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Dive Brief:

  • Generation Z is considered the most educated group of teens on the topics of health and wellness, but they are not letting related concerns impact their food and beverage choices yet, according to a new Hartman Group study.
  • Most Gen Zers do much of their own food prep, and are comfortable in the kitchen, the study said. They tend to see cooking as an easily accessible life skill for anyone with an internet connection.
  • The generation is the most diverse and connected in U.S. history, and this is expected to have a major impact on their food and lifestyle choices, the study says. This generation is defined in the study as people currently between ages 12 and 20.

Dive Insight:

Millennials are a major disruptor of the retail industry and experts are wondering if Generation Z will follow in their footsteps or create a path of their own. Known to be the most diverse, independent, politically and socially aware set of consumers, Gen Z is expected to demand even more from retailers and brands.

With the oldest members of Generation Z just entering their 20s and the youngest being 12, most are still relying on their parents to purchase their groceries. Their shopping and eating habits may be more reflective of teenagers in general than their specific generation. Generation Z grew up with parents who instilled healthy eating at a young age and classrooms that emphasized the importance of wellness. They grew up to expect brands to provide more than just clean foods.

Gen Z sees food as a form of self-expression. They are looking for brands that connect with them on a personal level, and big brands may have a hard time offering that as easily as smaller brands. That’s why small brands that value authenticity tend to do better with this generation.

Although this generation currently doesn’t do household shopping, members know their way around the kitchen. With busy parents, Gen Zers cook for themselves and eat alone for most meals. Although this sounds like a tough task, technology has made it more accessible. None have lived in a world without wireless internet and mobile phones and they tend to be connected to food through their phones. Clickable recipes could be a winner for this generation. Even though they are comfortable in the kitchen, Gen Zers may not use many of the tools there. Another study by the NPD group says that 58% of the meals they make don’t use any appliances — so it’s not surprising they may prefer snacking over meals.

With the rise of better-for-you snacks and beverages, Gen Zers prefer plant-based beef alternatives, ramen, yogurt, sparkling water like LaCroix and frozen ethnic foods. The study says they are most likely to shop in convenience stores and use vending machines. To respond to these demands, retailers like Walmart have opened c-stores, and grocers like Hy-Vee have opened small-scale stores that offer healthy options.

So far, Gen Zers don’t have as much brand loyalty as previous generations — which could lead to the demise of loyalty programs that are so important to millennials. Like millennials, however, Gen Zers prioritize fast and frictionless transactions.

Retailers are working on perfecting their same-day delivery, curbside pickup, and mobile checkout options before this generation flood grocery stores. Kroger recently announced it is piloting its automated grocery pickup in Arizona and Walmart has partnered with Waymo to test autonomous vehicle service as well. Many grocers now offer curbside pickup but most recently, Aldi, Whole Foods, and Publix have added this to their portfolio. And Walmart is testing an automated grocery pickup kiosk to make shopping easier and ultra-convenient.

As an up-and-coming generation, Gen Zers are the focus of several consumer studies — and not all of them have the same conclusions. An NPD Group study found Gen Zers prefer shopping in brick-and-mortar stores because they value the hands-on experience. However, work can be done on both the digital and physical store. If grocers work on perfecting the digital experience, it could drive the techy Gen Z group to sites, apps and stores.

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  • We already know Facebook is losing among Generation Z, the generation after millennials that prefers Snapchat and Instagram.
  • Marketing and retail experts pinpointed six other sectors and businesses that are likely to struggle once these teens come of age.
  • “Generally, members of Generation Z are tech-savvy, pragmatic, open-minded, individualistic — but also socially responsible,” An Hodgson, an income and expenditure manager at Euromonitor International, told Business Insider. 

Ishan Goel, a 19-year-old marketing strategist with the Mark Cuban Companies, said it was “not cool” for his fellow Gen Zers to be on Facebook. For today’s teens, Facebook is just a tool for group chats or keeping up with parents.

“People aren’t wanting to post stuff consistently,” Goel told Business Insider.

People in Generation Z were born between roughly 1995 and 2010. This cohort of current teens is on track to kill Facebook, Business Insider’s Mark Abadi reported earlier this year.

Only 9% of teens say Facebook is their preferred social-media platform, a survey from Piper Jaffray found last year. Gen Z prefers Snapchat and Instagram, while older millennials are the biggest chunk of Facebook’s users.

“Generally, members of Generation Z are tech-savvy, pragmatic, open-minded, individualistic — but also socially responsible,” An Hodgson, an income and expenditure manager at Euromonitor International, told Business Insider.

Hodgson added: “Because Gen Zers are individualistic and value their privacy, they prefer anonymous social media like Snapchat, Secret, and Whisper rather than Facebook.”

Millennials are said to have already killed bar soap, diamonds, and napkins. Here’s what’s on Gen Z’s hit list.

 

Ralph Lauren, Sperry, and other preppy brands

Ralph Lauren, Sperry, and other preppy brands

Richard Drew/AP

Refined-classic brands, like Ralph Lauren and Vineyards Vines, are at record low popularity in the teen market, according to Piper Jaffray, moving to a 5% market share among teens from an average of 14%.

Ralph Lauren is taking one of the biggest hits, Piper Jaffray found. It was in the top 10 brands for men since 2002 but lost its standing this year. Filling the gap are streetwear brands like Adidas, Vans, and Supreme.

Department stores

Department stores

LM Otero/AP

Bobby Calise, the director of business development at the youth-insights firm Ypulse, told Business Insider that JCPenney and Macy’s had high brand awareness among Gen Zers but that they were more likely to shop at Forever 21, American Eagle, and other youth-centric fashion brands.

“The data is clear on one thing: Neither brand is cool in the eyes of Gen Z — and cool is a pretty important form of currency if you’re in the business of selling clothes to teenagers,” Calise said.

Goel said Gen Z perceived stores like JCPenney, Sears, and Kmart as lacking quality and a voice.

“When was the last time you bragged about shopping at JCPenney?” Goel said.

Gen Zers prefer to order online from companies with strong digital branding, said Tiffany Zhong, CEO of the youth-marketing firm Zebra Intelligence. And many know how to find manufacturers online, where they can buy products directly at a lower cost.

Cable TV

Cable TV

Pete Souza/White House Photo via Getty Images

“No one watches cable TV anymore,” Goel said.

More than 60% of teens said they would rather watch 10 hours of videos on YouTube than 10 hours of television, a 2017 survey by AwesomenessTV found.

Gen Zers surveyed said online videos were best for learning or laughing, while they preferred cable TV for watching with family or keeping up with what’s going on in the world.

Perhaps most revealing: One-third of surveyed teens felt that cable TV was best for falling asleep.

Pandora

Almost 10% of millennials say they pay for Pandora, compared with just 6% of Gen Zers, a study by the consulting firm Fluent found. Generation Z, more than any other generation, prefers subscribing to Apple Music, Spotify, and YouTube Red.

Traditional luxury goods

“Growing up during the global financial crisis, Gen Zers are realistic and mindful of financial issues and future career from a younger age,” Hodgson told Business Insider.

Gen Zers are more likely to opt for trends they can show off on social media, but not necessarily ones that are the most expensive.

The fashion trends that AwesomenessTV highlighted in its report tended to be ones that pop on social media, like space buns, pins and T-shirts with political sentiments, and sparkly makeup.

As Business Insider’s Mallory Schlossberg wrote in 2016, “Luxury items — the kind that you can ‘wear forever’ — do not serve as much of a purpose on social media.”

Feature Image: Preppy brands and cable TV are out.Strelka Institute for Media, Architecture and Design/Flickr/Attribution

Sourced from BUSINESS INSIDER UK