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Z Brands and the next wave of Direct-to-Consumer disruption
There is a new breed of brands in town. They are gaining traction and accolades rapidly and as they grow, they are likely to present real challenges to established brands. We call them Z brands ―a growing set of direct-to-consumer brands that were created for Generation Z and are forming the “next wave” of DTC disruption. To name a few look up Billie razors, Kinship Beauty, Morhphe, Gen Z Water, Parade underwear, and Cider. While very different from each other, these brands have one thing in common; they understand that a generation that is defined by individuality, authenticity, connectivity, and purpose is looking for something different, and they are ready to deliver against the broad gamut of Gen Z’s wants and needs using a “formula” that evolves around four pillars.
The Z Brands “formula”
Affordable prices that address Gen Z’s cost consciousness and their constant search (literally) for the best value for money. Growing up during the 2008 recession, Gen Zers have always been very cautious with spending but in a post pandemic world we expect this trait to be even stronger.
A purpose that is bigger than simply delivering a bottom line. Z brands are purpose driven, and they stand up for causes that Gen Zers care about. They not only talk purpose; they walk the talk, make real impact, and have the receipts to show for it. Cider, for example, is all about reducing waste in the fashion industry through a zero-inventory model. Billie Razors is being vocal about the Pink Tax that is applied to feminine care products. Gen Z Water is about savings the environment with its aluminum bottles, and Parade Underwear supports planned parenthood. Aligning with purpose driven brands make Gen Z feel good about their purchases and allow them to express their values.
A distinct visual identity that is often quirky and raw, some may even say odd. No matter how you look at it – Z brand’s branding doesn’t play by the “advertising industry rules” or adopt the “look of the moment”. Gen Zers like to create their own rules and Z brands play right into that. From Cider with its colorful imagery and flower sketches to Gen Z Water with its quirky bottle design and a home page full of flying GIFs, Z brands are the embodiment of “imperfect is the new perfect”.
Authentic Marketing that is based on inclusivity (models of all colors, body shapes and sizes, sexual orientation and gender expression – see Parade Underwear), transparency (full ingredient lists like you get with Impact Snacks.), messaging and imagery that reflect Gen Z’s lifestyle and culture. For example, Morphe cleverly addresses Gen Z’s need to feel unique with its communication. “We aren’t your average beauty brand and that’s just the way we like it. Why fit in when we were born to stand out?” says its website. And of course, casting “real people” in advertising or collaborating with Gen Z content creators and influencers are just part of the “formula” (see Morphe 2 collab with the D’Amelio sisters)
If we learned anything from the “first wave” of DTC disruption (think Glossier, Kind, Warby Parker, IT Cosmetics), we know that change can happen very quickly. Some companies will take an approach of “wait and see” and eventually acquire some of these brands for big $$. Some will create their own version of Z brands.. One thing is certain: generic value propositions that are not tailored to Gen Z simply won’t cut it with these demanding consumers.
What is your strategy?
Gen Z is Changing Everything!
Note: A version of this article was published at WWD The Outside View: ‘Z Brands’ Could Be the Next Direct Disruptors – WWD