Dive Brief:

• Gen Z is eager to interact with their favorite brands — 44% of the young generation say they’d be interested in submitting ideas for product designs, 42% would participate in an online game for a brand campaign, 38% would attend an event sponsored by a brand and 36% would create digital content for a brand, according to a recent study by the IBM Institute of Business Value and the National Retail Federation.

• However, the brands Gen Z chooses to interact with are chosen selectively: 62% of Gen Zers are frequently attracted to new and fun brands, 55% choose brands that are eco-friendly and socially responsible and 53% select brands that understand them as an individual. Comparatively, only 45% choose brands endorsed by celebrities and athletes, according to the study.

• That being said, members of the up-and-coming generation are not afraid to hold brands accountable: 60% say it's important for brands to value their opinions, 55% of the generation express a desire to maintain control over the information they give to brands and 54% want to decide how brands contact them, the study found.

Dive Insight:

The newest consumer generation has captivated the attention of researchers and retailers alike, with brands eager to understand how to reach out to the generation slowly coming of age.

According to the “Gen Z brand relationships” study, the way to reach the young generation is through more opportunities for brand engagement and a transparent relationship with their customers. Gen Zers feel strongly about issues like sustainability and are making their brand loyalty decisions based off of it.

A strong brand message that identifies itself with a cause will do well with the younger generation. Patagonia, for example, donated 100% of its profits to grassroots environmentalist efforts last Black Friday and closed its stores on Election Day to encourage its employees to vote. These bold brand statements attracted shoppers who resonated with the concepts and most likely isolated some who didn’t. Similar stunts have also worked to great success for retailers like REI, who used its #OptOutside campaign as a reason to stay shuttered on Black Friday last year and garnered a huge reaction from fans of the retailer on social media who praised its decision to stay closed.

The ability to connect with Gen Z on a more personal level has the added benefit of drawing in a consumer base that is willing to pay extra for luxury brands — a shift from their millennial counterparts who prefer discounters —and, per the study, a base that is eager to interact with brands outside of the storefront.

Retailers looking to build relationships with the young generation would do well to reach them on mobile and social media, as the generation converts twice as much as any other generation on mobile and the majority (80%) are influenced by social media when making purchase decisions.