Diploma (Conversion) in Marketing

Management with Digital Marketing (NVMMD)

BA8029 – Marketing Principles

CA3 – Application Report (Topic 2)

Submitted by:
Nur Hidayah Binte Azhar – P7394333

Submitted to:
Lim Xiu Ru

AY2020/21 Sem 1
4th August 2020
 Generation Z, or Gen Z, indicates the generation that was born between 1995
to 2009, following millennials. This generation has been raised with technology, the
internet and social media that they are often stereotyped as tech-addicted, anti-
social or “keyboard warriors”. They are different from earlier generations because
they are the first consumers to have grown up wholly in the digital era. According to
Euromonitor International (2020), Generation Z consumers who are born from 1995
to 2009, will make up the largest consumer segment by 2030. The rise of Generation
Z has set many brands to be on their feet to restructure their marketing strategies
since they will soon become the most pivotal generation to the future of retail as they
hold a spending power of $143 billion which accounts for about 40% of global
consumers this year (Davis, 2020). As one of the fastest-growing consumer markets
in the world, it has transformed the way brands communicate, connect and market to
them.

It is no surprise this newer generation refer to social media platforms when

looking to purchase products. Fontein (2019) mentioned that 85% of Generation Z
learns about new products through social media. They grew up watching channel
creators make incredible videos such as unboxing, reviews, first-impressions, which
makes them gravitate towards great video quality. However, younger internet users
tend not to favour traditional social media applications such as Facebook and
instead, jump onto the latest bandwagon. As such, technology companies have been
studying the demographics to meet the favours of the new generation and have
influenced the world’s marketer’s attention. An example would be TikTok, a young
and fast-growing short video platform where users can share videos of 15-60
seconds. Many of these videos range from dancing or lip-syncing to a short snippet
of audio. Users navigate the platform using their recommendations by appearing on
the “for you” page or via hashtags similar to other social platforms. This uprising
social media application has gained 1.5 billion users since 2017. Last year was
undoubtedly the year of TikTok as it gained 500 million users alone in 2019 and has
climbed up to the top 10 social media applications downloaded (Figure 1.0).
Furthermore, a social media report has shown significant growth on TikTok users
ranging from 16-24 years old that they currently make up to 41% as of 2019 which
makes Gen Z as the majority users on this platform (Iqbal, 2020).

The snowballing rise of TikTok has alerted marketers to grab an opportunity to

market their products on its platform as short videos will become a critical key in the
next social media field. With Gen Z having an average attention span of 8 seconds,
TikTok is an engaging platform for brands to direct market their products to a
younger target audience as part of the marketing communications mix. For example,
Decathlon Singapore has extended its digital presence by creating a TikTok account
to directly engage with targeted individual consumers and customer communities
(Figure 2.0). They use TikTok trends to create fun, creative content to feature
products and educate prospective customers on what they offer. Another promotion
strategy is by launching a hashtag challenge where users can create or recreate
content with an added brand hashtag to it. The brand Guess was one of the first
companies to initiate an interactive video campaign called the “#InMyDenim” hashtag
challenge last year. TikTok users in the United States were directed to Guess’
hashtag challenge as soon as they opened their app. Popular TikTok users posted
videos of their before and after transformation look featuring Guess apparel and fans
of these users can then replicate on their own. This has allowed Guess to reach a
new audience amongst Generation Z and millennials as videos with the tag have
garnered up over 38 million views since the launch. This promotion strategy helps
brands to increase engagement and awareness to the new audience due to the short
attention span of Gen Z. It has also proven to be a great way to produce user-
generated content which can obtain an immediate response and build lasting
customer relationships with Gen Z. Brands targeting Gen Z should increase focus on
content marketing through trending digital platforms where the majority of young
demographic present.

Besides, Generation Z expresses a strong desire for shopping experiences

that are uniquely their own. Gen Z values individualization enabling them to initialize
and customize their own singular shopping experiences. Promotions and
experiences that can cater to individual Gen Z’s specific needs and desires are more
important compared to personalized experiences shaped by the brand. McKinsey
and Company researched that “Generation Z is not only eager for more personalized
products but also willing to pay a premium for products that highlight their
individuality” (Francis and Hoefel, 2018). Another study conducted has also found
that Gen Z is motivated to share their opinions, collaborate and co-create with
brands. To approach this, companies can choose micro marketing as their market
targeting strategy. A prime example of a brand that adapted to Gen Z digital lifestyle
is Glossier, an online makeup and skincare brand founded by Emily Weiss. Glossier
set apart from its competitors by actively connecting with everyday people to create
products that the current generation wants. Their “Milk Jelly Cleanser”, was a by-
product of asking their first followers on what they wanted in a face wash. Glossier’s
demographics are women today that wants to look put together under 10 minutes.
To help women achieve this goal, Glossier positioned their brand to create products
that revolve around a “no makeup” makeup look, where skincare is a priority. As
such, Glossier has become one of the top beauty brands that Gen Z look forward to
engaging with. By tailoring products to consumers with unique needs, it develops a
sense of importance between customers and marketers and brings a personal
connection.

In-store experience can tie in with individualization as well. As much as Gen Z

interacts with e-commerce, they value in-store interactions with employees and
immersing themselves in their physical experiences. 78% of Gen Z choose to spend
money on experiences as opposed to buying tangible products (Morgan, 2015). As
an opportunity to merge marketing campaigns with in-store experiences, brick-and-
mortar brands can use their storefront to promote individual offerings via classes,
events and in-store specials. For example, Sephora, a well-known beauty retailer
that houses over 100 beauty brands has recently expanded its branch to Kuala
Lumpur. The Sephora at Fahrenheit88 Kuala Lumpur is the largest outlet in the
world-beating previous record-holders in New York and Paris (Cho, 2020). Also, this
new outlet serves Malaysia’s first exclusive beauty loft to Sephora gold members
(Figure 3.0). Perks include receiving hand massages while sipping to cups of coffee
and tea, and also a personal shopping service should the members require extra
assistance. To top it off, Sephora provides complimentary engraving service for
purchases as a little personal touch. Staying relevant to Gen Z means companies
must also capitalize on experiences to expand consumer engagement.

Marketing to Generation Z can also be exhausting whereby young customers

are demanding and want almost instantaneous answers. They expect brands to be
highly responsive to their needs and enquiries. A study on respondents who have
attempted to contact a brand, product or company through social media for customer
support shows 32% of them expect a response within 30 minutes (Figure 4.0).
Neglecting these demands will cause a flood of negative feedback. Younger
consumers are not afraid to voice out criticism to warn other consumers via social
media and review sites (Baer, 2017). As such, brands should aim to respond to all
complaints and questions through multiple digital channels in less than an hour. For
example, StashAway, a RoboAdvisor company that looks to market their investment
platform to Generation Z and millennials, boasted an 8-seconds average response
time for calls during office hours in 2019 (Yi Xuan, 2020). While these consumers
can engage brands through multiple digital mediums, it drives the need for
omnichannel support. Syncing a brand’s communication channels can allow both
customers and employees to work seamlessly. Generation Z being digital-savvy
prefers tools that can solve their problems immediately. Hence, brands should first
prioritize direct access to self-service tools and then mediums where they can better
support the customer if advance solutions are needed.

As Generation Z continues to rise, brands targeting them should pay close

attention to their needs and wants to stay relevant and competitive. Marketing to Gen
Z is a new ball game – hence companies need to look from a strategic perspective
and extract the interests, psychographics and media consumption habits that will
shape the future.

(1433 words)
References

Baer, J., 2017. 6 Rules For Meeting Millennial Customer Service Expectations.
[online] Entrepreneur. Available at:
<https://www.entrepreneur.com/article/300634> [Accessed 4 August 2020].
Cho, J., 2020. Sephora At Fahrenheit88 KL Has A Beauty Loft, 8 Exclusive Beauty
Brands, And Is The Largest Outlet In The World. [online] TheSmartLocal
Malaysia - Leading Travel and Lifestyle Portal. Available at:
<https://thesmartlocal.com/malaysia/sephora-kuala-lumpur/> [Accessed 4
August 2020].
Davis, D., 2020. Gen Zers Have A Spending Power Of Over $140 Billion, And It's
Driving The Frenzy Of Retailers And Brands Trying To Win Their Dollars.
[online] Business Insider. Available at: <https://www.businessinsider.com/retail-
courts-gen-z-spending-power-over-140-billion-2020-1> [Accessed 4 August
2020].
Euromonitor International., 2020. Market Research Blog | The Future Consumers of
Southeast Asia. [online] Euromonitor International. Available at:
<http://go.euromonitor.com/rs/805-KOK- 719/images/wpFutureConsumersSEA-
v0.1.pdf> [Accessed 4 August 2020].
Fontein, D., 2019. Generation Z: Everything Social Marketers Need To Know.
[online] Social Media Marketing & Management Dashboard. Available at:
<https://blog.hootsuite.com/generation-z-statistics-social-marketers/> [Accessed
4 August 2020].
Francis, T. and Hoefel, F., 2018. ‘True Gen’: Generation Z And Its Implications For
Companies. [online] McKinsey & Company. Available at:
<https://www.mckinsey.com/industries/consumer-packaged-goods/our-
insights/true-gen-generation-z-and-its-implications-for-companies> [Accessed 4
August 2020].
Iqbal, M., 2020. Tiktok Revenue And Usage Statistics (2020). [online] Business of
Apps. Available at: <https://www.businessofapps.com/data/tik-tok-statistics/>
[Accessed 4 August 2020].
Morgan, B., 2015. Nownership, No Problem: Why Millennials Value Experiences
Over Owning Things. [online] Forbes. Available at:
<https://www.forbes.com/sites/blakemorgan/2015/06/01/nownershipnoproblem-
nowners-millennials-value-experiences-over-ownership/#5252d0125406>
[Accessed 4 August 2020].
Yi Xuan, C., 2020. Stashaway 2020 Review: A Solid Robo-Advisor That You Can
Depend On. - No Money Lah. [online] No Money Lah. Available at:
<https://nomoneylah.com/2020/02/11/stashaway-review-2020/> [Accessed 4
August 2020].
Appendix

Figure 1.0 – TikTok Global Downloads by Quarter

Figure 2.0 – Decathlon Singapore TikTok Account

 Figure 3.0 – Sephora Fahrenheit88 KL Beauty Loft

Figure 4.0 – Responses on customer’s expectations for customer service