Gen Z has an annual purchasing power of $143B, how can business owners use AI to move the needle in understanding their behavior and getting their attention?
By Jordan Gal, CEO of Rally
With a unique approach to self-expression and identity, Gen Zers are redefining the way novelty is understood and appreciated. As digital natives, this group demands that brands understand how they fluidly move in between digital spaces. Gen Zers are heightening some of the shopping behaviors that millennials started, while simultaneously carving out preferences of their own. For example, showing interest to brands that prioritize ESG and social responsibility. It’s estimated that 40% of total U.S. consumers are Gen Zers, but with a high level of skepticism towards traditional marketing tactics, this group has been traditionally hard to advertise to. For merchants, the stakes to adapt are high.
AI technology can now write short-form copy, create graphics, and even provide personalized store and search recommendations. How can AI tools help brands more effectively capture the attention of Gen Z?
Increased flexibility and opportunity to pivot
According to CB Insights, failure to pivot is one of the most common reasons that startups struggle to succeed. Smart merchants can leverage AI tools to make smart decisions, understand what messages resonate best with new target audiences (like Gen Z) and be more agile. These tools help with everything from brainstorming new product lines, writing unique store captions, repurposing product descriptions and rapidly creating social media content. By being able to brainstorm quickly and iterate faster than ever, ecommerce store owners can stay ahead of the curve in understanding what new customers respond to.
More effectively identify ‘white space’ and keep an eye on competitors
AI tools can process and analyze troves of data faster than a human brain could. This allows business owners the ability to visualize trends and patterns from market data they otherwise may have missed. From social media monitoring and analysis to trends forecasting, these tools allow ecommerce business owners to think about ‘white space’ that competitors may have missed.
Recognize emerging opportunities for new products
According to McKinsey, AI is increasingly being examined as a new tool to help business leaders be more strategic. As digital natives, Gen Zers have a keen ability to interact with brands online across a variety of platforms and rapidly compare purchasing options. AI technology can give business owners an edge to iterate quickly on designs, SKUs, colorways and understand shifting consumer motivations to expand products. For example, if you are an ecommerce swimwear brand, perhaps a burgeoning new social media trend around Gen Z sizing inclusivity is something your competitor has not picked up on. AI technology could flag this as something you should act on as a new product opportunity.
Better targeted marketing, especially for hard to reach consumers groups like Gen Z
Data shows that Gen Zers are uniquely very skeptical toward brands and are quick to pivot their attention away from a brand they feel is not being truthful. Recent data from Morning Consult’s “Gen Z Worldview Tracker” shows the average Gen Z trust rating for major institutions has dropped from 56% to 46%. The rapid popularity of AI tools like ChatGPT represent a new frontier for marketers and written content creators to quickly iterate on what messaging works to capture the attention of their target customer and what doesn’t. Merchants and their teams can now quickly create personalized, targeted content such as: new taglines, social media descriptions and content creation.
Opportunity for better customer communication
Gartner predicts that by 2026 one out of every ten customer service agent interactions will be automated through the use of conversational AI tools. From an ecommerce lens, these automated bots can allow customer interactions to be more personalized and can make better product or return process suggestions. While these AI customer service deployments won’t replace human interaction in the customer service realm, it will be a valuable supplement in both lowering your customer service costs and empowering you to better understand your customer’s needs.
Ecommerce business owners should view AI technology as a key ingredient in the recipe of understanding their target customer. These burgeoning technologies represent a new frontier for merchants to capture the attention of hard to reach consumers like Gen Z. As the list of AI products coming to market grows rapidly, we can expect this trend to continue into 2023 – providing more tools, competition and opportunities for entrepreneurs to leverage when working to more intimately understand their target consumer and scale their business.
About the author
Jordan Gal is a passionate and mission-driven leader who has been building transformative ecommerce solutions since 2015. He is the co-founder and CEO of Rally, the headless checkout solution that puts merchants in full control of their tech stack and increases revenue. Prior to Rally, Gal founded Carthook, a checkout solution operating exclusively on Shopify, which processed over $3B on behalf of merchants.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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