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What retailers get right—and wrong—about Gen Z.
Morning Brew May 11, 2022

Retail Brew

Listrak

Happy Wednesday. Which is also Eat What You Want Day. We didn’t know there was a designated day to do so…it’s just the Retail Brew way.

In today’s edition:

Andrew Adam Newman, Erin Cabrey

GEN Z

Free to be you and Z

Meagan Loyst, investor at VC firm Lerer Hippeau Hadi Yazdani

If you want to be technical about it, Meagan Loyst says she’s what you’d call an “Elder Gen Z,” born—as she was—in April 1997, with the generation generally bracketed from 1997 to 2012. Loyst is so long in the tooth, she noted, that, unlike her younger sisters, “My first phone was not an iPhone.”

Still, at 25, Loyst is the youngest investor at Lerer Hippeau, the VC firm she joined in 2020. She also founded Gen Z VCs, a Slack group with ~15,000 members that aims to make VC less opaque for young investors, and to help connect them with company founders in their cohort.

  • Think of her as a go-to analyst when it comes to Gen Z consumers and brands.

Now, it is Gen Z month at Retail Brew, and we’re trying to shed some light on the customs and rituals of these mysterious creatures. So we asked Loyst about what retail brands get right about Gen Z, what they get wrong, and what she’s going to do with herself when everyone gets obsessed with the next generation.

This interview has been lightly edited and condensed for clarity.

Does a company supporting causes like Planned Parenthood seem more important for Gen Z?

Pretty much every Gen Z company that comes through our doors has some type of sustainability pledge like, “Better for you, better for the planet.” That’s not something with our portfolio companies across the board. And it’s because this is where the world is moving. To launch a brand today and not be thinking about these things is—it’s not tone deaf per se, but if you’re going after the Gen Z consumer, you kind of have to be doing it.

Is there a supposed insight that retail executives think they know about Gen Z but that’s only half-right or just wrong?

I would argue that most Gen Zers don’t purchase things solely because they’re sustainable. Shein is a great example of that…Shein hauls have [more than] 5.1 billion views on TikTok, and a majority of their users are Gen Z. Shein is the total opposite of what a sustainable brand looks like: They’re quintessential fast fashion. The assumption that Gen Z are buying things just because they’re sustainable and good for the world is just a misconception because there’s a bunch of factors that go into the buying decision at the end of the day.

Click here to read the full Q&A, including Loyst’s thoughts on why Gen Z really hearts resale.—AAN

        

FOOD & BEV

Flip the lid

Danone's Oikos products Danone

In the often overwhelming yogurt aisle at the grocery store, Danone accounts for a good chunk. With brands like Activia, Dannon, and Oikos, it has 32.2% of the yogurt market share in North America, per the company, plus 70% in plant-based yogurt with Silk and So Delicious.

But with great market share comes great responsibility volatility. Amid inflation and supply-chain constraints, Pedro Silveira, president of yogurt for Danone North America, told Retail Brew that the CPG giant has had to work to “stay ahead of the game.”

Lid adieu: Danone used supply-chain crunches as an opportunity to keep things simple. “There is one statement that comes to my mind all the time, which is, ‘Never let a good crisis go [to] waste,’” Silveira said.

With 400+ SKUs across 10 yogurt brands (plus various pack formats), Danone found it produced nearly 300 different lids across its yogurts with unique health and flavor info on each one, he explained—forcing its supplier to spend 40 hours a month just stopping the line to do changeovers. Recognizing consumers read front labels way more often, the company questioned if it really needed all that complexity.

  • It didn’t. Danone “dramatically” reduced the amount of lids it produces by creating more generic ones suitable for multiple flavors, Silveira said.

Seal the deal: Like many, the company also raised prices earlier this year—roughly 5% across its portfolio—and has found thus far that its brands have “resilience” to higher $$, Silveira said.

Plus, Danone likes to “play with promotions.” Click here to read more.—EC

        

TOGETHER WITH LISTRAK

Create showstopping marketing

Listrak

All marketers want their campaigns to put on the best performance possible (aka engage, convert, and drive revenue). But without the right platform to power and synchronize their marketing campaigns, they run the risk of flopping rather than earning an encore.

That’s why more than 1,000 retailers and brands use Listrak: the leading cross-channel marketing engagement platform with a data-first approach that orchestrates messages across channels, devices, and the entire customer journey.

Listrak’s single platform helps you with everything from capturing customer data with Identity Resolution (GXP) to powering cross-channel experiences with SMS and email.

Wanna experience the harmony Listrak can bring to your marketing campaigns? We created an interactive soundboard representing each pillar of Listrak’s all-in-one platform. When you play them all together, the unified soundtrack is (quite literally) music to your ears.

Make your marketing melody and steal the stage with Listrak. Check out our interactive soundboard here.

COMMUNITY

Coworking with Emily Zippilli

On Wednesdays, we wear pink spotlight Retail Brew’s readers. Want to be featured in an upcoming edition? Click here to introduce yourself.

When Emily Zippilli was on her college tour at St. Joseph’s University, three things floored the then-18-year-old: the campus, the student culture, and the revelation that it had a food marketing program. “It became a done deal,” she recalled.

Now, years later, she’s a senior national account executive for the Kellogg Company (she has Toucan Sam’s beak in her email sig file!), working exclusively with Costco stores in the Northeast. But she spends time in more than just the cereal aisle, since other Kellogg’s brands—like Cheez-It and MorningStar Farms—are also in her purview. “Nothing brings people together better than a good meal,” Zippilli told us, “yet nothing is more complex than the supply chain and negotiations processes that lead to those meals hitting shelves and getting in your cart.”

One thing we can’t guess about you from your LinkedIn profile: My first job in the food industry entailed a hairnet, apron, and giving out hot dog samples at Costco.

What’s your favorite project you’ve worked on? When I was on the ShopRite account, we redesigned the cereal aisle to flow by cereal type (i.e., kids) as opposed to cereal manufacturer (i.e., Kellogg’s)...A standard cereal aisle flows by manufacturer. The Kellogg’s, Post, Quaker and General Mills items are all in their own section. However, the Kellogg’s thought process was that your everyday shopper doesn’t shop by manufacturer. Instead, they are shopping for different preferences of the members of their household.

One trend that you’re excited about this year: I think it’s been really interesting to track the innovation and VC investments in “the last mile” of a shopper’s journey. Time is our most precious commodity, and these are all focused around adding time and convenience back to our everyday lives.

Are you a cereal mixer or nah? Hear me out…but you need to mix Frosted Flakes and Rice Krispies. The sweetness of Frosted Flakes combined with the snap, crackle, and pop of Rice Krispies never disappoints.

What’s the most embarrassing product in your order history from Amazon that you’re actually willing to admit? An embarrassing amount of dog bandanas to keep my Bernedoodle, Pepper, well accessorized at all times.

        

WHAT ELSE IS BREWING

  • Inflation kept doing what inflation’s been doing lately, with the CPI rising 8.3% in April, a skosh better than March but still close to the worst level since 1982.
  • Kohl’s shareholders decided to re-elect the retailer’s current board of directors, per an initial tally.
  • Shopify debuted a new tool that taps machine learning to help merchants tap new customers.
  • Nike has kicked things up a notch in its trademark-infringement lawsuit against StockX, asking a judge to add claims of counterfeiting and false advertising.
  • Arianee, a Paris-based startup that helps fashion and luxury brands get into NFTs, has raised €20 million.

TOGETHER WITH PATTERN

Pattern

Connect with the best in the biz: Accelerate, the Global Ecommerce Acceleration Summit, brings together ecommerce executives, brands, and innovators in Salt Lake City, June 15–16 to strategize with specialists, elevate their insights, and network with industry rock stars. Speakers include actress and Hello Bello cofounder Kristen Bell, Pattern CEO David Wright, and tons of groundbreaking ecommerce leaders. Grab your ticket here.

SWAPPING SKUS

Next in line: With brands like Tommy Hilfiger and Boss by Hugo Boss expanding their presence within the country, Senegal is becoming a promising new fashion destination in West Africa. (Business of Fashion)

Once upon a time: After being acquired by Authentic Brands Group, Reebok is looking to reclaim some of its former glory. (Retail Dive)

A new approach: From Goodlife to Bean Box, DTC brands are increasingly turning to curated bundles to ramp up sales. (ModernRetail)

Don’t miss this: Want more of the latest news at the intersection of tech and retail? Look no further than Emerging Tech Brew, which covers topics such as the future of at-home fitness devices, wearables, and more. Check it out.

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Written by Andrew Adam Newman and Erin Cabrey

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