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IRI Uncovers Distinct Purchase Motivators of Emerging and Powerful Generation Z Shoppers

IRI’s Generational Study Uncovers Keys to Understanding and Designing Personalized Marketing Strategies That Win with Gen Z Shoppers

CHICAGO – April 18, 2018 – IRI® today announced findings from two recent studies into the shopping attitudes and behaviors — and the emotional drivers — of Generation Z (aged 21 and under), providing manufacturers and retailers valuable insight into how to effectively communicate with this generation of consumers. In partnership with The Family Room LLC, these studies surveyed a cross-generational sample of this emerging population segment and shows that a brand’s authenticity is more important to Gen Z than preceding generations. Findings also show that Gen Z’s preferences tend to have significant influence on the purchase behaviors of their household — meaning that manufacturers and retailers are smart to adjust their marketing strategies now to win the hearts and minds of Gen Z shoppers.

“Gen Z is deeply motivated by authenticity and a brand’s ’emotional DNA,’ which we define as how completely a product or brand aligns with the values shoppers attribute to it,” said Robert I. Tomei, president of Consumer and Shopper Marketing and Core Content Services for IRI. “Because Gen Z shoppers rely more on brand recognition to make purchase decisions than their millennial counterparts, it is critical that manufacturers and retailers create transparent and authentic relationships with the Gen Z population early on to build loyalty as their purchasing power grows.”

The research from IRI’s latest study, which builds on the initial Gen Z analysis released in September 2017, links the unique attitudes and behaviors of Gen Z to household purchase behavior data, providing CPG manufacturers and retailers with actionable insights that identify growth opportunities. In addition to the importance of authenticity, some highlights from the study include:

  • Gen Zers are active participants in their family’s grocery shopping. IRI’s study found that 47 percent of older Gen Zers (aged 18-21) participate in their household’s grocery shopping. Further, parents say their Gen Z kids influence what they buy at the grocery store. As Gen Z’s influence continues to grow and their brand loyalties and motivations become more refined, understanding Gen Z’s unique influences and how they play out at the shelf will be critical for manufacturers and retailers.
  • Personalization isn’t creepy — it’s cool. Thirty-eight percent of Gen Z kids think it’s cool to get ads or promotions in their social media feeds for products based on their interests/shopping habits. That’s much higher than their millennial counterparts (21 percent for young millennials (aged 22-30) and 30 percent for older millennials (aged 31-40). And for younger Gen Z kids, personalization is seen as a great way to discover new products/services (42 percent of young Gen Zers agreed with this statement).
  • Variety is a must. IRI’s study found that product variety (i.e., flavors) is very important to the Gen Z’s cohort that substantially influences the buying behaviors of their households. The number of unique Universal Product Codes (UPCs) purchased in households with Gen Z kids are significantly higher than those without. For example, in the cold cereal category, Gen Z households purchased 12.4 unique UPCs per household in the category compared with only 7.6 unique UPCs purchased by households without a Gen Z member.
  • A healthy lifestyle is broadly defined. Sixty-six percent of the Gen Z population said that “Feeling Good About Who I Am” is a part of being healthy, and 62 percent cited “Staying Positive” as a major contributor to health. These responses underscore the values-based, holistic approach Gen Z brings to all of their interactions, including those with brands.
  • They want to be a part of the feedback loop. IRI’s and The Family Room’s findings show that Gen Z has little interest in or patience for brands that try to “sell them” without sincerely working to get to know them. They want to be an active part of the brand relationship and want a feedback loop and an interactive dialog — underscoring social media’s importance in both reaching and engaging with them.

“Gen Z is fueled by possibility,” said Lynne Gillis, principal of Survey and Segmentation for IRI. “They see windows where others see walls. They are not afraid to create those things that they want but cannot find — they truly do want to be a part of the innovation process. But they want purposeful, collaborative innovation. If new products or services are not highly aligned with their specific needs and values and don’t fulfill a meaningful purpose, they’re quick to dismiss them. To accomplish this and reach them, manufacturers and retailers must leverage the power of personalization to reach Gen Z, the first generation that has no memory of life before the internet and the first majority minority cohort (‘diversity is natural’) in U.S. history. With our sophisticated data-based solutions that consist of millions of shoppers and attribute-specific insights, IRI is uniquely positioned to help marketers better understand and activate against the diverse and powerful Gen Z market.”

For more information on how to leverage IRI’s research on Gen Z for insights that drive growth, contact IRI expert Lynne Gillis at Lynne.Gillis@iriworldwide.com.

Helpful Link:

IRI Generation Z Study Initial Findings Press Release: https://www.iriworldwide.com/en-US/Insights/news/IRI-Survey-Uncovers-Distinct-Attitudes-and-Behaviors-of-the-First-Native-Digital-Generation-Generat

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About IRI

IRI is a leading provider of big data, predictive analytics and forward-looking insights that help CPG, OTC health care organizations, retailers, financial services and media companies grow their businesses. A confluence of major external events — a change in consumer buying habits, big data coming into its own, advanced analytics and personalized consumer activation — is leading to a seismic shift in drivers of success in all industries. With the largest repository of purchase, media, social, causal and loyalty data, all integrated on an on-demand, cloud-based technology platform, IRI is empowering the personalization revolution, helping to guide its more than 5,000 clients around the world in their quests to remain relentlessly relevant, capture market share, connect with consumers, collaborate with key constituents and deliver market-leading growth. For more information, visit www.iriworldwide.com.

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Email: Shelley.Hughes@IRIworldwide.com
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