While boomers and millennials are two generations with their fair share of frugal consumers, Generation Z appears to be surpassing both as one of the more thrifty generations. This particular generation watched their parents weather the recessionary storm of 2008, so many have learned that it’s better to save money, share products and services rather than buy their own, focus on sustainability, and get the best deal possible.
Consumers Are Becoming Savvier
A Fox Business article noted just how smart consumers are becoming thanks to their ability to do more research before they buy. Regardless of background, income, or education, consumers share a common goal to get more for less.
The article pointed to Gen X and Gen Y who are looking at more used goods than ever before. The thrifting trend is starting to take off again, perhaps in light of more reports of an imminent recession. Many just view it as the smarter choice with how to handle money, especially after living through the last recession during 2008. That means more consumers are using a list and coupons in stores, as well as looking for sales and coupon codes online.
Pay Attention to the Shift
Retailers need to watch how consumers are buying throughout the month, and address how they might approach larger ticket purchases, too.
One of the biggest trends to return to retail is layaway. With layaway, you can allow these “forever frugal” consumers to make payments on large ticket purchases over a certain time period versus relying on a credit card that charges excessive interest. With the holidays just around the corner, this may be one approach to attract frugal shoppers to your retail location.
Branded Credit and Rebates
Target has offered another approach with its own branded credit and debit cards that provide a five percent rebate with all purchases made in store and online.
In addition to their regular promotions, high-quality product offering, and wide range of delivery options, this retailer hopes to appeal to the frugal shopper who also wants an exceptional experience.
Consumers desire personalized engagement with brands. Using your customer data, you can determine how to deliver personalized discounts and coupons. Send these out via email or as a text message to your customer base to entice them to shop and compare prices.
Transparency and Value
What’s different about Gen Z is that they don’t just want a good deal; they want a brand that is transparent in everything they do and offer. That means good ingredients, business practices, experience and service, and, of course, pricing. Besides an incredible sale, these consumers want brands to focus on diversity, inclusion, and practices that make the world a better place.
To address these demands with one of the largest groups of incoming consumers, a brand should find ways to partner with local sources and leverage technology to share more about how products are made. Tell these stories and illustrate good social practice through community and global involvement.
If you are a startup, then look for ways to leverage existing materials and incorporate recyclables into your product manufacturing. Even established companies may be able to take advantage of this to illustrate frugality in manufacturing, which can then be passed onto the consumer with a lower price point.
New Content Channels
While you will still need to deliver good prices, another approach is to reach out to these Gen Z consumers on other channels that you may not have previously used. For example, video games may not have come to mind but may be worth considering.
That means exploring how to interact on content channels like Twitch and YouTube and looking for product placement in games. In doing so, your content can deepen engagement with these consumers so that they see you as a valuable brand that represents a purpose they admire and delivers good value.
Meeting Frugal Expectations
Gen Z continues to become an important segment of the retail audience during the holidays and year-round, even if they are known for their frugality. However, other generational segments are also watching what they spend. Across all segments, it’s critical that retailers stay updated on the latest trends and expectations to combine value-based pricing with purpose, transparency, and convenience.