5 Gen Z marketing tips from DTC brands

Nearly every brand in America is chasing Gen Z. But gaining loyalty—and respect—from this young generation is easier said than done. They like brands that have a higher purpose but can easily sniff out a fraud. They want sustainability but don’t want to sacrifice fashion for it. They increasingly need financial products but are skeptical of those who provide them. Brands that sell directly to consumers are confronting these challenges on a daily basis. DTC marketers from a variety of industries shared some of what they have learned at Ad Age’s recent NextGen Marketing Summit in New York. Below, five takeaways they shared about reaching today’s teens to twentysomethings. Building a brand with purpose A collection of high-performance products—and a parallel focus on purpose—has helped Rare Beauty find success as a DTC brand in the competitive cosmetics field. A high-profile founder who shaped that vision has helped as well, said Katie Welch, chief marketing officer. “When Selena [Gomez] wanted to create the brand, she wanted it to be something bigger than herself, bigger than beauty, something that could make an impact beyond beauty,” Welch said. Subscribe to Ad Age Sign up now for the latest industry news and analysis Click here One percent of all Rare Beauty sales go toward the Rare Impact Fund, which supports mental health services for young people. Online sessions with target customers in the pre-launch stage helped the brand zero in on an unmet need for mental health support among young people, Welch noted. Rare Impact has so far raised $16 million and is supporting 30 grantees around the world. An in-house social media team leads Rare Beauty’s online marketing, but the brand appointed Fred & Farid for its first global brand campaign, “Every Side of You,” which came out in October. Gomez narrates and appears in the ad, which showcases Rare Beauty’s welcoming nature, distinct packaging and the breadth of its users. Rare Beauty has developed a rapport with its social community, Welch said. “If a TikTok pops off or an Instagram Reel does, then we can put more money behind that,” Welch said. “But some of the TikToks that we do are for just sheer community engagement and entertainment, and reminding people of what the brand is.” Some Rare Beauty items are sold at Sephora stores, but a deeper collection—along with branded gear such as apparel and accessories—is available online. While online shoppers tend to be deeply devoted to the brand, “there is more to community building than selling sweatshirts,” Welch said. “The most important thing is to know what your brand stands for, what your product point of difference is,” Welch said. “Gen Z, they are discerning. They will tell you if they don't like a product. They are not scared about it.” Also read: Find out which brands resonate with Gen ZPlus: The state of DTC—what is working and what’s ahead Financial tools for Gen Z Representatives of three financial platforms shared their marketing strategies for reaching a Gen Z customer base that is in need of money solutions but skeptical of financial institutions. Although rules governing financial players place restrictions on topics they can discuss online, Cash App has found success using influencers who can discuss financial topics in a casual manner, said Will Simpson, head of brand strategy. “We don’t come out with 100 must-hit talking points,” he said. “What we’ve seen in the comments are people saying stuff like, ‘I just watched a four-minute ad and had no idea, and I want to watch it again.’” Zip, which provides payment solutions, has focused on the emergent “Fintok” movement in Tiktok, working with influencers directly as it learns the space, said Jinal Shah, chief marketing officer. While Zip’s focus is on connecting with young adults just learning about personal finance matters, it prefers not to use the term “financial literacy,” Shah said. “Assuming that someone is not literate just doesn’t sit well with our values,” she said. Luke Pelullo, co-founder and chief operating officer of Arro, discussed the company’s Gen Z-focused credit card that allows its holders to get limit increases based on interacting with gamified educational content that helps build responsible financial habits. “We’re really there to be a financial coach and to help you make the right decisions early on,” said Pelullo, comparing the offering to that of Duolingo. Alternatives to credit cards have also grown in the form of “buy now, pay later” installment plans, which are going mainstream, said Shah. Zip has designed its product to help users avoid financial calamities. For example, it offers a free payment due date adjustment so users can align their bills with their paychecks. Zip is learning a lot about marketing from its customers, Shah added. Quarterly customer gatherings led to a breakthrough when Zip realized users were more excited learning from one another than from the company. “You feel seen and heard when you see someone exactly like you on the other side,” Shah said. “So for us, it’s how do we actually take our customer stories themselves and leverage those to help other customers.” More from Ad Age: How financial brands are connecting with Gen Z DTC to the Super Bowl “Bold marketing has always been in our DNA,” said Dan Kenger, chief design officer at Hims & Hers, the DTC health care company founded in 2017. Devoted to destigmatizing health ailments and their treatments, Him & Hers took that message to the masses this year in a much-talked-about Super Bowl ad. The ad tackled the company’s solutions to the obesity crisis—and called out a larger health care ecosystem it said was “built to keep us sick and stuck.” Kenger said the ad “made people dig a little deeper” and gain awareness of options when it comes to weight-loss drugs. “I think that is a testament to our mission. When prices come down, all customers win and health care is more accessible.” Created in-house, the ad eschewed the humor and celebrities used in most Super Bowl ads, Kenger said, and succeeded in its goal of raising awareness. On the day after the Super Bowl, competitor Novo Nordisk responded with ads criticizing compounded medications, which is the type that Hims & Hers manufactures, for not being FDA-approved. “I think our whole approach is just head down and eyes on the prize, just outwork the competition and just keep putting out really good work that your customers care about,” Kenger said. “We see all the voices being added to this conversation as a net positive. They’re just driving more awareness, more attention to the issue.” Strides in sustainable fashion Gen Z has high expectations of sustainability from the companies they do business with—and little desire to make compromises for it. That’s both an opportunity and a challenge for DTC fashion brands based in sustainable practices. “Gen Z isn’t willing to necessarily sacrifice other things for the sake of sustainability,” said Kim Gallagher, executive director of marketing and customer success at Nuuly, a fashion rental business. “Gen Z still does really value affordability and access to fashion. They’re not going to skimp on fashion to be sustainable. They want it all if possible.” Although sustainability has long been central to Poshmark’s business model, the brand wraps that aspect in a larger message about the changing definition of ownership, said Steven Tristan Young, chief marketing officer of the secondhand clothing marketplace. “I think sustainability started with the idea of that ownership is not what it used to be for this generation and that sustainability as a word actually has just become even more popular in the last three or four years,” Young said. Cost consciousness is also a factor in Poshmark’s business for users who sell items on the marketplace as well as buy them, said Young. The variety of items available on the marketplace has altered Poshmark’s influencer strategy. It is moving to micro-influencers in small communities for whom specific styles or categories will be important, Young said. “Whether it’s K-pop fashion or people who love grandma core or people who love anything core. We want to find those people that have communities and have them speak on behalf of like what they can find on the platform.” Nuuly just launched an ad campaign running on streaming video that introduces the brand and its concept, bolstering an ongoing influencer marketing effort. “We’re trying to toe the line between teaching people about Nuuly, but also teaching people about what renting is and showing a lot of clothes,” Gallagher said. Poshmark is taking up more live selling shows, styled after a popular format in Asia. “It’s been gangbusters,” Young said. “For a lot of people, it becomes a form of entertainment and consumption.” Doing brand collabs right Brand collaborations can be a critical part of DTC success, and they needn’t be complicated—just well thought out and executed—according to a panel of DTC marketers whose brands have benefited from strategic partnerships. To promote the release of a new cleanser, Bubble Skincare reached out to social media phenom Scrub Daddy with the idea of calling on one another’s cleaning equity by staging a rivalry that began with Scrub Daddy “scrubbing away” Bubble’s TikTok feed. “We have this really active community; they are always watching what we do, and we figured that they would freak out if all of our content disappeared,” said Zee Carlstrom, senior director of brand strategy at Bubble Skincare. “What I liked about this partnership was we had a huge moment on social media, around a million unique impressions, and we didn’t have to make anything except for a couple videos,” Carlstrom added. “We didn’t have to, like, spend time making a sponge that looks like Bubble.” @scrubdaddy Okay, dang. @Bubble Skincare… #scrubdaddy #smile #cleantok #cleaningtiktok #bubbleskincare ♬ original sound - Scrub Daddy Read more about Scrub Daddy’s TikTok collabs with other brands Hand-sanitizer brand Touchland does very few partnerships, but when it does, it does big ones, said Andrea Lisbona, its CEO and founder. These include a licensed product launch with Hello Kitty and a collab with the girl group Blackpink. Branded items from the Hello Kitty partnership sold out immediately, necessitating emergency warehouse shipments, Lisbona said. “Collaborations are almost like stairs for you to grow in positioning and grow in the mindset of consumers,” said Lisbona. “Those are collaborations that make sense for the brand.” A partnership between the Away luggage brand and HBO’s resort-set drama “The White Lotus” has been a natural fit, said Josh Sacks, director of brand marketing for Away, which has released a line of show-branded luggage products. The collab has also helped Away build its profile through the show’s cultural impact and travel trends like “set-jetting,” he said. It’s important not to lose sight of a brand’s vision in the process of dealmaking, Sacks said. “I think going into a collaboration, going in with the ‘why’ and what the vision is behind the why is super important,” Sacks said. Collaborations can vary wildly in styles and outcomes, so brands should be strategic and flexible, said Ariel Stoddard, chief revenue officer of MeUndies. For example, MeUndies and the irreverent beverage brand Liquid Death worked together to hype a co-branded product with an eye on marketing and PR wins. By contrast, a recent collaboration with the “Beetlejuice Beetlejuice” movie was more sell-through minded and driven primarily by MeUndies, Stoddard noted. View this post on Instagram A post shared by Liquid Death (@liquiddeath) MeUndies plans its partnerships carefully, looking ultimately for sales but also on meeting the collab’s strategic objectives. “When we look at success, obviously we want it to sell through, but we also want to understand if the strategy that we employed for this collaboration actually was executed on,” Stoddard said. And because MeUndies needs ample lead time for a co-branded product, customer research is key. “We continuously survey our customers and then the general population to try and understand what are people excited about, what are people interested in,” Stoddard said.

5 Gen Z marketing tips from DTC brands

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