Establishing Credibility with Next-Gen Consumers

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Trust is paramount when selling to a generation that lists “shared values” above all other brand attributes but price. However, establishing trust with next-gens is no longer a simple proposition. A strong “About Us” page and mission statement won’t cut it anymore. Not when next-gens monitor every aspect of a retail business –– from a product’s source materials, to the warehouse in which it was made, to how employees are compensated on the front end.

Establishing trust with young consumers isn’t an impossible feat, it just takes a lot more effort than their predecessors. Let’s take a look at how some of the trends hastened by coronavirus have made next-gens even more discerning and what modern retailers need to do to check all of the boxes.

What Cancel Culture Means for Brands

Cancel culture is a harsh reality of present-day retail. Whether you believe that cancel culture is an important tool in the fight for social justice, or a dangerous threat to free speech, the truth remains that it can push brands that don’t play their cards right into obscurity faster than you can say “J.K. Rowling.”

To understand cancel culture as it relates to retail, you must first grasp that next-gen purchasing behavior is social-consciousness driven. The Edelman Trust Barometer reports that 80 percent of consumers want brands to “solve society’s problems.” But that’s not all: a 2019 study by Ad Age found that 69 percent of Gen Z are more likely to buy from a company that contributes to social causes, and 33 percent have stopped buying from a company that contributes to a cause that they find disagreeable.

[callout]Of the many brands and retailers that posted messages in support of the Black Lives Matter Movement, few of the companies that did so had boards or corporate branches that reflected this professed support.[/callout]

This is where cancel culture comes into play for retailers. Next-gens quickly realized that a brand’s professed values don’t always align with its operations ­­–– they’re not only willing to do the research to identify which companies practice what they preach, they’re willing to call out those that don’t on social media. For instance, while many brands and retailers posted messages in support of the Black Lives Matter Movement, few of the companies that did so had boards or corporate branches that reflected this professed support.

And customers just weren’t buying it: Statista found that a whopping 65 percent of consumers thought brands were releasing pro-BLM statements just to retain their existing customers, while only 15 percent believed that these brands genuinely supported BLM.

A similar phenomenon exists in the sustainability sphere, which Patagonia refers to as “greenwashing:”

“Greenwashing might not sound dangerous, but in fact overselling the environmental benefits of fashion doesn’t just confuse consumers—there’s evidence it can sow mistrust and might even slow down environmental progress. A recent survey of British consumers showed that only a fifth of shoppers believe the sustainability claims made by brands.”

Set Goals and Outline the Steps to Achieve Them

In a mid-pandemic Deloitte survey, millennials and Gen Z said they will prioritize supporting small businesses after the dust settles. But they won’t hesitate to penalize companies whose practices conflict with their values. No brand is immune to the scrutiny. So, what can brands and retailers do to prevent being called out? And what can brand leaders do if their business’s sustainability claims, corporate diversity, or manufacturing processes are called into question?

The answer to this is best demonstrated by Adidas, one of Gen Z’s Top 10 favorite brands. Adidas was called out for woke-washing in June, when employees staged a protest and posted online about their experiences of racism in the workplace. While such allegations undoubtedly bear further looking into for ethical reasons, they also have the potential to result in mass boycotts –– which force a once revered brand into relative obscurity. (Here’s lookin’ at you, Gap.)

It’s what Adidas did once they were called out, however, that’s the real differentiator. The brand committed to investing $120 million to empowering Black and LatinX communities in the U.S. through 2025. Investments include a Committee to Accelerate Inclusion & Equality to hold the brand accountable to diversity benchmarks, such as a scholarship/debt relief program for minority students, an initiative to cultivate minority-own sportswear businesses, large investments in social justice programs and nonprofit schools, and more.

When called out for exclusionary brand practices, Adidas admitted that they aren’t where they need to be in terms of diversity and inclusion. The brand created a committee, the U.S. United Against Racism Accountability Council, to ensure diversity targets are being achieved. They also provided the public with a timeline and plan-of-action to hit diversity benchmarks.

Adidas essentially said, “We aren’t where we want to be, but here’s how and when we will get there.” It’s a shining example of how brands can use callout culture to their benefit –– making necessary improvements, building consumer trust, and becoming a more transparent operation.

The Busiest Platform Isn’t Always the Best Option

Everyone knows that social media is a great place to connect with next-gen consumers. But many retailers are still trying to connect with consumers on the wrong platforms. You can’t just funnel ad dollars where the traffic is to see ROI. NRF recently found that the channels next-gens use to connect with brands aren’t always the ones they use the most often.

Take Snapchat, for instance. While 82 percent of Gen Z consumers have Snapchat, it’s mostly used as a social platform to connect with friends and relatives… only seven percent of Gen Z uses Snapchat to connect with brands. Only 31 percent of TikTok users utilize the platform to follow or interact with brands. And of the 82 percent of next-gens on YouTube, only 26 percent are there to interface with retailers.

Instagram is the place where Gen Z goes to get to know the brands they may patronize. However, this isn’t always true for older millennials or different sub-sets of the Gen Z demographic. U.S. retailers spend billions of dollars each year in ad revenue. In light of this, it’s shocking to see how many retailers are unwilling to spend a few hundred on rudimentary data about to inform their ad campaigns.

Understanding is the first tenet of building trust. The second is creating a plan of action. Then communicate, act on proposed initiatives, wash rinse and repeat. But understand this: establishing trust in today’s retail environment needs to be a continual, oft revisited brand priority. It’s not just Santa Clause that’s making a list and checking it twice this season –– next gen consumers are have their own Naughty and Nice List of brands.

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