Can Gen Z Save Supermarkets and Brands?

August 18, 2015

A surge of younger consumers will bring vital tech and social media skills, and impressive buying power, to food retailers.

Yes. But only if food retailers and CPG understand them as customers and employees, and shape their company cultures to appeal to the 18-and-under set as both employees and customers.

Why focus on Gen Z now when Millennials are so hot, supplanting Boomers and Gen Xers with their size, voice and spending power?

Because Gen Z will soon prove to be as vital to supermarket prospects as Millennials are today, says Facts, Figures & The Future (F3).  Published estimates are that Gen Z will account for 20% of the U.S. workforce and 40% of all consumers by 2020.

Gen Zers:

  • Have life values that will push retailers and brands to do more good before rewarding them with business. This should inspire transparent efforts by retailers and CPG to support hunger, health and environmental causes.
  • Have technology and social media skills that could help chains improve at omnichannel, and keep relevant to a customer base that’s constantly connected via mobile and able to research products, compare prices, and know real-time availability. They’ve grown up in the Amazon era of 24/7 click purchases. Today, Jet, Alibaba and Kroger – which now has majority ownership of customer analytics firm 84.51° (the former dunnhumby USA) - help set the technology pace.
  • Already influence purchasing decisions of their Gen X parents, and will be scrutinizing consumers of their own before long.  According to the National Retail Federation 2015 Back-to-School Survey, 86.4% of BTS shoppers say their children influence one-quarter or more of their BTS purchases. More impressively, 9.7% of parents say their children influence 100% of what they buy for BTS, up from 7.6% in 2014.

The transparency Gen Z expects of retailers to earn their store visits, clicks and sales will also be needed to attract and keep them as employees, and maximize their potential. Findings of a new Robert Half and Enactus survey say “honesty/integrity in a boss” is the top quality Gen Zers seek (38%). And they are realistic about the work ethnic necessary to succeed: 77% believe “they’ll need to work harder” than prior generations to “have a satisfying and fulfilling professional life,” the survey said.

Their realism seems rooted in seeing Millennial relatives off to slow career starts due to a slow recession recovery. “While a 2015 Census Bureau report found that nearly a third of Millennials are still living with their parents, Gen Zers are growing up in a healthier economy and appear eager to be cut loose,” The New York Times wrote this spring.

This could be just the ticket for supermarkets and CPG companies ready to embrace them, says F3. We believe Gen Z employees will infuse retailers with many competitive necessities – among them the tech and social media savvy to compete, an ease with cultural diversity, exposure to foods of many cultures, and a sensitivity to the shopping and lifestyle preferences of this post-Millennial population sector of 61 million and rising to 80 million (Pew, HHS, Census and National Center for Health Statistics) ready to emerge in a big way.