News & Views

Interview / Gen Z, The Optimisation Generation

by Kristina Dimitrova

At Marketo’s Marketing Nation Summit in Las Vegas last week we sat down with Jamie Gutfreund, global chief marketing officer of Wunderman and an expert in youth culture, to chat about Gen Z’s values, the death of brand loyalty and key platforms to watch.

You were responsible for the development and growth of the Cassandra report which looks in depth at young consumers. Can you tell me about the new trends, behaviours and attitudes that you see?

For the last 5-10 years the conversation has been about Millennials and now we’ve started to talk more about Gen Z. I like to call them The Optimisation Generation because they’re very different from Millennials. We just did a research study with Penn Schoen Berland and one of the most striking findings was that 84% of the teens that we talked to don’t like the direction in which the world is going. They don’t have confidence in brands, politicians, they don’t feel like they’ve been told the truth and so they almost have a confirmation bias where they expect the worst, they expect to be misinformed. As a result, they are seeking companies that are consistent, that provide good quality products and are also telling the truth. They know brands have a lot of data about them already but they see that as a social contract. They’re saying ‘OK, so what are you going to do for me in exchange for giving you all this data?’

These people look at digital and physical as one thing. They expect brands to be the same in-store and digitally, the customer service to be really seamless, the messages to be at right place, at the right time. Technology has enabled them to do so much. They have the world in their hands, they’re going to figure out the best price for products, decide whether or not to engage with a brand on their terms, what content to consume, what ads to click on or block. They also expect brands to notice them and this is a huge shift. We’ve gone from passive to participatory in a massive way. I think that’s a pretty striking change from past generations.

How can brands capture attention and build loyalty with these young consumers?

As Gen Z have very little trust in brands, getting their attention is obviously going to be very hard, but if you get them as consumers, keeping them could be even harder. The idea of loyalty for them just doesn’t exist. Brands have to earn that. Every interaction has to recognise who they are and what they want. This means no more personas or segments. As a brand you need to know what’s important to consumers, what their passions, interests and values are, what type of content they are looking for and what their issues are.

Also, it’s not about only driving transactions any more. It’s about making transactions easier for the consumer, taking away the hassle, inconveniences, inconsistencies and making the experiences seamless and interesting. The companies that do that look good and people spend more money with them. Doing this right takes a lot of data and what we like to call ‘now’ data. There are a lot of brands saying they use data but that’s data from six months or a year ago, which isn’t relevant. As a brand you need to know what your consumer is doing right now if you want to have a conversation with them.

So how can marketers react to that challenge in a timely way?

You have to understand your current data, but not in silos. Many brands have data for products in one group, analytics in another, marketing in another and they’re not talking to each other. Brands have to have this image of the consumer unified across all lines of the business. That’s really challenging, but it’s going to differentiate brands in the future.

If Gen Z and Millennials want realism and authenticity in advertising and the world around them, why are some brands slow to react and adapt to that?

I think they’re starting to take more risks. For example, couple of weeks ago Old Navy put a multiracial couple in an ad campaign and there was a very vocal group that didn’t like it, but there was also a lot of support. We will start seeing more of that. Because it’s great to be culturally progressive but you also have to run a business. Younger consumers want to see their world in the ad world and brands have started to see that when they reflect the real world it influences their revenue positively. Younger consumers don’t want perfection. They know about Photoshop and airbrushing so perfection isn’t appealing to them because that’s not the reality. They want to see how products are made, what are the functional benefits for them and how to take care of them.

Old Navy's multiracial ad

We’ve seen some brands that are vocal in certain markets about issues like same sex marriages and inclusivity, but very quiet in others. If the key to success for brands is consistency, do you think they’re just trying to capitalize on a trend?

There are some bandwagon brands and they get in trouble for that. When a brand jumps on a cultural moment and doesn’t have permission to be part of that conversation, the public reminds them pretty quickly. But if a brand has earned the right to be part of such conversation it is welcomed. It’s not appropriate for all brands to be part of certain cultural moments (and obviously cultural moments shift from country to country) and part of it is because consumers have access to information. They’re going to do their research and they’re going to know if they’re genuine or jumping on the bandwagon.

You mentioned in one of your previous talks that 50% of Millennials and Generation Z are choosing their outfits every day based on how they’re going to look on camera. Can you tell me more about that?

We’ve gone from passive to participatory marketing. We are part of the story. People know that their image is going to be presented visually in a way that has never happened before and so they’re thinking about what they’re wearing and, in a way, directing their story. It just shows you how visually aware we all are. Visual language is so much more expressive, quicker and more emotional than words. Also, images are not language specific. And this is really important for a generation that’s far more global. If someone speaks a different language it’s much easier to take a picture to communicate. And, of course, people care about what they look like. It’s a statement of who you are.

How do young consumers search for products and content nowadays?

They are spending an enormous amount of time following their passions and there’s a community that builds around these passions. The people that they meet in these communities are driving purchases and discovery. Think of it like digital WoM. If you’re really passionate about fashion and you’re following someone in that community (an influencer or not) you’re much more likely to listen to them than a brand. 37% of consumers research a product or brand based on the recommendation of someone they met online and 27% of those have made a purchase.

What are the key emerging technologies and platforms to watch?

I’m obsessed with Snapchat. Messenger is also becoming huge, integrating the likes of Uber, KLM, Everlane. I think brands need to start paying attention to these walled gardens. The services that are all packaged in these walled gardens are going to be very transformative. It goes back to being efficient. People don’t want to waste time. These platforms just work better for them and that’s what’s so appealing to consumers.

Previously you’ve talked about moving from ROI to ROR (return on relationship). What does that mean for brands?

You can’t just sell to people anymore. Because I can buy anything from Amazon or any other marketplace, I don’t need to have a relationship with your brand. But if you want people to be loyal they have to feel like you’ve invested in them as much as they’ve invested in you. And that takes data, time, moving away from personas. So it’s not about selling me more stuff, it’s making it easier for me to buy, which is different because it’s more consumer-focused.

How can brands adapt to the changing marketing landscape?

I always try to hire the smartest Millennials and soon will be hiring Gen Z. I think it’s about finding ways structurally within companies to be open to information coming up from the bottom, not just top down. Many companies are structured in the old-fashioned, command and control way. There needs to be ways of getting information from a variety of sources. You need to have employee base reflecting your consumer base so you have to have a global mindset, diversity of thinking and diversity of gender. There is no silver bullet for innovation but the smartest thing companies can do is hire great, diverse talent and listen to the younger generation because they’re changing the world.

Millennials are now the biggest workforce in the US. How do you see that changing the workplace and the way we work?

Both generations (Millennials and Boomers) have to understand the orientation of their generations. They have to learn to manage up and manage down. It’s hard because in training programmes Millennials are not taught how to manage and understand the older generation’s way of working. That’s just not part of an onboarding programme. I think being open to ideas from anywhere and giving Millennials a stake in the outcome is really key because they have grown up with their parents telling them their ideas are really important. So now that they’re in the workplace they are optimistic, idealistic and they’re going to change the world. It’s a different value system to Boomers but both generations have to understand why that is the case. The political and economical landscape have influence on people and, in turn, how they behave in the workplace.

How does the marketer of the future look like?

I think they’re going to be storytellers fuelled by data. They will be able to understand data, to identify insights, and create campaigns that leverage all this digital technology but use creative to communicate with the audience. Most companies now are one or the other and the business that combine the two successfully will be the real differentiators.