With Gen-Z holding a collective $44 billion in purchasing power, these findings offered a beacon of hope to many brick-and-mortar store owners, and an opportunity for digital-first retailers to expand to the high streets.
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“Digital retail is becoming more inclusive of luxury brands as younger customers do not have the same mental barriers to prevent them from spending larger amounts on online platforms,” says Cyril Ratel, founder and CEO of e-commerce-first luxury watch brand, Ratel Geneve. “And while digital experiences are getting more high-end and personalized, we saw opening physical showrooms as a way to extend the specialized attention that we provide online, reinforce our brand, and build deeper relationships with customers.”
Ratel Geneve is not alone. According to IHL Group, thousands more physical retail stores opened than had closed in 2017. But there’s a caveat: the health of many retailers depends on their ability to engage younger cohorts. Here are a few tips for attracting and retaining young customers.
1) Understand mobile trends
There is the need to emphasize the customer experience, and differentiate through personalization. These strategies are particularly important to younger audiences.
In general, 70 percent of customers expect a more personalized brand experience, and 83 percent use their mobiles while in-store. But the way mobile devices are used varies across generational cohorts. When you look at the behavior of Gen-Z, for example, whose oldest members are now 21, texting and Snapchat are used in-store far more frequently compared to previous generations.
One of the best ways of attracting these digital natives is by harnessing this behavioral knowledge to drive personalization. Sephora is a prime example. They created a Snapchat lens, which is essentially a brand-sponsored image filter, to offer up an instant virtual makeover to Snapchat users. In tandem with a geo-filter that sent notifications to customers within a designated range, the strategy also encouraged foot traffic.
2) Improve influencer marketing
In an age where customers are weary of being sold to and more than 40 percent of Millennials use adblockers, influencer marketing is gaining traction. According to a Tapinfluence report, “consumers are having conversations with their peers online long before they make a purchase. To be effective, brands need to be a part of that dialogue.”
When implemented thoughtfully, influencers reach a targeted audience while building trust. That’s important, since many consumers don’t trust adverts and won’t base their buying decisions on them.
But macro-influencer types, like Kim Kardashian, may be going out of style. As consumer awareness of influencer marketing increases, a big-budget endorsement deal with a celebrity can ring hollow.
Moreover, with increasing pressure on paid influencers to disclose sponsorships, the consumer sentiment surrounding sponsored influencer posts is more in line with adverts than word-of-mouth validation. This shifting sentiment doesn’t mean that influencer marketing has lost its appeal, however. Brands simply need to be more creative when developing influencer activations.
3) Empower brand ambassadors
“We know that authenticity is important in executing an effective influencer marketing campaign,” says Tanya Bershadsky, Emmy-nominated producer, digital video pioneer, and CEO of Casting Influence. “And one of the easiest ways to convey an authentic message is by engaging the folks who are already ambassadors for your brand.”
Bershadsky, who has worked with multiple YouTube celebrities, as well as traditional media celebrities, urges brands to focus less on number of followers, and more on an authentic message. Moreover, she suggests empowering brand ambassadors to have creative control over influencer activations.
Becca is a great example. After noticing a spike in sales following a post by YouTuber Jaclyn Hill, Becca reached out to her and ultimately ended up partnering with Jaclyn and Sephora on a product line on which she and her followers were encouraged to iterate. They made an exclusive quantity available to Jacyln’s following before the public launch, and it sold out in seventy-five minutes.
4) Focus on Instagrammability
The popularity of a local ice cream shop often has lines around the block just so people can snap an Instagram picture of photo-friendly desserts. Because Instagram and Snapchat are particularly adopted by younger generations, offering up aspirational visuals is key. Even subtle details that give customers a unique and snap-worthy experience can go a long way.
Perfume brand Viktor & Rolfe took this strategy to a new level during Emmys week a few years ago. They turned a visually striking full-sized bed made of flowers into a photo booth at the Vanity Fair Social Club. What’s more, influencers that tweeted out their photo got to take home a free product, resulting in numerous social shares.
Brands can also incorporate influencers in their visual strategy. “I can’t tell you how much production value it adds to the content when [influencers] can shoot in the actual store,” says social media celebrity Lauren Francesca. “It really helps to bring together the visual unity of the brand.”
5) Boost user-generated content
Organic user-generated content is a digital marketer’s dream. Giving people a reason to shoot your product is the first step. The next step is to leverage it, by having them tag you in photos or use relevant hashtags.
Women’s clothing company, Aeire, managed to whip up a storm of user-driven content by riding on the coattails of recent headlines about too much photoshopping in pictures. The clothing brand pledged to keep it real and stop retouching photographs, encouraging users to upload their own photos in a bathing suit–and donating $1 to the National Eating Disorders Association for each photo.
Brands can also take that content offline and into your store by awarding winners, or those customers mentioned, with a prize or exclusive event. Many times, brands miss opportunities to continue conversations or take relationships offline. The less transactional your interactions on social media, the more authentic those relationships become over time.
Attracting younger customers does not have to be expensive or elaborate. Understanding behavioral differences, empowering brand ambassadors, and leveraging aspirational visuals into user-generated content can all help to bring digital natives to your storefront.