How to Attract Gen Z Consumers to Your Small Business

If you haven’t paid much attention to how your business can attract younger consumers, you’ll want to start. Members of Generation Z—those born roughly between 1997 and 2012—are becoming a driving force in the economy. What’s more, many support smaller businesses.

About 68.2 million Americans make up Gen Z, and they account for slightly more than 20 percent of the U.S. population, Insider Intelligence reports. They command about $150 billion in buying power, according to Insider Intelligence.

About two-thirds of both millennials (those born between 1981 and 1996) and Gen Zers said they’d participate in Small Business Saturday, which occurs the Saturday after Thanksgiving, a recent Bankrate survey found. The initiative was launched in 2010 by American Express to help local businesses attract customers, and Small Business Saturday 2022 drove an estimated $17.9 billion in business, American Express reports.

This is key, as customers who shop Small Business Saturday are likely to continue patronizing small businesses after the holiday season. “Nearly three-quarters of respondents to American Express’ 2022 Small Business Saturday Consumer Insights Survey said Small Business Saturday makes them want to shop and dine at small, independently owned retailers and restaurants all year long because of the impact it has on their local community,” said Brett Sussman, Vice President and Head of Sales and Marketing with Kabbage from American Express. About 68 cents of every dollar spent at a small business stays in the community, also according to American Express.

So, how can your business tap into Gen Z consumers? These steps can help:

Master social media

Social media is now key in attracting all consumers, but particularly Gen Z. Two-thirds of Gen Zers on TikTok have shopped with a small business displayed on their “For You” page, American Express found

“Small business retailers can use social media to attract both online and in-store shoppers,” Sussman said. Targeting social media content to your local audience can boost awareness and drive foot traffic, while customer-profile targeting can drive online sales, he said. Nearly half—47%—of small businesses expect social media advertising to have the greatest impact on customer acquisition, he added.

In particular, social commerce—shopping experiences that occur within a social media platform—is poised to hit almost $80 billion by 2025, up from about $27 billion in 2020. Younger consumers are leading the way, with 63% of Gen Z looking to connect with brands on social media.

Go mobile

About 29% of small businesses are prioritizing mobile and investing to build a mobile app for their small business, Sussman says.

Focus on customer service and unique items

More than half of respondents to the Bankrate survey said they shopped smaller retailers because of their ability to provide unique gift ideas, while 48% appreciate the better customer service.

Be ready to adjust

During the pandemic, many online businesses had to quickly scale operations, said Kathy Korman Frey, Professor at The George Washington University School of Business and Managing Director, Center for Entrepreneurial Excellence. “The word of the day is ‘pivot.’” Frey said. Services that can help in amping up online transactions are a go-to for small businesses, she added

The goal? Make it easy for customers to do business with you, whether in person, online, through mobile apps, or through social commerce.

Highlight any sustainability initiatives you’ve launched

Three-quarters of Gen Z consumers said sustainability was more important to them than the brand name of product, according to a survey by First Insight and the Baker Retailing Center at the Wharton School at the University of Pennsylvania

Sustainability actually resonates with consumers of all ages, the survey found. Nearly three-quarters of all respondents said sustainable packaging is very or somewhat important, up from 58% in 2019.

Consider tools to keep customers returning

Offering a membership or subscription model is an excellent way to keep customers coming back, Frey said. “It’s simple. It works. It can be a great first step for a small business in 2023.”

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