Cultural Markting Council research results find racial insensitivity causes brands to lose gen-z customers, values-based consumers

FAIRFAX, Va. -- Nine of 10 chief executives, advertising, promotions, sales & marketing managers are non-Hispanic white. Without breaking internal marketing "culture bubbles" to put cultural fluency and insights at the core of every brand strategy, brands risk a break up with Gen Zers and their parents. According to the second part of a new study by the Culture Marketing Council: The Voice of Hispanic Marketing (CMC), Gen Zers and Hispanic and Black parents will quit a brand that offends any racial group (this ranked third among non-Hispanic white parents). As 2020 marks the first time the 0 to 17-year-old segment—or any American generation, for that matter—is a multicultural majority, marketers must think beyond price and focus on cultural literacy and social responsibility to capture market share among Gen Zers. Building on more than 20,500 consumer touchpoints to date, the CMC released the second part of a comprehensive study on Gen Z (ages 13 to 17), IT'S TIME: Ready (or Not) for the Multicultural Majority, analyzing brand choices, paths to purchase and brand gaffes that led to breakups. "Gen Z is a diverse generation that feels a sense of unity with other minority segments and understands that hate and racism are the biggest issues they face together," said CMC Research Chair Nancy Tellet, founder, brand & consumer navigator at PureClarity LLC. "As a result, when they see brands acting in a way that doesn't align with their values or that is culturally obtuse, they walk away and spread the word. Offending Gen Zers and their parents can be akin to brand implosion." 1) Brands That Offend Can Kiss Gen Zers and Their Parents Goodbye More than half of people ages 13 to 49 have quit a culturally illiterate brand, saying it "offended them or disrespected their values"—that number skyrocketing to 72 percent among Black female parents—but the number-one reason Gen Zers and Hispanic and Black parents have quit a brand is disrespect for their own or another racial group (it ranked third among NHW parents). Nearly a third of teens will quit a brand if it offends the LGBTQ+ community, compared to only 15 percent of their parents. Other issues for breakups include animal cruelty and sustainability. 2) Brands Can Take Calculated Risks If They Know Their Consumers' Cultural Values First Nike using Colin Kaepernick in their ads was a calculated risk based on knowing that their customers value "freedom of speech/right to protest" over patriotic symbols—sales did not suffer. When Walmart and Dick's Sporting Goods took steps to address gun violence by tightening their restrictions and removing some types of firearms and ammunition from their stories, they saw no ultimate negative bottom-line impact—in fact, 67 percent of multicultural people ages 13 to 49 and 53 percent of NHW said they were more likely to shop in these stores after this move. 3) Brands Cannot Rely on Price Alone to Woo Gen Zers and Their Parents Ninety-two percent of Gen Zers and their parents agree some things matter more than price: trust, reliability, healthy/organic and style were important. Teens often distance themselves from brands that commit offensive gaffes because those brands reflect poorly on their social media personas. When it comes to food, nearly a third of Gen Zers and their parents say healthy and organic matter more than price. Nearly one out to two parents buy healthy/organic foods and beverages just for their kids and not themselves—this number jumps to 62 percent among Hispanic parents. In addition, building relationships with Hispanic teens is critical to brands as they are more likely to make their own choices due to their heightened family responsibility role which includes bill paying and purchasing. 4) Brands Wooing Teens Should Supercharge Their Marketing Via Solid Social Media Strategies and Influencer Endorsements Social media fashion and lifestyle influencers have the most cache when it comes to purchase behaviors by young consumers. Hispanic teens and Hispanic adults ages 25 to 49 are 55 percent and 44 percent, respectively, more likely to try a product endorsed by an influencer than a traditional ad compared to 37 percent of their non-Hispanic counterparts. When the celebrity or influencer is known to be unpaid, the numbers increase to 69 percent of Hispanic teens, 59 percent of Hispanic adults, and 48 percent of their non-Hispanic counterparts. 5) When Considering a Purchase, Teens Value Word of Mouth and Then Shop Online When it comes to purchase consideration, word of mouth is most important followed by advertising and online inspiration. In the final path to purchase phase, 74 percent of Gen Zers and their parents go online, primarily to search for more information or head to a marketplace sales site. Fifty-five percent will go to Amazon, and 35 percent of NHB and Hispanics will go to Walmart compared to 28 percent of NHW. Surprisingly, 10 percent of Hispanic teens will go to Target, compared to only 2 to 3 percent of other segments. 6) Gen Zers Are All About Style, Savings and Sustainability For many teens, style counts more than price, especially among NHB to the tune of 43 percent compared to 37 percent NHW and 33 percent Hispanics. Shops like Shein, Zara, Asos and Fashion Nova have wooed teens with throwaway fashion at low prices capitalizing on teens' love for buzzy online celebrities and unpaid content creators mostly on Instagram. Teens are also adding to their style with affordable vintage, fueling thrifting fervor. Seventy-four percent of Gen Zers and their parents 13 to 49 love to thrift, skewing mostly female among non-Hispanics and gender neutral with Hispanics. Methodology & Funders: The study received financial or operational support from Kantar, ThinkNow, ViacomCBS and Univision. Quantitative research came from 2,418 13-17s (Gen Z) and 25-49 parents of kids 8-12 (65% Millennials/ 35% Xers) with equal sample representation of Hispanics (HISP), non-Hispanic Blacks (NHB) & non-Hispanic Whites (NHW) from January 2020 to February 2020. Qualitative interviews with 54 respondents (36T/18P), in-home pairs (HISP/NHB/NHW) and two Gen Z multicultural workshops (HISP/NHB/NHW/Asian-American/Other) For more information, visit culturemarketingcouncil.org