expect. that acknowledge the merger of commerce and
11
content. “Brick-and-mortar spaces, as well as Interestingly, 49% of Gen Z says they
pop-up initiatives, aren’t sales drivers anymore. obtain their news and information
They’re media moments,” says Monica Deretich, from YouTube, compared to 37% of
former VP of Marketing at TechStyle Fashion millennials. Also predictably, Gen Z tends
Group and proven leader specializing in strategic to dominate when it comes to apps like
data-driven marketing centered around custom- TikTok, Snapchat and Twitch. What’s a bit
er experience. more surprising is that they’re also ahead
of millennials when it comes to reliance
When it comes to making on Instagram and Twitter for news,
shopping decisions: despite those platforms having been
around long enough to be squarely in the
Gen Z is more likely than millennials to millennial wheelhouse.
seek out the recommendations of online
influencers they trust. Reliance on Social Networks for News
Gen Z is most likely to get excited about
30% 24%
brands that use ethically sourced materials
in their products and care about their
social impact.
Gen Z is turned off by a lack of
transparency when it comes to brands
30% 21%
and products, so companies need to be
forthcoming with information.
Gen Z is a generation that feels empowered to
go their own way, and brands can support that
by increasing their choice within the customer
journey. For example, a media brand could ask
newsletter subscribers if they’d prefer an SMS
41% 22%
push message each morning rather than an
email. Personalization works best when Gen Z
feels engaged and sees the benefit of sharing
49% 37%
preferences and information.
The Media Habits of Gen Z
The media consumption patterns and Gen Z Millennials
preferences of Gen Z vary in notable (though
not always predictable) ways when compared It’s also interesting to note that both
to millennials and older generations. Not Gen Z and millennials are significantly
surprisingly, Gen Z is more likely than other more likely than the older generations
generations to rely on social media and to trust the information they receive on
influencers to stay informed. social networks.
12
“Companies need to create and integrate
as many online, offline, and virtual retail
touchpoints as possible to create convenience
and choice, including social commerce and
more,” says Laura Carrier, a seasoned retail
and technology consultant who has worked
within retail brands including Saks Fifth Avenue
and Macy’s, as well as at digital marketing
firm, MediaMath.
In terms of advertising and
brand communications:
Gen Z indicates the strongest overall ad
avoidance among the generations, with
notable exceptions.
Gen Z reacts better to native ads than the
other generations, and they’re less likely to
mind being retargeted based on their recent
searches or purchases.
Gen Z is more likely than older generations
to be OK with ads showing up on the smart
devices in their homes.
Gen Z shares millennials’ higher preference
for interacting via social media, and they’re
also more open to communicating via
chatbots than other generations.
“Video is a key format for Gen Z since they’re
socialized to video (i.e., TikTok, TikTok and more
TikTok), and it’s an immersive way for publishers
to deliver messages with their marketing
clients,” says Kerry Twibell, a former media
executive who has worked at MediaLink, Hearst,
Conde Nast, Newsweek, and News Corp. The Gender Distinctions of Gen Z
“Additionally, on social networks, advertising is It’s worth noting yet another distinction from
content, and it’s presented in a way that’s almost those that came before them: Gen Z has a
indistinguishable from editorial content. Gen far more advanced and fluid understanding
Z is socialized to all of this. Publishers should of gender than older generations, meaning
consider their presence and voice on platforms, they’re less likely to adhere to traditional gender
and how they can partner with their marketing stereotypes and breakdowns as they move
clients to develop authentic integrations.” through life.
13
That said, we did see interesting distinctions Meanwhile, Nordstrom launched
emerge between Gen Z members who identify Phluid Project’s “Green” label using
as male versus those who identify as female. transmasculine and transfeminine
Among the notable distinctions, we found: mannequins. Such initiatives are heavily
targeted to Gen Z, a large proportion of
Gen Z males tend to be more altruistic than which shops outside of their gender.
females (24% vs 10%).
“While the biggest differentiator of Gen
Gen Z females are more likely to shop in Z is their diversity, the way that they
person than their male counterparts (52% think about diversity is in the context of
vs. 33%), and they’re also more likely to
the individual; each individual defines
patronize local and small businesses (32%
for themselves what and who they are,”
vs. 17%).
Carrier says. “They do not believe in
labels. They are the post-race, post-
Gen Z males and females love YouTube
equally, but females tend to favor TikTok, gender, post-sexuality generation.
Snapchat and Pinterest, while males prefer Interestingly, they are comfortable with
Twitter and Instagram. sharing personal information. So, what
this means for marketers is that they
Gen Z females prefer to interact with need to ask and then personalize. And
companies via email more than males (36% they need to think in terms of fluidity
vs. 26%). When there’s a problem, females – of image, of message, of content and
are more likely to pick up the phone and call of product.”
a company, whereas males are more likely
to turn to an online search.
Brands need to put the
Gen Z males are more likely than females
to make frequent purchases based on ads
control in the consumer’s
(43% vs. 27%). hand to define and identify
what best represents their
But here’s what’s most interesting about Gen preferences.”
Z: While gender is still relevant in terms of
understanding an audience through analytics, - Monica Deretich
Retail Industry Advisor
Gen Z sees little reason behind explicit labels –
and that includes gender. They think of gender “The way forward for marketers is
as a spectrum, on which every individual should not gender-based marketing, but
be able to decide where they sit for themselves. marketing to the individuals we all are,”
adds Deretich. “Brands need to put
Brands have taken note. For example, Victoria’s the control in the consumer’s hand to
Secret, the bastion of intimates for women, define and identify what best represents
recently launched its store of the future, their preferences. Zero-party data –
removing all images of women in order to not information provided explicitly by the
push a specific image, which includes gender. consumer – is a great way for
The brand now also offers gender-neutral marketers to put their consumers in the
clothes and has started using male mannequins. driver’s seat.”
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PART FOUR
Top 10 Takeaways
from the Experts:
Putting Generational
Insights into Action
Without a doubt, Gen Z will continue to redefine
the commerce and media landscapes—not to
mention society and culture as a whole—in the
coming years. So what best practices and go-
forward strategies can marketers glean from
these fresh insights into the attitudes and habits
of today’s young consumers?
We turned to CM Group’s panel of industry
specialists across media, retail and other
sectors to weigh in on the implications of
evolving consumer expectations for the coming
five years.
01
Brands must leverage data to unify
commerce experiences.
Gen Z is willing to exchange personal information
for good experiences, but that means retailers
and brands need to be tapping into the latest
technologies to ensure that it’s not just their
marketing messages that are delivering value.
15
“Collecting and harnessing customer data in
a privacy-compliant manner has never been
more essential to brand success,” says Deretich.
“But that data needs to be used to empower a
unified commerce experience—one that delivers
a strong value exchange for the customer
while also fostering AI-enabled optimizations
of marketing, as well as product development,
commerce experiences, the supply chain,
and more.”
02
Companies must adopt technologies
that enable them to move at the speed
of the customer.
Gen Z’s embrace of new social channels and
commerce technologies puts pressure on
brands to keep pace when it comes to options
and experiences.
“That means acknowledging shifts in
social channel preferences, with Gen Z leaning
intoTikTok, Snapchat and the Metaverse,”
says Carrier. “Retailers also need to transform
payment systems to embrace options like on-
demand delivery, contactless payment,
buy-now-pay-later, and other enhancements
that bring more flexibility to the
commerce experience.”
03
Companies must include Collecting and harnessing
logistics and supply chain
considerations in their customer
customer data in a privacy-
experience planning. compliant manner has
never been more essential
Gen Z’s brand loyalty hinges on transparency to brand success.”
and consistency across the full brand journey—
right up to the point where a product arrives - Monica Deretich
Retail Industry Advisor
on their doorstep. That means speedy, AI-
driven logistics, and supply chain operations
16
are as vital to brand success as strong
customer relationship management. 05
Retailers must reimagine their physical
“Marketers today need to look beyond customer experiences.
messaging,” Deretich says. “When
you own customer experience, Contrary to what some might have expected,
considerations well beyond marketing Gen Z desires for in-person shopping
matter deeply to your success—including experiences remain high. But their bar for such
automated fulfillment, cloud-based experiences is equally high.
logistics technology, predictive planning,
inventory visibility and next-day, “Retailers need to consider how they can
same-day, or even same-hour create deeper customer relationships through
fulfillment solutions.” experiential marketing,” Deretich says.
“Purpose-driven discovery, education, and
entertainment are the real goals of in-person
04
experiences. Media is now a cost of sales, and
rent is now a cost of customer acquisition.”
Marketers must plan for a
world of converged content
and commerce.
To Gen Z, content and commerce
experiences are becoming
indistinguishable, and they expect the
brands they patronize to deliver not only
the products they need, but also the
information and entertainment to go
with them.
“Content is critical to creating relevant
moments that matter and driving a
sense of community with consumers,”
Carrier says. “New social channels are
quickly becoming avenues to drive both
engagement and sales.”
Content is critical to creating
relevant moments that
matter and driving a sense of
community with consumers.”
- Laura Carrier
Retail and Technology Consultant
17
06
Brands must define sustainability and
07
Media brands must take a stand.
communicate around it.
Gen Z wants brands to stand for
Sustainability and social impact are matters of something,
significant concern for Gen Z, and these factors and that includes their media brands.
deeply influence their purchasing decisions.
“This generation is interested not only
“How a company defines sustainability will in the type of coverage or content a
vary by demographic, region, and individual, media organization provides, but also
and retailers need to consider how and to what how they’re acting on it,” says Allison
extent they address this issue when it comes Mezzafonte, a former media executive
to marketing, logistics, packaging, product who has worked at Bauer Media,
and fabrication, business models, and more,” DotDash, Hearst, AOL, and Elle Decor.
Carrier says. “Sustainability and related topics
represent an important way to connect and build “This can include a reduction in a media
authentic relationships with consumers outside organization’s carbon footprint via a
of the usual promotional communications.” remote workforce, as well as its actions
on diversity, equity, and inclusion
(DEI). Make no mistake: Gen Z is paying
08
Companies need to think of media
attention to these things.”
in terms of voices versus outlets.
Gen Z puts more stock in the opinions
and recommendations of influencers
than past generations, and that’s heavily
shaping how they approach media
in general.
“Unbundling of content has been
happening across media, and we
anticipate that shift happening even more
going forward, followed by some strategic
rebundling (as evidenced by recent M&A),”
says Twibell. “Individual voices are gaining
prominence, and especially for younger
generations, the idea of trust in media is
shifting to voices even more than brands
and media outlets.”
18
09
Companies need to prepare for
subscription saturation.
Younger generations, and Gen Z in particular,
are embracing subscription models. But they’re
also money conscious and always looking for
more value. That’s going to require companies
to consider how to rebundle media for a new
generation, even as they elevate individual voices.
“There’s already talk of subscription
saturation in the market,” Mezzafonte says.
“As the market matures, there will be ongoing
consolidation and new alliances with an eye
toward providing a better CX for customers.
Increasingly, media consumption may move
toward a ‘class ‘pass’ model.”
10
Media and marketers must position
themselves for the proliferation of AR
and VR experiences.
Gen Z is far more willing to embrace augmented
and virtual reality options when it comes to daily
experiences. Increasingly, media organizations
and brands need to figure out where they can Individual voices are
authentically participate in (or create) these new gaining prominence, and
virtual spaces. especially for younger
generations, the idea of trust
“Media consumption will move into a 3D
in media is shifting to voices
experience instead of the current state of 2D
consumption,” Twibell says. “We’re entering a new
even more than brands and
phase of ubiquitous 5G, and major tech platforms media outlets.
are investing in AR/VR content and hardware. -Kerry Twibell
This will reshape the media landscape, and Gen Z Former media executive who has
will be at the front of the adoption curve.” worked at MediaLink, Hearst, Conde Nast,
Newsweek, and News Corp
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About Sailthru
Sailthru, a CM Group brand, helps modern marketers drive higher revenue, improve customer
lifetime value and reduce churn by using its powerful suite of connected capabilities. Sailthru’s
high-performance email, website personalization, mobile marketing automation, and unique
integrations power new customer acquisition by leveraging machine learning and first-party data to
easily deliver relevant, personalized engagement across all channels. The world’s most innovative
publishers, including Business Insider, Refinery29 and Food52, and the world’s fastest growing
ecommerce companies, including Everlane, Thrive Market and MZ Wallace, trust Sailthru to
help them succeed.
For more information, please visit www.sailthru.com.
