Chemi Katz is the CEO and cofounder of Namogoo, a digital journey continuity platform.
Each generation uses the internet differently. Generation Z may be the first to have grown up with high-speed internet access, but Generation Alpha is following hot on its heels, having been immersed in digital culture from an even earlier age. Their familiarity with the internet has also led to awareness of its pitfalls, resulting in new, more cautious behaviors. With spending power in the hands of these demographics ever increasing, e-commerce sellers would be wise to adapt.
Who Are Generations Z And Alpha?
Generation Z, or simply Gen Z, is the youngest generation with adult members (born between 1995 and 2010), whereas Generation Alpha, or Gen Alpha, is the youngest generation overall—the children of millennials and older Gen Zers. Gen Alpha has yet to enter the workplace, but it seems clear that they’ll continue the trends started by their predecessors, such as being technologically adept. Gen Z is the second most populous generation in the U.S., sitting at 69.5 million. They’re also the most highly educated, with 57% of 18- to 21-year-olds enrolled in a college.
Education equates to spending power—$360 million to be precise. Further research shows that Gen Z luxury spending is increasing three times faster than any other generation. Meanwhile, as the children of millennials, Gen Alpha has access to the spending power of the highest-earning generation.
How Do Their Expectations Differ From Previous Generations?
Having grown up in a world shaped by climate change and the aftermath of the Great Recession and in an era of fake news and post-truth, Gen Z and Gen Alpha have diverged markedly from their predecessors—and this is especially true of their online spending habits. Let’s take a look at exactly what makes them different.
Gen Z and Gen Alpha navigate digital environments with ease, immune to many traditional forms of online marketing because they’ve seen it all before. Dani Mariano, president of Razorfish, recently stated that Gen Alpha’s shrewd online behavior was causing businesses to “to market in new ways, on new channels, and to an elevated standard.”
Suspicious Of Brands
Gen Z and Gen Alpha are highly educated about brands, especially when it comes to the injustices they may carry out around the globe. For instance, only 42% of Gen Zers say they trust companies, and less than half believe business is having a positive effect on society. Meanwhile, according to Ed East, global CEO of Billion Dollar Boy, “Gen Alpha consumers will be discerning of brands who don’t reflect authentic human experiences and voices.”
Gen Z and Gen Alpha make purchasing decisions based on the alignment of a brand’s values with their own—specifically those relating to sustainability and diversity. For example, research shows that two-thirds of Gen Alphas only “want to buy from brands that have a positive impact on the world,” and 75% of Gen Zers prioritize sustainability over brand names.
How To Adapt To Changing Expectations
Given that Gen Z income is predicted “to increase fivefold by 2030” to form more than a quarter of all earnings worldwide, and Gen Alpha will stand 2 billion strong—the largest generation in history—by 2025, it’s vital for e-commerce sellers to learn how to meet their unique set of demands. Let’s examine how to do this.
Seek alternatives to invasive tracking methods.
Gen Z and Gen Alpha are hyper-aware of how data is used, and they won’t give up their own easily. Meanwhile, third-party cookies are soon set to disappear. Clearly, the writing on the wall says you should find less intrusive ways to learn about your customers.
Anonymous personalization allows you to use readily available information such as the device, referral source and location of your users to target them with tailored promotions. Unlike third-party data, this information is free, available from your own sites and won’t raise suspicions in your Gen Z and Gen Alpha users.
Launch privacy-first campaigns.
When the cookie is gone, the personalized advertisements they help generate will also vanish. This means that e-commerce sellers will need to rethink their marketing strategies. When it comes to privacy-conscious Gen Z and Gen Alpha, the more you can showcase your commitment to their privacy, the more effective these campaigns will be.
Using first-party data, you can build a highly detailed picture of your customer base. This will allow you to create ads to target your ideal customer, all while showing your Gen Z clientele that you’re handling their data with care.
Provide tailored experiences.
Although Gen Z and Gen Alpha may be wary of irresponsible data collection, it’s also important to remember that they grew up in a world of algorithm-curated playlists and personalized streaming suggestions. For instance, research shows that 41% of Gen Zers “will leave a website if it doesn’t predict what they like, want, or need.”
In short, the younger generations expect you to anticipate their desires without having to type them out. Fortunately, various AI solutions can trace and analyze user interactions with your web properties, allowing you to build detailed customer profiles. Using this data, you can predict their next moves, highlighting the range of products they’re most likely to buy or foregrounding bargains for more frugal customers.
The E-Commerce Generations
Gen Z and Gen Alpha are the first to have grown up in a world where most products and services are just a click away. Although their familiarity with the Web presents huge advantages to e-commerce sellers, it has also made them cautious and choosy. To tap into their increasing spending power, ensure that you use methods such as anonymous personalization, privacy-first campaigns and the tailored experiences they’ve come to expect.