How Gen Z is Reshaping Brand Engagement: Retail & Travel

The members of Generation Z (Gen Z) are known for many things – the first true generation of “digital natives,” their work-life boundaries, socially conscious buying habits, love of TikTok, and entrepreneurial spirit, to name a few. And soon, as these individuals age into the workforce and have more income and control over today’s economy, they will also be known for driving disruption across industries like retail, travel, and marketing. A recent wave of research has explored what brands may expect across these industries and what Gen Z’s habits forecast for the future.  

Retail Shifts

During the pandemic, brand loyalty across all generations took a tailspin as buying preferences dramatically changed based on what sites had the best digital experience and could deliver goods in a timely matter. Instead of going to the same three stores in the mall, the majority of shopping moved online, offering an opportunity for window shopping at 100x the scale on a phone screen. And for Gen Z, who has always turned to the internet first, this shift only gave them more shopping options. Digitally savvy brands began to see their sales pick up, while well-known stores with clunky user interfaces began to struggle.  

Loyalty strategies are also no longer a nice-to-have, but a must-have to keep shoppers coming back. According to an Insider Intelligence report, 78% of US consumers say good loyalty programs influence purchasing decisions. We saw this extend to cross-brand partnerships that give consumers more options while still rewarding them for staying within their bubble.

Brands that could also associate their items with a specific intent of self-expression or pop culture icons are faring particularly well with younger generations. With Gen Z, the Crocs shoe brand is experiencing a revival. According to Morning Consult, “Crocs in and of itself out and about is sort of making a statement.” Crocs has been doing well by the numbers, with its namesake brand’s recent earnings showing revenue jumped 14.3% year over year to $715.7 million.

Transforming Travel & Hospitality

Beyond their shopping habits, Gen Z is also beginning to have disposable income for travel and is doing so frequently. According to the Morning Consult, 52% of Gen Z adults are already frequent travelers (3+ leisure trips per year!), on par with travel-happy millennials – and will likely outpace all other generations in their frequency of travel as their income increases.  

But unlike earlier generations, Gen Z isn’t saving up for a big splurge trip. They’re now looking to fit travel into their budgets and lifestyles through low-cost, accessible, and streamlined travel experiences. They also have less trust in the travel industry as a whole, offering an opportunity for travel brands to start building relationships with Gen Zers today that will benefit them as travel increases.  

Also, unlike other generations, Gen Z isn’t just looking to travel to relax or getaway, but instead wants to experience adventure or improve their mental health. In the coming years, we can expect to see this play out in where Gen Zers are choosing to travel, as they want to visit new locations instead of the same places time after time. It’s no surprise that AirBNB is one of Gen Z’s favorite brands – both due to its flexibility and use of user-generated content to depict authentic travel experiences. Stay tuned for what this means for both travel brands and the travel economy – could personally-owned vacation homes be on the decline in favor of more flexible destinations?  

Manipulating the Marketing Engine

Across both retail and travel industries comes the need to reach the growing Gen Z spender, and marketers are being kept on their toes. Influencer marketing is having its moment, driven largely by Gen Z’s desire for authentic brand experiences and content. With the rise of social media platforms like TikTok and Gas, and features like Reels on Instagram, there is an increasing opportunity for user-generated content to go viral. This shift is combined with an all-time-low tolerance for traditional ads or commercials, which is largely due to younger generations accessing nearly all their content on demand (instead of, say, through cable television with endless “as seen on TV” ads). Gen Z loses active attention for ads after just 1.3 seconds—less time than any other age group – which means brands have to hook them quickly to avoid being swiped away.  

Some of the most popular brand posts currently have nothing to do with the actual product, but instead take advantage of viral trends, pop culture moments, and demonstrate there are real people behind the company looking to reach their audiences. To compete in the eyes of Gen Z, brands will need to be more agile in their strategy and content.  

‍

Staying on the Screen

Across these markets, it’s clear that traditional ways of marketing or advertising aren’t going to cut it when it comes to influencing the spending behaviors of the post-millennial. Brands should be prepared to have robust analytics on the back end to track how various campaigns and approaches are performing in real time, and pivot accordingly.  Ensure creative teams are also weighing in, as new concepts will need to be generated quickly based on the latest viral trends or media moments.  

Marketing teams must also work closely with leadership to ensure everyone is on board with new approaches and concepts – and action can be taken quickly. Crocs, AirBNB, and veteran brands like Nike are experiencing a revival due to their unique and quick thinking to reach Gen Z. Gone are the days of taking three months to approve a social media campaign. Gen Z will already be on their next trip by then, so good luck catching up.  

‍