Gen Z is now the largest generation with a spending power of $143 billion.
Last year, Gen Z became the largest generation, constituting 32 percent of the global population — or 2.47 billion of the 7.7 billion people on Earth — surpassing the millennials and Baby Boomers, respectively. In an age group that spans 7 to 22, Gen Z currently have a has a spending power of $143 billion.
That’s why it’s so important for retailers to understand what makes them tick.
But learning about Gen Z can be challenging. They are still in the process of growing up, with the oldest members in their young 20s, and as they grow, their needs and desires change. What’s important to them today may be very different than what’s important to them in the weeks, months and years to come.
Understanding Gen Z will be key to helping retailers achieve and maintain financial stability. So, how can retailers stay on top of Gen Z’s shifting consumer behavior and evolving needs?
The solution is ongoing persona discovery.
In the article, Discover Customer Personas, Don’t Build Them, Suman Mahalanabis, Director of Product Management, TCS Digital Software & Solutions, explains why traditional methods for building personas are no longer effective for understanding individual customers goals and intents and why ongoing persona discovery is so important.
The traditional approaches many retailers use today rely on qualitative methods to create personas through research and focus groups. These approaches provide incomplete and often inaccurate customer personas that can lead retailers to spending valuable time and resources marketing to customers who do not exist.
In the article, Mahalanabis describes how retailers can use persona discovery to extend qualitative personas with quantitative methods that use machine learning to relate to the specific beliefs and changing needs of individual customers.
Mahalanabis explains, “Advanced artificial intelligence can now blend behavioral and psychographic insights along with purchasing history, spending habits, in-store shopping activity, social media, and real-world interactions via smartphones and other Internet of Things (IoT) devices. When combined, it’s now possible to discover sophisticated personas that can help retailers meet individual customer needs as they arise. As the CTO of a leading retailer once said, “The customer’s intent right now is the pinnacle of personalization.”
Hidden in data, discovered personas offer more accurate ways for retailers to narrow in on customer likes and proclivities, and design personalized campaigns and shopping journeys to suit them. This is where having the right customer analytics software really matters.
Persona discovery requires a customer analytics solution that uses machine learning to sort through relevant data, discover constantly shifting shopping patterns and behavior and then test their reliability and validity.
Persona discovery helps retailers:
- Improve campaign targeting: Deliver the right message to the right person at the right time for improved campaign results.
- Keep shoppers on the path to purchase: Influence buying decisions at every step along the shopper journey for increased conversion rates.
- Increase shopping cart size: Deliver relevant offers through customer-preferred channels to increase customer wallet share and grow sales.
- Increase customer lifetime value: Deliver superior experiences that increase customer satisfaction and build enduring customer loyalty.
Once personas are discovered, the job is not over. As individual needs, desires and market conditions alter, personas should not remain static. Personas should be dynamic, shifting with societal conditions and be flexible enough to be updated on the fly in response to the latest internet meme.
Discovering personas will be key to modeling highly personalized and timely engagement campaigns for Gen Z, and all your customers, that drive growth, loyalty, and differentiation.