How Gen Z is influencing retailers’ acquisition strategies

Retailers’ marketing and merchandising teams have been thinking about Generation Z — people between the ages of 13 and 21 — for a while now, considering the influencer of the moment, what styles these consumers gravitate to and what social media platforms they’re using.

But the distinct qualities of Gen Z will influence brands in more ways than marketing strategy. We’ve seen examples of acquisitions, brand positioning and store strategy all reflecting the behavior of these young customers.

News of some recent acquisitions in particular show the importance of Gen Z.

1. Ace Hardware and The Grommet: Gen Z wants to buy niche, meaningful items. The Grommet is a platform for inventors and makers to have their goods discovered — a win for reaching the generation that finds thrill in discovering something new and unique.
2. Albertsons and Plated: YPulse research found that Gen Z feels more stressed and over-scheduled than Millennials did when they were teenagers. Gen Z is approaching the age when they’ll be making their own meals — since they’re of the opinion that mundane everyday tasks can and should be outsourced, meal-making is certainly to be at the top of the list.
3. Ikea and TaskRabbit: The younger generation had Helicopters and Tigers as parents, stressing schoolwork, sports and Model U.N. Retailers looking ahead know this generation is unlikely to have the tools to “do-it-yourself” — let alone the motivation to figure it out. Ikea’s acquisition of TaskRabbit might be a brilliant move for a retailer whose products need both tools and motivation. 

Generation Z can influence brand strategy. At NRF’s Shop.org ecommerce conference, Dormify President Caren Sinclair-Kay and Chad Kessler, global brand president for American Eagle, shared some insight into how they’re reaching these customers and responding to their needs.

Dormify is all about Gen Z: The company’s brand strategy isn’t focused on selling products, but rather providing useful, guided information that helps shoppers through key moments in their life. Employing college-age stylists to help customers design their dorm rooms has been successful in growing the brand.

Gen Z believes that what they purchase and wear must be in line with their individual values — it’s not about buying a label or a brand. American Eagle curated products and marketing to align with Gen Z’s desire to find who they want to be. The ability to interact with an authentic person is important to AE’s customer base, so instead of models, it’s been tapping into influencers and brand ambassadors.

Research on Generation Z shoppers consistently shows their affinity for a store experience. Both Sinclair-Kay and Kessler cited their own success with store-directed strategy and Gen Z customers. Sinclair-Kay said Dormify’s in-person experience is so powerful, in terms of getting instant feedback and shopper experience, that the average order value is six times what it is online.

We’ve already seen acquisitions of store-based brands this year as ecommerce retailers aim to expand their physical space. Given the data on Gen Z preferences and what we’ve heard from our retailers, we may be seeing a lot more of this tactic.