Millennials and Gen Z’s differ in a surprising number of ways, but some of the most important differences for brands come from how they behave as buyers.
Contrary to popular belief, Gen Z hasn't 100% abandoned the physical world for their smartphone screens. When it comes to branded experiences, they expect to move seamlessly across digital AND physical. And brands that cater to this are reaping the rewards.
We can’t teach you 99 tech tricks to turbocharge your day or how to open a banana like a monkey…but we CAN provide you with some of the secrets to capturing the hearts, minds and (digital) wallets of Gen Z -- the generation marketers can no longer afford to ignore.
Considering Gen Z is the first generation to grow up with the iPhone, Netflix and Snapchat, one might imagine that the secret to solving your generational marketing woes is the screen. But… Not so fast. Press pause and stay awhile.
In our latest Gen Z report in partnership with Ad Age, titled Gen Z: Decoding The Digital Generation, we learn why “phygital” — blending the physical and digital to create an ecosystem between the brand and consumer across the two worlds — is the real answer to your Gen Z marketing prayers.
It’s time for brands to break the barrier between the physical and digital, as well as to combine both, to provide Gen Z customers a complete “phygital” experience.
With popular e-commerce companies like AllBirds, Casper, and Everlane opening up brick-and-mortar stores and traditional retailers like H&M and Sephora investing more and more in their digital footprint, there’s no denying that “phygital” retail is trending. And for good reason — a recent report by Accenture found that 60 percent of Gen Z shoppers prefer purchasing in physical stores, rising to 77 percent in the U.S. And the UNiDAYS X Ad Age study we found that nearly two-thirds of Gen Z consumers use their smartphones for browsing, with 59 percent using mobile for price comparisons, and 58 percent look up product reviews on their screens. Yet another reminder that brands can’t afford to ignore the digital or the physical when appealing to Gen Z.
Nike has been doing a rockstar job of getting phygital with the launch of Nike by Melrose, a new store concept that’s inspired by and built as a hub for its local NikePlus members, and which was created in support of the brand’s efforts to unite digital and physical shopping experiences for customers. The concept store uses Nike’s New Nike App at Retail service, allowing NikePlus Members to reserve product to in-store Digital Lockers, scan product barcodes to learn more about products (i.e. item availability, available colorways) as well as access new features in their Nike App homepage.
Among other features, NikePlus members can even return or exchange goods curbside and shoppers with the app can view products that are in stock and reserve them. And for those shoppers who don’t need to try products on, Nike by Melrose also offers curbside pickup and drop off. Talk about a service for Gen Z: Our recent study in partnership with Ad Age entitled Gen Z: Decoding the Digital Generation, found that more than half use their phones to check retail item availability, and 64 percent use them to look for store locations.
Nike plans to launch similar shops around the world. A New York City flagship will open in the fall, and a Shanghai store will debut as well. Each concept store will have different features suitable to its local market, according to Nike.
It will be interesting to see how other brick-and-mortar and online retailers will use brands like Nike as inspiration in order to transform and bridge the phygital divide to appeal more to the generation with up to $143B in spending power.
One of the most surprising findings in UNiDAYS’ study with Ad Age is that 77 percent of the 22,723 college-age Gen Z’ers surveyed read printed books. For a generation that’s grown up immersed in screens, they truly value their time away from it, curling up with a good book away from the pings and posts. It all goes to show how brands can’t forget providing a physical experience in our increasingly digital-centric world.
With more and more augmented reality-powered books coming out these days (which blends reading with Pokemon Go-style technology), it will be fascinating to see if AR books are the ultimate jackpot for a generation who is all about phygital.
But don’t get too stuck on the physical. Gen Z isn’t just spending their dough on paperbacks. With 89 percent of UNiDAYS’ survey respondents saying they use one to 10 apps per day, they’re also spending a hefty chunk of change on apps. The question is which ones they’re willing to shell out for. One answer is… well, music to Apple’s, Spotify’s, Pandora’s and/or Tidal’s ears: That’s right, 66 percent of Gen Zers are willing to pay for music apps.
Music app providers focus on providing additional content and perks for youth to stay on one platform by tapping into Gen Z consumers’ desire to connect not only digitally, but also physically, by offering features that recommend local concerts to users based upon their music preferences. Spotify’s partnership with Songkick and Pandora’s acquisition of Ticketfly provide additional evidence of how important analog experiences remain in today’s digital age.
To Gen Z, physical and digital aren’t separate — they work together. Brands that can seamlessly bridge the physical and digital divide with truly phygital solutions that incentivize Gen Zers to shop will receive all the “likes” and “hearts” they can possibly handle.
To explore the full Ad Age X UNiDAYS report in full, go to Gen Z: Decoding The Digital Generation.
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