Event Recap: 7 Factors Driving Gen Z Brand Discovery
How will the consumers of the future discover the brands they love and buy? As a follow up to my recent Forbes article on the matter and Alpaca’s forthcoming Brand Discovery Report due out this month, we kicked off the year with a virtual panel digging into that very question with the help of the London-based The Digital Fairy. Specialists in Internet and Youth Culture, the creative agency’s team has worked with Nike, Sephora, Ariana Grande, Adidas, Estee Lauder, Topicals and many other leading brands.
Pro tip: their TikTok (@thedigifairy) is pure gold.
Our conversation surfaced a series of insights about the factors driving brand discovery as Gen Z comes of age. I am excited to share.
But first, why the big fuss about brand discovery? If you’ve been following Alpaca, you know we’re laser-focused on global commerce — at all points along the supply chain (extra credit: our five-part Field Study: Global Supply Chains shines light on where commerce stands today and the white space for opportunity we see ahead). But of all the challenges direct-to-consumer brands face today, brand discovery arguably looms the largest. The seemingly simple question of how to get in front of your customer has never been more complicated:
It’s more expensive than ever to advertise across channels.
At the same time, the quality of the reach is diminishing by the day.
Overall, channels are saturated and audiences are increasingly fragmented in their shopping behaviors and reactions to brand marketing tactics.
Along with these factors, generational nuances across Gen Z, Millennials and older consumer populations make cracking the brand discovery code an endeavor of nearly forensic proportions.
With this in mind, it’s not surprising that we’ve chosen to spend months talking to and surveying experts on how to maneuver these challenging times and conquer the mountain of brand discovery. This is a complicated conversation, especially for Gen Z — and the future.
While generational behavior is always nuanced, our panel of TDF strategists — Biz Sherbert, Karen Correia da Silva and Rachel Lee — distilled a number of factors and themes driving Gen Z behavior. For the full rundown, watch the roundtable event above. Below, you will find a recap of the key takeaways:
Nostalgia matters
“There’s several different factors affecting e- commerce brands and creating some new challenges. I think the first, when we’re thinking specifically about Gen Z, is this idea of the micro-trend cycle and how much it’s actually fed by nostalgia. There are a lot of cases of older brands winning brand affinity with Gen Z and brand love. It’s a lot harder to be a challenger brand now, as this idea of newness doesn’t necessarily equate to being better.” — Karen Correia da Silva
Household names that have been around for decades and more — think Pepperidge Farm’s Goldfish, Lexus, Suave, Ocean Spray and Gucci — are capturing the attention of Gen Z via TikTok with solid success.
Secondhand is a first choice
Gen Z consumers whole-heartedly embrace secondhand — both as consumers and resellers. Multiple factors are behind this behavior, says Correia da Silva. Along with being attuned to sustainability, Gen Z is an entrepreneurial generation well-aware of the opportunities that await in what The Digital Fairy’s Futures Team calls the informal economy. Sure, they still shop traditional retail in stores and online, but they’re also comfortable buying and selling through peer-to-peer platforms such as Depop.
Contradictions are common
One of Gen Z’s characteristics is its seemingly contradictory array of likes and dislikes. On the one hand, this is a generation known for embracing sustainability and conscious consumption, but it’s also obsessed with fast-fashion and sources of cheap products (hello, Shein and Wish).
“From things like new jobs to college to drinking to self-expression to new technology, they’re making their minds up about a lot of things. We really see this in the tensions that come up when we research this generation. You’ll see that they’re really interested in sobriety, but they’re also really interested in drug use. They contradict themselves, and they live at the intersection of a lot of conflicting forces,” explains Rachel Lee. She adds, “They love the past. They’re really analog-inspired. They’re now loving digital cameras and things like flip phones and burner phones, but they’re also chronically online, so these conflicts are really popping up.”
Virality is a game-changer
In recent years, viral content has shifted from an outlier occurrence to a regular phenomenon. For Gen Z, viral content plays a significant role in brand discovery. When a brand just happens to go viral for positive reasons, it can garner major favor with Gen Z consumers.
“We call this the Ocean Spray handbook. I’m sure most of you saw that, a viral video back in 2020 that involved a skateboard, a bottle of Ocean Spray and a lot of good vibes. Ocean Spray was able to leverage that into a whole new brand voice. It still has Gen Z in its comments today being like, ‘Oh my God, I love Ocean Spray so much.’ It was just really effective, even three years on. So we’ve seen initially that [virality] can open up this fruitful territory in brand discovery, but it can also be a bit of a challenge for brands when they try to reverse-engineer brand virality and try to create it on the other end of the funnel.” — Biz Sherbert
Gen Z has grown up being marketed to and is quick to pick up on advertising messages, the Futures Team warns. When brands try to create viral content, it can run the risk of falling flat. Because they can spot advertising a mile away, Gen Z typically react more favorably to brands that participate in the conversations they’re already having versus targeting them with obvious marketing messages.
Lo-Fi wins the day
Growing up in the shadow of Millennials, the generation that drove Insta-perfect profiles on social media and fell in love with ultra-slick brands like Glossier, Gen Z is decidedly low-fi and casual in its preferences.
Instead of airbrushed influencers and models who are free from flaws, this is a generation that appreciates brands that use real people in marketing. They also produce and consume social media content with less polished production and welcome old school analog technology with open arms.
Brand loyalty is not a priority
Gen Z is not revealing itself to form long-term loyalist relationships with brands as previous generations have. With information on just about anything immediately available, they operate with a sense of curiosity, as well as the knowledge that pretty much anything they want to find or want to know about is going to be available to them.
The Digital Fairy’s Rachel Lee explains: “They’ve been brought up on the internet, so they have just completely accepted that every type of information is accessible to them. They have a wide net approach on discovering brands and discovering products. They’re not brand loyal. They’ll just go for the vibe that they really like. And another thing is that the way they find information fits their own identity: they just focus on social media. They use TikTok to search up new places, not Google Maps. There was a stat recently from Google, that 40% of young people, if they want to look for a place for lunch, they’ll actually go on TikTok and not Google Maps or search. For them, social media is a hub for their self-exploration. They’re really curious, they’re really open to new brand aesthetics, new trends.”
They seek entertainment, education and easy access to information
In their interactions with brands, Gen Z doesn’t just want deals or promotions or exclusive products. They’re more likely to embrace brands that entertain and educate them while they’re being marketed to. At the same time, Gen Z shoppers are quick to notice when brands fail to provide ample information around their products and packaging. They want to feel like they’re receiving value from the brand and have easy access to all the information they want at the time of brand discovery.
Correia da Silva says brands get it wrong “when they still see brand and product marketing as a process of selling as opposed to a value exchange. Gen Z is just so marketing-savvy that they’re really going to be able to see through any sort of ploy. Gen Z are a lot more open to brands by virtue of being more educated about brands, which is really wonderful. So there is a really great opportunity for brands to not become cringe, but I think a lot of it has to do with really rethinking what brand marketing really needs to do.”
What’s Next
As Gen Z comes of age, brand discovery will no doubt continue to be challenging in novel ways yet also present new opportunities for e-commerce brands. And as e-commerce investors, we’ll be closely watching the space to identify the founders and companies building industry-changing solutions.
Our next stop on the brand discovery journey: our forthcoming Brand Discovery report, due out in the coming weeks. Be sure to subscribe to Alpaca’s newsletter and follow along on social — we’re excited to announce the report and share our findings with you soon.
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