CM Group Consumer Research Reveals Radical Actions Marketers Must Take to Capture Gen Z

Martech Leader Undertakes Landmark Study that Shows Brands Must Merge In-Person and Digital Experiences and Provide Unprecedented Authenticity and Transparency

CM Group, a portfolio of martech companies focused on multichannel digital marketing, announced the results of new consumer research that reveals the unique attributes of Gen Z compared to their millennial counterparts and older generations. Whereas brands have been largely focused on reaching millennials in recent years, the new findings indicate more than just generational differences — rather the radical actions marketers must take in order to appeal to this emerging force of consumers, now and in the future. With the oldest Gen Zers turning 25 in 2022, they are on the cusp of spending trillions of dollars with brands, making major decisions about retail preferences, finances, auto and healthcare, and consuming and sharing content in new ways. This forward-looking report sets the groundwork for marketing success through the next five years and beyond.

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In a survey of 1,000 consumers, CM Group found that Gen Z is better educated, more practical, more ambitious and more skeptical than their millennial counterparts. Compared to any prior generation, people under the age of 24 expect a relevant “phygital” experience that is seamless and personalized, both online and in-person. This subset of consumers also crave authenticity and transparency, and are confident using every channel available to them to live their daily lives — be it to learn, shop, communicate or for entertainment.

• 23% of Gen Z ranks authenticity as important, more than nearly any other product or company attribute such as design or social impact.
• 22% of Gen Z notes that a lack of transparency reduces their opinion of brands and products, more than any other generation.

“Gen Z presents a unique challenge and opportunity for marketers as they emerge from two years of hyper-focus on supply chain and pandemic-related issues. Contrary to popular opinion, this generation is not solely focused on technology-first experiences, instead preferring to balance both to suit their needs,” said Wendy Werve, CMO of CM Group. “These are consumers who are data- and privacy-savvy and are confident that they can get what they want both in-person and online. Marketers who aren’t evolving their future-looking strategies to engage this generation with transparent, authentic experiences are already falling behind.”

Phygital Retail Experiences Matter to Gen Z

Having a presence across digital and physical channels is no longer enough to reach the youngest generation of consumers. “Phygital” retail, which seamlessly merges those in-store and online experiences in innovative ways, requires a data-driven, agile technology foundation that enables personalization, easy purchasing and augmented in-store experiences like augmented reality and assisted shopping. As a generation of digital natives, Gen Z is ready for technology to enhance their in-person shopping rather than replace it.

• 47% of Gen Z prefers to shop in a store compared to online, more than any other generation.
• 75% of Gen Z prefers their smartphone when shopping online compared to 69% of millennials.

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“A focus on customer-centric marketing driven by zero- and first-party data, and automated AI-driven personalization is the best way to reach Gen Z consumers whether they are in store or online,” said Monica Deretich, veteran retail industry consultant and advisor to CM Group. “We know that Gen Z will shop with agile companies that deliver efficient, high-quality results across channels and they’ll trust authentic companies with their information if it enhances their experience. For brick and mortar retailers that means store associates become an even more valuable sales channel, and must now be armed with the same insights that digital marketers have at their disposal. In order to keep Gen Z customers over the long term, brands need to live up to these expectations – and deliver more.”

An Educated, Skeptical Audience Wants More From Media

Rather than turning to traditional media brands, Gen Z is likely to look for information on a different set of social media platforms than older generations. When seeking news and information, this emerging generation turns to influencers on platforms like TikTok and YouTube. While Gen Zers shun ads that interfere with their experiences, they’re also likely to embrace native advertising and integrated marketing messaging that is well targeted, even on new technology like in-home assistants.

• 49% of Gen Z says they obtain their news and information from YouTube, compared to 37% of millennials.
• 23% of Gen Z shares news and information on TikTok, twice that of any other generation.

“This generation was raised with social media and can easily discern the authentic, high-quality content from media companies, brands or influencers from misinformation and clickbait within these digital environments. Because of this, media companies have a unique opportunity to merge advertising and content strategies for Gen Z audiences,” said Kerry Twibell, veteran media industry marketer and advisor to CM Group. “In a trusted environment, delivering highly engaging messaging like personalized videos embedded within a newsletter or a livestream event on TikTok is much more interesting to Gen Z than that of their predecessors. Not doing so could mean missed opportunities to organically increase reach, audience loyalty and revenue.”

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