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The fragmentation of the media landscape and changing shopping habits have forced retailers to tear up old marketing models and dive into social. Generation Z, defined as consumers born between 1995 and 2009, is looming particularly large in the minds of retailers, who cannot afford to ignore their increasing spending power.
Internal research from Superdrug owner AS Watson shows that Gen Z’s spending power in 2018 increased by a staggering 23% year-on-year.
The insight found that over 70% of Gen Z spending is on beauty – the highest among all generations, which has made AS Watson realise Gen Z must be the lynchpin of current and future plans. Evidence suggests the best way to reach this youthful consumer is through social media platforms.
Paul Greenwood, head of research and insights at social media specialist We Are Social, says he was told by one participant in a Gen Z focus group that they watched no television and spent a minimum of four hours a day on YouTube, six days a week.
This is no one-off, everyone in the focus group said that YouTube was their main media platform. This social media obsession appears to permeate every aspect of their lives.
Chloe Watson, 19, told a UK focus group held by AS Watson that social plays a big role even when she is shopping in-store. She told AS Watson she likes it when “there are fun things for us to do like playing on the makeup mirrors that let us create pics of ourselves to share on Snapchat”.
The trouble for retailers is the pace at which new social media innovations emerge, and the changing shopping habits of younger generations. Video sharing site TikTok is the newest kid on the block in the social media world, and retailers must scramble to get to grips with it if they do not wish to lose out on the lucrative Gen Z market.
One retail brand at the forefront of social innovation is Boohoo-owned fashion retailer Pretty Little Thing. Alice Oakford, head of social at Pretty Little Thing, reveals the brand joined TikTok at the beginning of the year.
“We have a TikTok influencer that works with us on identifying trends, creating new content; and really helping us to understand that younger Gen Z audience, because old fogeys like me might not have the day-to-day understanding of what is going on in that world,” says Oakford.
“We tend to deal with new and emerging platforms by making sure we are speaking to the early adopters and getting them in as early as possible.”
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Pretty Little Thing has a specialist responsible for each of the social media platforms it uses in order to understand the “sweet spots” of the channel and ensure content is tailored for each channel.
It is not only youth brands that are investing heavily in social, but also more traditional retailers who have a broader demographic.
One such retailer is Next, its core customer base ranging from 25 to 55-year-olds. It has been working with its ad agency Engine to use social media influencers to hone in on each of its demographics.
Influencers are driving the marketing agenda currently, but have received a great deal of flak for some of their practices.
“The term Influencer term can be divisive, and some people have negative connotations around it, but from a brand’s perspective it completely makes sense to use them,” says Next social media manager, Eleanor Wilcox.
“Influencers have a really engaged pot of people who they can talk to, who are following them because they value their opinions, sense of style, morals and values, it is a captive audience. For Next, it is about being able to tell our brand message through a really credible and authentic source.”
Competing in a fragmented media landscape
This ability to tap into the influencers’ following is key for brands struggling to compete for attention in a fragmented media landscape, where young shoppers have less brand loyalty.
“From our Gen Z research there is no real brand loyalty,” says Greenwood from We Are Social. “People will have brands they love, but they have a different list of priorities in terms of how they buy things and are more likely to be driven by cost. They will not stick to one brand, they will be more promiscuous and shop around.”
Retailers are therefore seeking to tap into the emotional connections that the youth market has with their favourite influencers.
The trend appears most pronounced among so-called Generation Alpha, also known as the children of millennials. Research from Wunderman Thompson Commerce (WTC) found more than half (55%) of children aged six to 16 say they want to buy a product if their favourite YouTube or Instagram star is using or wearing it.
The boundaries between social and retail are set to blur even more in the coming years with innovations such as Instagram Checkout, which allows Instagram users to buy products without even leaving the app.
This raises the prospect of product being bought directly from influencers’ profile pages and posts.
“Social is being woven into the customer journey a lot and we will only see that get bigger,” says WTC social commerce consultant, Chloe Cox. “Customers are using social a lot more for their purchases and younger people are looking for inspiration with social.”
The blurring of boundaries between social and e-commerce is also happening in the physical retail environment as well.
Tom Shipman, strategist at marketing agency RPM, which launched the recent Amazon Fashion pop-up store, believes social media’s use in-store is “part of a wider trend in which the lines between retail and media are blurring through things like live podcasts recorded in-store, shoppable catwalks through social, and live-streamed weekly product drops”.
“Social media in-store can be an effective driver of traffic with creative and unique Instagram-able installations or social ready fitting rooms,” says Shipman. “However, where I think it is particularly powerful and exciting is when it allows for further discovery and benefits the shopper journey.”
Shipman believes this was exemplified by Lego’s London Fashion Week pop-up store that used augmented reality (AR) to create an entirely new world within the physical four walls of the store. Shoppers were able to scan a Snapchat barcode through their phones, which generated a Lego DJ and Lego-brick mannequins wearing branded streetwear.
The AR-powered campaign was for the launch of Lego’s streetwear collection, and the range could initially only be bought exclusively from the virtual store. Augmented reality is likely to spur forward social even further. Snapchat has long been the go-to platform for AR experiences, but now Instagram has opened up its own copycat version to everyone.
Pretty Little Thing has already experimented with Instagram’s AR filters, becoming the first fashion brand to implement them. Oakford from Pretty Little Thing believes AR will be one of the next big things in marketing once more brands take the plunge.
“Us older marketers don’t want to lean into AR because we are used to it being a big scary thing to the left but I’ve really come around to it,” says Oakford. “In fashion there is so much opportunity and I would love us to be one of the first pioneering brands within that.”
Another major play used by Pretty Little Thing’s social media team to stay relevant to its young audience is the launch of a podcast.
The PLT: Behind Closed Doors podcast even reached the top of the podcast charts in the UK and is focused on female empowerment. “The topics we focus on are nothing to do with selling and all to do with building strong and confident women and I think that is what excites me the most,” says Oakford.
It is initiatives such as this – creating a strong brand identity – that can help retailers keep young customers engaged in an environment where loyalty is hard to come by. “You need to stand for something and be quite steadfast in your purpose,” says Greenwood. “For instance, in the United States, Nike has helped drive loyalty with a younger audience through its work with Colin Kaepernick.”
Once retailers have a strong sense of identity and purpose internally, it is vital they communicate this effectively through social because that is where the younger shoppers are spending their time.
The array of social media platforms and the pace of change may be bewildering for more traditional retailers, but some things in marketing will always remain the same. Great content will always win out no matter the platform.
“Personally, I have worked on social media for 10 years and while lots of stuff changes, a lot stays the same,” says Oakford. “Great content works everywhere.”
It’s a sentiment shared by Greenwood, who believes powerful social media content can help retailers build “cult status”. In a cutthroat and increasingly challenging retail space, retailers need to do everything in their power to exploit social media and create a cult-like devotion among the big spenders of tomorrow.