With credit-card skimming thieves eluding law enforcement, state lawmakers are targeting the devices themselves.
Two bills before the Florida Legislature this session, SB 766 and HB 343, would make it a third-degree felony to possess or sell credit-card skimming devices in Florida.
“These devices are designed to specifically collect and steal consumer data,” said the sponsor of the Senate bill, state Sen. Jose Rodriguez, D-Miami. “There is no other place in the market where you need a device like this.”
Rodriguez said Thursday much of the work behind the legislation was focused on tightening the definition of the skimmer itself so it would not impede the needs of retailers and anyone else involved in credit-card transactions.
“There are two parts to this legislation,” he said. “Part of it is to precisely and better define what is legal and what is illegal. The other part is criminalizing the sale of and use. There is no legitimate need for these skimming devices.”
He added that cracking down on the installing and use of the skimmers to steal credit-card information from gasoline pump machines and ATMs, which is illegal, is difficult because police have to catch the thieves in the act.
By making the possession and sale of the devices illegal, he said police would have a more effective tool. Both the Senate and House versions have one more committee hurdles to clear, perhaps as soon as next week, before they can make it to floor votes in each chamber.
The 2017 Florida legislative session marks the second year in a row that lawmakers have sought legislation to attack credit-card skimming.
Just this past spring, Gov. Rick Scott signed into law a bill designed to protect consumers from skimmers at gas station pumps.
That legislation, sponsored by State Sen. Anitere Flores, R-Miami, and Rep. Dana Young, R-Tampa, required gas stations to have security devices on pumps to combat skimmers and it toughened penalties for credit-card fraud.
It was also supported by Florida Agriculture Commissioner Adam Putnam, whose agency has largely led the effort to crack down on skimmers.
James Miller of the Florida Retail Federation and the Florida Petroleum Marketers and Convenience Store Association said the organizations “fully support any legislation that cracks down on gas-pump skimming devices, punishes those caught using them, and protects Floridians and visitors.”
Miller said card skimming is a nationwide problem, but Florida, with the third-largest population and more than 100 million tourists, and more than 10,000 convenience stores statewide, presents significantly more opportunities for skimming devices to be used.
He said the organization seeks other ways to combat skimming fraud. This includes training sessions for convenience store owners and their staff year round throughout the state to help them identify potential scams, and arm their employees with knowledge and steps they can take to protect their store, their merchandise and their customers.
They also regularly communicate with local, state and federal law enforcement “on tips and identifying new technology or new ways that thieves are using skimmers,” he added.
Jeff Lenard, the vice president for Strategic Industry Initiatives at the National Association of Convenience Stores in Alexandria, Va., said the organization focuses on federal issues so it has not specifically followed the new Florida legislation.
However, he pointed out skimming tends to a be a problem because criminal groups come to an area and “work it” until they move on to another location. Florida, he said, is one of the areas that has more problems, perhaps because there is more of a transient population and newer neighborhoods.
How to avoid falling victim to a skimmer, and what to do if you do
If you think your credit card number might have been stolen or otherwise compromised, report it to your credit card company.
If you believe you might have found a skimmer, contact the gas station manager, local law enforcement or the department’s consumer protection and information hotline at 800-435-7352.
mypalmbeachpost | Antonio Fins and Susan Salisbury
Organized retail crime (ORC)—defined as professional shoplifting by organized crime rings—is growing, with 83% of 59 merchants surveyed reporting an increase in the past year, according the National Retail Federation’s “12th annual ORC study,” conducted July 20-Aug. 19, 2016.
Sean Sportun, ICPS manager, security & loss prevention for Mac’s Convenience Stores in Canada, noted ORC is an evolving issue for the c-store industry.
While ORC usually targets big box chains with high volume items “what most fail to realize is the c-store/gas industry are the initial target for these groups when it comes to fraud payment cards and robberies,” Sportun said. “C-store retailers must ensure they have a training program in place and that it is current—this will enable employees to combat these crimes and remain safe if they encounter an incident.”
Mac’s is renowned for fighting crime, from inviting communities to take ownership of neighborhood convenience stores by participating in painting a store mural to posting images of thieves to Mac’s Crime Stoppers social media pages, so members of the community can identify them for a reward.
“Mac’s is now being studied by Harvard University on the crime prevention program’s effectiveness in reducing incidents of crime,” Sportun said. The Harvard Business Study should be available this summer.
Mac’s is also using a Tobacco Tracker program to monitor stolen tobacco cartons—a “huge success,” both in the recovery of assets and in the apprehensions of suspects. Security expert Chris McGoey, president of McGoey Security Consulting, said while ORC is an age-old issue, the label is often overused, especially in relation to convenience stores.
“What’s happening (at c-stores) is plain old shoplifting. It’s the same old story: if you have one person on duty and that person is overworked, they’re not going to be able to pay attention to potential shoplifters,” he said.
McGoey said he sees theft overall trending upward. There are more items today, more inventory issues to contend with and products are more expensive—which means theft dollar totals are higher—all contributing factors.
C-stores must also contend with employee theft. The “28th Annual Retail Theft Survey” conducted June 2016 by loss prevention consulting firm Jack L. Hayes International, found one out of every 38 employees was apprehended for theft from their employer in 2015. The survey was based on approximately 3 million employees.
“The convenience industry is hit particularly hard with employee theft because of the nature of a c-store. They’re designed to be operated by one person often times without supervision,” McGoey said.
Mac’s is using technology to help matters.
“The loss prevention department implemented a variety of preventative measures to identify this type of crime, but our most effective initiative has been the introduction of our 24/7 monitoring room, which has the ability to remote access into stores through the DVR system,” Sportun said.
While ongoing advancements in video surveillance ability and quality continue to improve, McGoey warned some retailers invest too much capital in technology and then fail to use it, thinking just having the technology is a deterrent. McGoey said sticking to the basics of counting inventory, implementing cash controls, hiring and training well and monitoring customers are crucial in preventing theft. (read more)
Within 10 years, online food shopping will reach maturity
Within a decade, in the current climate of technology adoption and evolution, consumer spend on online grocery shopping could reach $100 billion, or the equivalent of 3,900 grocery stores based on store volume.
That’s the conclusion of new research being released by the Food Marketing Institute and Nielsen, which offered a preview of their “Digitally Engaged Food Shopper” analysis Saturday at the FMI Midwinter Conference in Scottsdale, Ariz.
The findings were discussed by a panel that included Dave Bornmann, SVP of business development at Publix Super Markets; Benno Dorer, chairman and CEO of the Clorox Co.; Chris Morley, president of Nielsen USA; and Tom Furphy, CEO of Replenium. The discussion was moderated by Thom Blischok, chairman and CEO of The Dialogic Group.
The group stressed a need for greater collaboration between retailers and CPG suppliers, who need to operate “like one integrated company,” declared Mark Baum, FMI chief collaboration officer and discussion panelist. Success will come to those who collaborate effectively, embrace automation, understand consumers better and use the new research as a call to action, panel members said.
The introductory set of insights from this joint, multi-year initiative offer a comprehensive look into the behaviors, motivations and expectations of the digitally engaged food shopper. This first perspective offers recommendations on how food marketers and manufacturers should be preparing their strategies and managing the organizational change that will be required to engage those shoppers.
“While we are more connected than ever to influence what shoppers buy, the window to influence those moments is narrowing,” Baum said. “FMI and its members will need to seize the opportunity to harness new skills and collaborate more seamlessly than ever before to effectively reach these digitally savvy food shoppers. We’re building the tools to help our members assess where they are in their connected commerce strategies.”
Initial findings from this study show that within the next decade, online food shopping will reach maturation in the U.S., far faster than other industries that have come online before. Research also revealed that the center store is likely to shift online faster than other departments, suggesting a fundamental evaluation of the role the store plays in digital food shopping.
“The grocery business truly is at a digital tipping point, where every aspect of the shopper’s journey will soon be influenced by digital, and increasingly enabled by digital platforms,” Morley said. “The need for retailers and manufacturers to know the differences around how consumers shop online versus in-store is greater than ever before. Analytics will be key for retailers and manufacturers to understand the digitally engaged food shopper on a deeper level. Beyond unified insights that connect the dots across consumer interaction and platforms, the winning strategy will turn metrics into action steps towards effective digital engagement.” read more
By Jim Dudlicek, EnsembleIQ
The health and wellness trend has gained huge momentum in the food retail industry over the last few years, and 2017 is shaping up to be no different. From national chains to independent store operators, retailers and brands will likely incorporate health and wellness into their business strategies this year. But what specifically will they focus on?
If 2016 was any indication, there are several health and wellness trends that food retailers and brands can expect to carry into 2017. And after combing through coverage in SmartBrief’s food and beverage newsletters, we identified some of last year’s biggest trends in health and wellness that the food industry should keep in mind in the coming year.
In-store efforts and events
Schnuck Markets offered dietitian-led store tours and cooking classes for new parents through their Baby Month initiative, Raley’s Supermarkets helped shoppers take small steps toward healthier lifestyles with its “Let’s Begin” program and Inserra Supermarkets ShopRite celebrated a decade of its retail dietitian service through a Healthy Meals Makeover event series last year, a string of similar efforts that will likely continue into 2017. Kroger banners Ralphs and Food 4 Less launched an effort that paired doctors, dietitians and nutrition experts with shoppers in stores to help them make healthier food choices. Last year, the number of dietitians working in retails stores neared the 1,000 mark, the Retail Dietitians Business Alliance reported.
“We’re really seeing the supermarket registered dietitian shine,” FMI’s Heather Garlich told the Journal News.
Last year’s in-store health and wellness efforts were not all focused around retail dietitians. This year, the industry could also see events like Produce for Kids’ partnership with Power Your Lunchbox Pledge, which included a campaign that provided recipes, tips and promotions aimed at helping families eat healthier lunches.
Easy, healthy meals and snacks
Produce for Kids’ healthy lunch campaign fits into another 2016 trend that could have legs into 2017. Shoppers sought out healthy meal and snack options, but they also looked for options that were easy and convenient, which are two words the food retail industry could hear a lot about this year too.
Healthy brand EatingWell teamed up with Bellisio Foods last year to offer easy-to-prepare frozen entrees like Cherry Port Pork that are also free of preservatives, artificial colors and hydrogenated oils. Meanwhile, Hormel Foods focused its product expansion around convenient, healthy offerings, adding Rev Bites, Muscle Milk bars and other portable better-for-you snacks. They are just two of many brands that tapped shopper demand for healthy and convenient food options last year, and expect more to come in 2017.
Better-for-you snacks and beverages
Hormel’s better-for-you product launches also highlight last year’s trend toward better-for-you snacks and beverages, which is sure to remain relevant this year. Makers of snack packs took advantage of last year’s demand for healthy snacks by offering veggies with built-in dips and other pairings such as cheese cubes and pretzels.
In the fall, PepsiCo made plans to revamp its lineup of snacks and beverages to focus more on health through efforts including seasoning its Frito-Lay offerings to decrease sodium and gradually lowering the calories in two-thirds of its beverages to 100 calories or less per 12-ounce serving. And Pepsi wasn’t the only company turning its focus to healthier beverages last year. Research from Canadean found that functional drinks including vegetable blends and probiotics were seeing increased interest, which shows no signs of slowing down this year.
Functional, natural and organic foods
Consumers’ cravings for functional beverages last year points to another trend likely to continue into 2017. Functional foods like fermented foods that promote gut health and immunity and chocolate products that also provide health benefits continued to gain popularity last year. Meanwhile, shoppers are also likely to continue seeking out natural and organic products this year, after sales in the category were slated to reach $69 billion last year, which was a trend that showed up in the aisles of national retailers and smaller chains alike.
Projections are positive for both packaged and alcoholic beverages.
While convenience stores are evolving in terms of the products and services they offer consumers, they remain a primary destination for those who want to make a quick beverage purchase.
Seven in 10 retailers (70.6 percent) expect their packaged beverage sales to increase in 2017, and only 2.9 percent expect sales to decrease. The projected net change is 3.3 percent, according to the findings of the 15th annual Convenience Store News Forecast Study.
The CSNews Forecast Study provides dollar and unit volume projections in key c-store product categories based on data from various sources, including Nielsen for category sales history; TDLinx for store counts; and government sources for motor fuel volume and pricing data. The data is then run through a sophisticated projection model and presented in summary form. Maureen Maguire, founder and CEO of New York-based ThinkResearch, oversees the Forecast Study process.
C-store operators are right to be optimistic. According to the CSNews Forecast Study numbers, dollar sales of packaged beverages — which includes carbonated soft drinks, bottled water, sports and energy drinks — will increase 5.2 percent across the total industry. On a per-store basis, dollar sales are expected to increase 4.5 percent, and unit volume is expected to increase 4.1 percent. All of these figures are above the estimated results for 2016.
Although they still take up the most space inside convenience store cold vaults, carbonated soft drinks are likely to see another year of status-quo growth in 2017, with an expected rise of 0.9 percent in dollar sales per store and 1.3 percent in unit volume per store.
Perhaps reflecting consumers' growing interest in healthy eating and drinking habits, or even concern over the safety of tap water following national coverage of the water crisis in Flint, Mich., bottled water will see more growth in dollar sales per store (up 4.4 percent) and unit volume per store (up 2.3 percent), although this marks a slowing compared to 2016.
As for alcoholic beverages, price increases are likely to boost beer dollar sales in 2017, which are expected to rise 1.4 percent per store and 2.1 percent for the total industry. Unit volume is forecasted to be flat. C-store operators believe the biggest impact on beer will come from states implementing new laws regarding beer sales, such as Pennsylvania did in 2016.
The continued popularity of craft beer is a likely contributor to higher prices. Dollar sales of microbrews are expected to increase 12.6 percent while unit volume increases 11.1 percent, both on a per-store basis. This marks another year of slowing growth for the segment, but retailers note it remains "hot," with some reducing their stock of domestic brews in favor of craft. One retailer stressed the importance of "stay[ing] relevant with evolving brands in craft."
57.5% of all shoppers use the omnichannel service, but only 31.6% describe it as being a smooth process, according to a new report.
North American shoppers, 92% of whom say they regularly shop across multiple channels, think retailers have room for improvement when it comes to fulfilling online orders in-store.
That’s according to omnichannel retail management software vendor iVend Retail, which on Monday released its Great Omnichannel Expectations 2016-2017 Shopper Survey Report at the National Retail Federation Big Show in New York. The vendor in October surveyed 1,000 shoppers throughout North America—750 in the United States and 250 in Canada—and found 31.6% of those shoppers find picking up online orders in-store to be a smooth process.
“This suggests there is still work to be done to integrate e-commerce, inventory management and in-store systems to improve the in-store collection experience for customers,” iVend writes.
That’s not stopping shoppers from taking advantage of buy online, pick up in store services, however: 57.5% say they use the offering, with 65.3% of those consumers saying they do so to avoid shipping costs. Other top motivating factors for consumers include convenience (29.2%) and being able to return the product instantly if it doesn’t meet their expectations (23.5%).
That is similar to a report done by Internet Retailer last year, which surveyed 217 U.S. shoppers and found 73% picked up an online order in store to avoid having to pay for shipping, while 32.2% cited convenience as a motivating factor.
According to Top500Guide.com, 157 of the Internet Retailer 2016 Top 1,000 e-retailers in the U.S. offered a buy online, pick up in store option in 2015, 101 of which are retail chains. Among the Top 500 largest retailers in North America, 95 offered buy online, pick up in store in 2015, up 50.8% from 63 in 2014. 74 retail chains offered the service in 2015, compared to 51 in 2014.
iVend’s data finds that shoppers want retailers to offer a more digitally connected in-store shopping experience, with nearly half (46.4%) saying they want retailers to offer free in-store Wi-Fi and 33.5% saying they want personalized promotions sent to them on their phones the moment they walk into a store.
The survey also found:
Nearly 70% of retailers are hopeful about their business prospects, thanks to the combination of convenience and an enhanced food offer.
ALEXANDRIA, Va. – Low gas prices helped drive sales increases at convenience stores in 2016, and retailers expect those strong sales to carry over into 2017, according to the December 2016 NACS consumer sentiment survey.
More than two in three convenience retailers (68%) say that their fuels sales increased in 2016 and nearly the same percentage (63%) say that foodservice sales increased.
“The continued improvement of the economy and low gas prices gave our customers more confidence to buy inside,” said Aloha Petroleum’s Richard Parry (Honolulu, HI). He said that he expects “better-for-you” items to help continue to drive strong sales in 2017.
Industry-wide, better-for-you items like fruits and vegetables, yogurt, nuts and health bars saw strong sales in 2016: 63% of retailers reported that sales of these items increased in 2016. Only one retailer surveyed said that sales were down in 2016. “Healthier-for-you items are beginning to gain some traction,” said Mike Zielinski with Retail Management Services Inc. (New Lenox, IL).
Retailer confidence about the U.S. economy also surged. A record 79% of retailers say they are optimistic about the U.S. economy—a 26-point jump from last quarter. This surge in retailer optimism mirrors the optimism of their customers. A record 60% of U.S. fuel consumers said they are optimistic about the U.S. economy, according to the NACS survey.
Retailers also are very optimistic about the overall convenience retailing industry. More than three in four convenience retailers (78%) said they are optimistic about the industry’s prospects in the first quarter of 2017, a 7-point jump from three months ago.
New investments in technology related to loyalty programs and enhanced customer experiences are central to the strategy of growing convenience store sales in 2017. Continued technology enhancements surrounding digital advertising, consumer awareness and loyalty are a priority at Casey’s General Stores (Ankeny, IA), according to company representative Terry Handley. Meanwhile, David Oswald of A.H. Jamra Company (Toledo, OH) said they are investing in point-of-sale technology. “Go high tech or go blind,” was the advice from Mohammad Khan with Shahani Inc. (Branford, CT).
Retailers said that new investments in food and beverage equipment are also growing sales. Kwik Trip (La Crosse, WI) saw strong sales from its high-end hot beverage sales with its Franke machines and is investing in new beverage offers to continue the momentum. “We expect explosive growth from our new cold-brew coffee and smoothies in 2017,” said Steve Loehr of Kwik Trip.
Ready-for-you meals will be a big industry trend in 2017, according to Sam Odeh with Power Mart Corp. (Elmhurst, IL). Meanwhile, products produced locally—whether snacks, merchandise or even craft beers—are gaining in popularly, according to Todd Kunkel at Handy Mart (Durand, WI).
Increased investments in their stores may have helped reduce retailer concerns over competition. Overall, 39% of retailers cited competition from other convenience stores as a concern, down from 47% who cited industry competition a year ago. Meanwhile, 33% cited concerns over competition from other channels like drug stores or dollar stores. However, the new Amazon Go concept “could be a game-changer down the road,” said Lisa Dell’Alba with Square One Markets Inc. (Bethlehem, PA).
Retailers are much more concerned over threats to their business that are less in their control. A majority of retailers (55%) said that they are concerned about regulations and legislation that could affect their businesses. And 53% are concerned about labor issues, a sharp increase from the 41% who cited labor as a concern a year ago.
Despite concerns over threats to their businesses, 69% of retailers are optimistic about their own business prospects in the first quarter of 2017, largely because of the combination of convenience and an enhanced food offer.
“More convenience stores are adding foodservice, and our industry is moving to a one-stop shop for local communities,” said Nishant Chudasama with Cadnicks (Orange, CA).
“I truly think food will continue to be the trend in 2017—but it’s going to take ingenuity and creativity to continue to entice people to visit convenience stores for lunch and dinner. We’ll need to continually adapt to reflect trends and customer preferences—whether it's a new burger or a new healthy option,” said Dennis McCartney with Landhope Farms (Kennett Square, PA).
The quarterly NACS Retailer Sentiment Survey tracks retailer sentiment related to their businesses, the industry and the economy as a whole. A total of 81 member companies, representing a cumulative 4,052 stores, participated in the December 2016 survey.
Southeast snow, nationwide cold front could be a welcome blast
This post is part of the 10 Items or Less blog.
As the first week of the new year brought more lousy news for grocery – weakening demand sinking sales in December, and pessimistic forecasts for some of the industry’s biggest stocks – it likely comes as a relief to grocery retailers that a temporary solution was literally falling from the sky by week’s end.
And while the forecast snowstorm in the Southeast U.S. was sparking what looked to be enormous spikes in grocery store traffic for the obligatory bread-and-milk runs, things were actually improving all over as a nationwide cold front is motivating shoppers to seek “need-based” items in an otherwise quiet period for shopping, said Evan Gold, EVP of global service for Planalytics, the Berwyn, Pa.-based firm that forecasts demand based on weather.
“I think this is overall good news for grocery as the entire U.S. is facing below-normal temperatures this week,” Gold said Friday morning. “We’re in a post-holiday, post-gift-giving period where people are spending only on what they need. When the weather is like this, we see needs for items like hot drinks, rock salt, wiper blades and snow shovels go up.”
An Instagram photo of a busy pre-storm Kroger store in Atlanta.
Like the haircut, the snow shovel tends to be one of those purchases that can stand up to the threat of online retail. “People just don’t buy them until they absolutely need them and by then is often too late to order it online,” Gold noted. “It’s an item people wind up going to the store for.”
Gold said the grocery rush ahead of a storm tends to redistribute the pattern of traffic more than bring new customers to a store, so the opportunity for retailers in that space — in addition to managing labor and supply chains — is to grow the categories that accompany the weather.
This week, for example, Planalytics is forecasting ice melt sales up 63% vs. the same period last year; snow shovels will spike by 39%; and firelogs and hot chocolate will each see a 4% increase, nationwide. Retailers in Charlotte, N.C., can expect ice melt sales to jump by 200%. Atlanta grocery stores should see hot chocolate up by 17% this week, Gold added.
But even places like New York, where we awoke Friday to see an inch of snow had fallen overnight, should get a boost, he said. “A dusting is good because it’s not enough to keep you inside, but still enough to spark some demand.”
Attention Kmart shoppers
It’s hard to believe today, but there was a time when there was some debate about whether Wal-Mart or Kmart would win the supercenter war.
Kmart’s latest round of store closings include three casualties in its so-called “K-fresh” store test group: Roseville, Mich., Chillicoth, Ohio, and Uniontown, Pa. All of those stores were one-time Super Kmarts with full-blown grocery stores inside that were downsized in recent years to a smattering of fresh and staple items in a manner not unlike Target’s “p-fresh” stores. Liquidation sales begin Saturday. read more
There is a transformation happening in the food and beverage marketplace today. The fancy imported goods and gourmet products that were experienced on rare or special occasions once typically associated with premium quality are not exactly relevant to today’s modern consumer.
Because today’s definition and expectations of quality is being defined by the contemporary consumer. There has never been a time as now in which consumers have been more engaged. They have amazing access to information about food and drink, and food production more than ever before. For today’s consumers, food is now a cultural product to discover, share, make and trade. This reconnection with food and its origins is encouraging a new level of participation.
Think about this food cultural shift: not that long ago, chefs and their staff and all food production were kept in the kitchen, in the back off the restaurant out of view from diners. Today, it’s about open production and seeing chefs in action because food, cooking and the artisans behind the craft now take center stage. Now it’s hand-thrown pottery, having a front row seat to the magic in the kitchen and casual quality with hand-stitched aprons and plaid shirts.
In essence, America’s foodways are becoming more sophisticated and diverse as consumers increasingly aspire to higher quality food experiences they simply did not grow up with. With this consumer-driven redefinition of quality playing out in food culture today, what, then, does “premium” mean and how should brands express quality? This was the question at the heart of The Hartman Group’s A.C.T. (Anthropology. Culture. Trends.) Seattle symposium in September 2016: Deep Dive Into the Premium Food & Beverage Marketplace. Throughout the session, we engaged in a thought-provoking discussion to hone in on what today’s “premium” looks, smells, tastes and feels like. Here are some key thoughts about what premium means:
Winning in the new premium marketplace is as much about thinking differently about a category as much as it is about selling different products. Product quality is implicit, while being authentic, transparent and passionate are key building blocks. Consumers will increasingly bring premium into their households and premium will continue to evolve in meaning.
Marketers should pay attention to which products are showing growth in the natural and specialty channels and ask, “what attributes do they have that will mainstream in the next two to three years?” They should look to other categories for inspiration as well. Staying on top of what premium means will be essential. Food and beverage stakeholders should:
As an industry, we're increasingly more comfortable with who millennials are, and what they want. It's taken a long time, but most brands are now attuned to their likes, dislikes and behaviors.
But don't get too comfortable. Gen Z, born between 1997 and 2011, is now coming of age in large numbers, and marketers can't afford to take as long to come to grips with Gen Z as they did with millennials.
The first cohorts of this new generation, who are now 16 to 19 years old, are increasingly relevant to a wide variety of categories and products. Globally, they are huge too: around 2 billion of the world's citizens -- approximately 27% of the global population -- belong to Gen Z.
The danger for marketers is that Gen Z is not millennial-lite or even millennial-extra strong, but different in distinct ways.
Born and growing up at a time of financial crisis and institutional instability, Gen Z are frugal and brand wary. But they are also industrious and collaborative. Smartphone-first and impatient of brands that don't offer them connected experiences, they expect visual and technical excellence and transparency at their fingertips.
While millennials coveted personalization in their media and advertising experiences, attempts at hyper-personalization often come off to Gen Z as intrusive. Ironically, while Gen Z places a great emphasis on personal privacy, they expect brands to be fully transparent. In an age where everything is knowable, brand imagery and values have to be consistent and discoverable across all brand touchpoints.
This presents something of a conundrum for marketers. Gen Z not only challenge how brands communicate, they challenge the very notion of a brand's authenticity and transparency in digital.
Appealing to Gen Z's unique sense of self and the world around them will require brands to embrace three key paradigm shifts in 2017:
First, brands need to invest media dollars and focus activity in digital platforms that allow consumers to co-create a shared brand experience. Unlike the personalization coveted by millennials, Gen Z will be hands on -- they want to try it, take it apart and recreate it.
Lego Ideas, for example, allows audiences to submit ideas on new Lego products and let others vote and comment on them. Submissions showcase fully built Lego products. Products created from Lego Ideas include a Lego version of the Mars Science Laboratory Curiosity Rover.
Second, brands need to give their target consumers a deeper look inside the brand via owned media. Beyond simply offering products and services, brands need to share their story, their purpose and details about their production processes. Alongside owned messages, they also need to push such content strategically via sponsored content opportunities. Such openness will allow Gen Z to determine if the brand's values match their own.
Patagonia is a model brand using this strategy. In its new Fair Trade campaign, Patagonia challenges consumers to consider where their clothing was made, and shares video of the Patagonia production process and the people who make the clothes.
Finally, brands need to switch their creative and media focus. The internet is built on left brain, linear thinking and is factually based. Gen Z seeks a digital experience that is more right brain, with a focus on imagination through technologies such as Augmented Reality and Virtual Reality, nonverbal immersive formats, music and stronger visual imagery. The Under Armour "Rule Yourself" campaign (winner of the Cannes Lion Grand Prix) featuring Michael Phelps resonated with its young male target and has become one of the most-shared Olympic ads of all time.
Winning over Gen Z will not be easy, but it will make brands and their advertising better and more adaptive in the process. Starting now will ensure we don't see the deluge of "What marketers don't understand about Gen Z" headlines that were so common as the millennials came of age.
By Joline McGoldrick
Joline is director of research at Millward Brown Digital.