Marketing to Generation Z — the youngest and fastest growing demographic — is proving to be a tough test for major shoe players.
The cohort — whose members are mostly younger than 20 years old — is defined by a level of resilience and independence experts say they have never seen before. Gen Z is both practical and aspirational when it comes to personal style and purchasing decisions.
“One of the big things that shaped Gen Z is that they grew up during the [Great] Recession, [which has made them] incredibly practical when it comes to spending and thoughtful about what they buy,” explained MaryLeigh Bliss, trends editor and strategic consultant at youth marketing firm Youth Pulse Inc. “So communicating the value — whether it’s entertainment [value] or quality — of a product is vitally important.”
Where price-value is concerned, experts say shoe brands such as Steve Madden and Skechers USA Inc. have been hitting the mark.
“Skechers is both active and value-oriented,” said Jeff Van Sinderen, an analyst with Los Angeles-based B. Riley & Co. LLC. “Steve Madden is relatively value-oriented and appeals to the [younger] female’s sense of unique fashion-forward and sometimes edgy style with faster-fashion footwear that is extremely well executed at a reasonable, accessible price point.”
Susquehanna Financial Group LLLP analyst Sam Poser has made similar observations about Madden’s youth appeal.
“They have a lot of product that this younger customer aspires to — they can take a shoe that they see Kourtney Kardashian wearing and turn it into Steve Madden product very quickly and [sell it for] 20 percent of the price,” Poser said. “They do that exceptionally well, and they communicate it exceptionally well.”
The brand’s founder and creative and design chief said he’s proud of his firm’s marketing strategy, but he credits solid wares for its connection to the youth consumer.
“It’s all about product — that’s all we worry about,” Steve Madden said. “If you’ve got the right stuff, then you can look smart in all the other areas [such as] social media and e-commerce. We do a great Instagram and what not — but we don’t start there.”
Who’s Calling the Shots?
According to the most recent study by Kantar Futures, 64 percent of Gen Z’s consumers say that their parents pay for all of their shoes, and 57 percent say their parents pay for all of their clothing.
But Kate Turkcan, VP and head of youth insights at the firm, pointed out that the decisions regarding what they wear and how much it costs falls squarely on the product users, not their parents.
“From a very young age, they’re being allowed to make choices on their own,” explained Turkcan. “We’re seeing this future planning mentality that we haven’t seen at this stage before, and that’s coming up in their [fashion] choices — the majority of them say that they’re savers over spenders.”
Although this bunch values affordability, experts point out that Generation Z still has high expectations when it comes to product innovation.
“Young people expect brands to innovate, experiment and use new technology,” Bliss said. “Nike and Adidas are two brands that do that.”
Case in point: Bliss’ firm recently conducted a survey among millennials and Gen Z, asking them to identify nontech brands that they think are innovative. For 13-to-17-year-olds, Nike and Adidas landed on top.
Adidas — which is in the midst of a spirited North American revival — said it has made a few strategic moves recently targeted at creating excitement around innovation for young consumers.
“[In 2016] we introduced new products like NMD and Tubular, partnered with culture influencers like Pharrell Williams and Kanye West to disrupt the industry, collaborated with retail partners to refresh our iconic silhouettes like Stan Smith and Superstar, and mobilized events throughout the U.S.,” said Pascha Naderi-Najed, senior director of global sales at Adidas Originals. “Through this approach, [we] continue to have a very real connection with youth culture because it’s a collaboration of ideas and feedback, ultimately keeping our brand on the pulse of what’s next.”
Meanwhile, Youth Pulse’s Bliss notes that Nike has consistently found a way into the heart of digital natives with its crafty online marketing.
“Nike has been incredibly masterful when it comes to using Instagram and social media channels and creating a space where anyone can find something they’re interested in,” Bliss said. “They’re incredibly accessible, and they’re not all about only the star celebrity sports figure — they’re also all about featuring people who look and feel real.”
Equally important as creating authentic and relatable content online is having that messaging remain consistent across channels, according to Turkcan.
“The biggest thing with social media presence is not having it feel like an outlier of your brand,” she explained. “Your social media [strategy] should be an extension of what you live and breathe every day. It shouldn’t feel like some separate world where you have some 20-year-old intern creating hashtags.”
Turkcan identified Nordstrom Inc. as a leading department store when it comes to effective social media usage.
“They’re doing a good job with their social presence, [especially because] you can buy [product] from their Instagram page,” she noted.
Since Gen Z is particularly averse to blatant advertising as well as promotional materials that they can’t opt out of, finding unique ways to engage this audience is critical to making them fans of your brand, according to Bliss.
“Snapchat is the huge marketing star when it comes to reaching Gen Z,” she said. “[That demographic] needs advertising that is interactive — [such as] the ads on Snapchat with the interactive filter lenses — allowing them to participate and share that experience and have fun.”
That’s because this generation is viewing purchasing decisions in a different way than some other consumer groups.
“If the need or desire to buy something is solely [based upon] a material purchase,” said Camilo Lyon, an analyst with Canaccord Genuity Inc., “that’s a losing strategy for a company. This consumer is transfixed by Instagramming or Facebooking their purchases, but it’s not just the outright purchase — it’s the experience through which they [attained] purchase.”
And when it comes to meeting that aspect of Gen Z’s needs, experts agree that retailers are not quite there yet.
“Forever 21 and H&M are good at addressing Gen Z’s desire for value and uniqueness in product,” Bliss said. “But when it comes to experiences, young consumers are probably not getting what they want.”
Meanwhile, many brands have successfully tapped into another important demand from Gen Z: the need to see corporations be more socially responsible and stand up for causes.
“Brands that have an inclusive message tend to resonate well with Gen Z,” noted Van Sinderen. “[Fashion players] need to move toward greater authenticity, greenness as well as social consciousness. Product is still king, but adding these other nuanced elements can be effective in enhancing engagement with this group.”
Firms that build relationships with this demographic from a very young age also stand a better chance of keeping their business in the long run, according to Lyon.
“Something that Nike and Under Armour do is try to reach their consumer very early on,” Lyon said. “In New York, there are several Nike-sponsored gyms — they’re beautiful gyms set up so that kids can play ball, and there’s one stipulation: You got to wear Nikes to get in.”
He added, “There’s this sort of indoctrination that happens early on from the brands that are looking to create lifelong attachments to their consumers.”
(Editor’s Note: This article originally appeared in the Feb. 13 print issue of Footwear News.)