Gen Z's $2 Trillion Spending Power: Brands Scramble To Attract Their Attention

India has 377 million Gen Zs reshaping the country's consumer market in unprecedented ways. This demographic, comprising those born between 1997 and 2012, already drives 860 billion Dollars in consumer spending, and by 2035 they are projected to account for 2 trillion Dollars in economic activity. Brands are eager to capture the loyalty of this influential group but many businesses are still playing catch-up in terms of fully understanding and engaging this generation. A new report from Boston Consulting Group (BCG) and Snapchat, which surveyed 2000 Gen Zs and 1000 millennials, shines even more light on what it takes for brands to win the hearts of Gen Z.

While 45 per cent of the brands now understand the economic potential of Gen Z, only 15 per cent have actually begun to tweak their strategies to win the hearts of this generation. With Gen Z influencing each penny spent in India every second, brands can't afford to lag.

What's So Different About Gen Z?

To appeal to the imagination of Gen Z, brands need to know the values and shopping behaviours that make them distinct and different from earlier generations like millennials. The core values among Gen Z consumers are authenticity, visual inspiration, and excitement for new trends. For the most part, consumers are active in their interaction with the brands products, and creators that form today's retail future.

Gen Z likes trends over brand loyalty. It's almost 1.7 times more likely that they would prefer whatever is trending than any brand name. Visual experiences will be the driver of this generation, which means highly immersive and dynamic content that catches their attention and keeps in line with a completely digital-first life. Almost 80 per cent of Gen Z consumers prefer using the immersion of visuals around AR Lenses, GIFs, and other interactive content throughout their journey to shop.

Key Levers for Brands

The five strategies detailed in the report that brands should adopt to successfully engage with Gen Z are:

1. Innovate Rapidly: Gen Z is always looking for the new, "catch a trend before it's out" and as close to the trend, in terms of time-to-market as possible. Involving Gen Z in design and shortening the concept-to-shelf timeline are keys to success.

2. Social Shopping: Gen Z would love to shop with their tight-knit social networks. They share visuals and reach out to friends before a purchase and thus brands can increase their appeal by using the strength of social networking throughout the entire shopping journey, both online and offline.

3. Provide Immersive Visual Experiences: While Gen Z values engaging, highly visual content, such a group of people is attracted to immersive experiences through AR lenses, interactive pop-up stores, or even in-app experiences that involve gamification.

4. Build Omni-Channel Experiences: Gen Z seamlessly crosses over from online to offline. Brands must design completely seamless shopping experiences so that consumers can search, purchase, and interact across different channels without friction.

5. Leverage influencers: Authenticity is another value very dear to the heart of Gen Z. This generation looks to creators and influencers for purchase inspiration; thus, brands have to focus on building proper relationships with influencers representing the values of Gen Z who can speak and communicate in the same voice as the consumers of their products or services.

As Gen Z continues to grow in purchasing power, successful brands will be huge winners who demonstrate adaptation to their values and behaviours. Companies looking to reap the full potential of a 2 trillion Dollar opportunity should focus on innovation, visual immersion, social shopping, omnichannel integration, and influencer partnerships. The way to win Gen Z is to understand what they need and meet them where they are digitally connected, socially driven, and always on the lookout for what's next.