Generation Next Thinking: How grocers can get a handle on gen Z
Generation Z now makes up one-fifth of Canada’s population and are turning out to be a major retail force with more buying power than their millennial predecessors. According to a U.S. report from Gen Z Planet, a research and advisory firm focused on this cohort, gen Z spending power in the United States reached US$360 billion in 2021, generated from full- or part-time work, parental support or side hustles. To earn their loyalty for the long-term, industry analysts say grocers need to know how to engage with this digitally savvy money-minded and diverse group, as both shoppers and employees.
“There really are some unique differences with this group,” says Jo-Ann McArthur, president and founding partner of Nourish Food Marketing in Toronto, noting that gen Zs include those born between 1997 and 2008 (some definitions include those born up to 2012). One difference she points to is that this group has particularly high levels of “eco anxiety,” with 72% expressing some concern about how climate change will affect them, according to the Nourish Network 2022 Trend Report, produced by Nourish Food Marketing. Plus, they’re coming of age during a global pandemic, which McArthur says will affect the way they view science and its impact on food. “They don’t think GMOs or additives are as unhealthy as other groups,” she says. In fact, according to the Nourish report, generation Z sees science as a necessary way to save the planet and are the most willing of all generations to try food produced using technology.
Values-based shopping habits
With shopping habits, McArthur says a brand’s values are top of mind for this generation. “We know that social responsibility was a priority with millennials but with this group it’s an expectation, and they’ll call you out if you’re inauthentic,” she says. As a result, it’s important for retailers to carry brands that are value-based and to launch initiatives themselves to prove they’re thinking about sustainability and future impact, too. “Rather than market to me, it’s matter to me for this generation,” she says.
As true digital natives, generation Z will go online to discover and research future purchases, but will still turn to traditional brick-and-mortar stores more often than millennials or gen-Xers to buy them. According to ongoing research on this generation from global management consulting firm Kearney, this is because they view retail as a way to get into an environment where service is important and options are curated for them.
Shelley Balanko, senior vice-president of business development at The Hartman Group, says mid-pandemic Food Sourcing in America data showed this group was making 2.5 in-person shopping trips a week, compared to millennials at 1.9 and gen-Xers at 1.5. “But more than anything, what we’ve seen is that gen Zs are even more comfortable in this reimagined world of being able to shop anywhere and they’re going to have more expectations [than previous generations] for an omnichannel experience where everything is integrated,” she explains. “What you’re providing in the store should mirror what you’re providing them online.”
Thanks to the pandemic, Balanko says this cohort is also much more savvy when it comes to health and wellness. “They think very holistically about it, in particular in the integration of mental health and how food and beverage are part of that.”
Considered big snackers, Balanko notes that gen-Z shoppers view snacking as a much more culturally acceptable way to eat compared to previous generations. “For this younger set, anything could be [a] snack so they don’t necessarily have granola bars top of mind,” she says. Hartman’s latest research also shows this group is more inclined to experiment with foods, with 67% saying they love to try new foods and cuisines. Having grown up with diverse cuisine options, gen Zs take for granted that global foods and ingredients are on the menu, expecting even “familiar” and “comfort” foods to be part of this.
In making the grocery store more appealing to gen Zs, Balanko says retailers need to recognize that this cohort is more fluid around their identity. “Think about gender stereotypes in signage and in-store communications,” she says. “A poster with a white nuclear family, two kids and a dog may not speak to them.”
According to the latest report on Marketing to Gen Z released by Nashville, Tenn.-based CM Group (February 2022), this cohort may be the most ad-averse generation, but they are the most receptive to value-oriented messaging and tactics. They’re also more likely than millennials to seek out recommendations from influencers they trust and have a higher preference for interacting via social media.
Gen Zs can make valuable employees
As well as being engaged shoppers, grocers are finding gen Zs can make highly valuable employees once they’re engaged in their work. More than a third of the staff at Save-On-Foods is made up of gen Zs, and “we’re thrilled to have them,” says Heidi Ferriman, the grocer’s senior vice-president, people and corporate affairs. “Our gen-Z team members are our emerging leaders, and we are fully embracing the opportunity to showcase the grocery business as a career path for them.”
Given that this generation of employees is looking for a more personalized workplace experience, Ferriman says her company has made concerted efforts to provide leadership development specialists that are dedicated to helping gen Zs along their career path. “In addition to ongoing opportunities for mentorship and coaching with senior leaders, as part of our ongoing effort to support the growth and development of this generation we have built a robust online learning management system to support [their] individual growth,” she says. “We also offer education reimbursement, including sponsorship for master’s degrees.”
At Longo’s, where gen Zs make up 44% of the workforce, learning is extremely important to this group of employees, says Liz Volk, chief human resources officer. “They are very open to cross-training and learning new skills across our stores,” she says. Longo’s uses a digital platform for staff that houses company information and opportunities for learning in “bite-sized pieces” on a daily basis. “It’s also got some gamification in there because [gen Zs] love to compete and it’s a way to pull them into daily learning.”
Volk says Longo’s is also developing more bite-sized learning and training information in video format. “This is an audience that we know lives on YouTube and takes in information this way,” she says, noting that the communication style for gen Zs has proved appealing across all Longo’s staff. “It tends to be that this group might lead the way, but then you’ll find that others get on board because they see the value of it.”
A common myth about this generation is that they don’t know how to communicate because of their reliance on technology, but Volks says the opposite is true. “A lot of them are excellent communicators and wouldn’t be on our front line if they couldn’t communicate,” she says.
At Toronto’s Summerhill Market, co-owner Christy McMullen, says she’s noticed that gen-Z employees appreciate regular meetings more than previous generations. “It has to be a more collaborative approach to communication and not authoritarian either,” she says. “They’re very bright, but they need reassurance and feedback on their work on a regular basis.”
McMullen says it’s important for gen Zs to know they’re part of something bigger than just “a job.” The latest research from Deloitte’s global 2022 Gen Z and Millennial Survey confirms this idea. According to the report, almost two in five gen Zs say they have rejected a job because it didn’t align with their values (35% reported they would even leave a job without another one lined up). On the flip side, those satisfied with their employers’ societal and environmental impact – and their efforts to provide a diverse and inclusive culture – say they are more likely to want to stay with their employer for more than five years
In her experience, McMullen says gen-Z employees want to know you have good recycling policies in place at the store level, as well as other initiatives underway geared to the environmental issues they care about. “We also have a social committee for the first time at our store as these are the kinds of things they get excited about,” she says. “We do a big carnival every year and it’s always well-attended by this generation.”
Grocers and industry analysts also agree that technology will always be a big focus of the gen Z way of shopping and working – and grocers need to keep on evolving accordingly. Save-On-Foods’ Ferriman says there have been a large number of retailers, such as Sears and Blockbuster, who have failed to adapt to the digital revolution by not fully understanding the importance of the online space to consumers today.
“Throughout the pandemic, more Canadians adopted the ‘digital lifestyle’ and as retailers it’s our responsibility to ensure we meet the digital expectations of our customers and especially this generation [of gen Zs],” says Ferriman. “We know we need to use digital to captivate their attention, whether through our marketing campaigns, our recruitment efforts or simply the way we represent Save-On-Foods on our social media platforms.”
This article was first featured in Canadian Grocer’s September/October issue.
