As brands managers and marketers grapple with Millennials, a far more influential group of consumers is emerging: the Gen Z'ers. Gen Z'ers -- those individuals born between 1998 and 2008 -- are more culturally, environmentally and socio-economically aware than their predecessors. In just three years, Gen Z will represent 40% of US consumer spending! They are also positioned to become the single largest group of consumers worldwide.

Much is at stake for brands that wish to stay relevant in this new world of increasingly intuitive and intelligent individuals. Like any successful relationship, the ability to build meaningful connections with Gen Z requires a nuanced approach. Gen Z'ers have a shorter attention span than most, but are willing to explore a brand relationship if they feel an authentic story is being told, as long as that the story is not outside the bounds of what the brand stands for. So how does this relate to VR?

According to Roy DeYoung, SVP of Creative Strategy at PMX Agency, VR is the next frontier for building authentic experiences, particularly for Gen Z. "VR allows brands to explore more immersive, connected relationships with consumers," DeYoung explains. According to International Data Corporation's (IDC) study "Worldwide Quarterly Augmented and Virtual Reality Headset Tracker," 8.1 million virtual and augmented reality headsets were shipped to consumers around the world in 2016 alone. By 2021, that number is predicted to grow to 60 million, reflecting an increasing interest in this emerging tech.

"We've heard much about the possibilities of AR and VR, but even as we near the second half of 2017, there have been very few successful executions of these new realities that add a unique value, and do not disrupt the consumer's experience. Using clearly defined intention, creativity, and precision in both design and execution, VR can become the pathway for not only connecting brands and their followers, but bridging an experience more directly with buying, donating or whatever the intended method of engagement may be," DeYoung says.

With all that we know and continue to learn about Gen Z, here's why DeYoung thinks VR could -- and should -- be the key that brands need to establish loyal relationships with this empowered audience:

1. Gen Z is the first true "digital-native" generation

"Generation Z has never known a world without smartphones," DeYoung notes. "They grew up in a more connected, more technologically sophisticated era than any generation to come before. This has critical implications for marketing tactics focused on reaching Gen Z'ers. VR technologies like Google Cardboard, the Oculus Rift and Samsung gear have found their way in the lives of Gen Z, with 41% having tried VR, and 12% who make use of it on a daily basis (Q4 2016 study of 300 Gen Z'ers by Sabre Labs: "Emerging Tech in Travel 2017")."

As an up and coming technology, it might be enough to pique the interest of Gen Z consumers - but to really maintain their attention and establish a meaningful connection, the application of VR must be done right. "This means storyboard, design, production and other elements must be high-quality and reflective of the brand," DeYoung says. "Remember, Gen Z'ers are quite the content curators themselves, with limitless content experiences available to them. The quality of the VR experience must stand out against their expectations of technology-oriented brand experiences. With decreasing attention spans, and more technological distractions, focusing on the storytelling aspect is where marketers can win with VR and Gen Z."

2. Gen Z is more culturally and socially aware, and craves community connection

Understanding the multi-cultural and communal perspectives of Gen Z is essential for marketers, and in turn, affects the tactics used to engage them. "Because they don't like to be boxed into specific categories or stereotypes, any experience that creates a demographic silo will not work with Gen Z. Luckily, marketers can leverage this insight to build the right content experiences for these consumers, which, leaves a lot of room for creative freedom and inspiration in the emerging VR world," says DeYoung.

"Gen Z wants to feel a strong connection with society, and more importantly, to feel that they are making an impact for good. For a nonprofit organization, or a company that leads through corporate philanthropy, virtual reality can put Gen Z'ers directly inside the environments they are most passionate about, from a remote village in a Third World country to a bee farm in Vermont. When Gen Z can't be physically inside the experience, they will crave a connection with the causes that matter to them. It's exactly that connection that can be achieved through VR. For instance, take what Häagen-Dazs did with "The Extraordinary Honey Bee" or what Pencils of Promise accomplished through virtually transporting donors and other viewers to a classroom in Ghana," notes DeYoung. This is the type of content that will positively impact community-driven Gen Z -- leading with emotionally resonant storytelling.

3. Gen Z is experience-driven

"Millennials are members of the first generation more interested in experiences than acquiring more "stuff". Gen Z'ers are even more interested in experiences beyond the brand or the product," observes DeYoung. "Virtual reality is becoming a unique experience. In its best iteration, it gives consumers access to a world where they would not likely go otherwise. It connects and inspires them to immerse themselves in new creative universe. While Gen Z may cherish vintage boots, or a bomber jacket from the Vietnam War passed down by their grandfather, they also cherish memorable and exotic experiences. The more memorable the experience, the more likely Gen Z'ers are to share it with their social spheres."

As retailers continue to cope with the realities of changing consumer needs and desires -- which has had a sharply negative effect on many brick and mortar businesses -- blending technology into traditional retail shopping environments may prove essential.

In March of this year, Walmart made major investments in its newly created innovation hub, dubbed "Store No. 8", where it will explore applications of augmented and virtual reality, machine learning and artificial intelligence. "For Gen Z, the in-store experience is still integral to their relationship with brand, but retailers must figure out how to blend digital and virtual experiences with the physical world if they wish to capture Gen Z'ers attention and create connection to their brand," DeYoung concludes.

Published on: Jun 27, 2017