500 Billion Reasons Why Brands and Retailers Must Adapt Now to Embrace Generation Alpha

Brands that connect with Generation Alpha will find their influence on their parents’ purchasing decisions will pay dividends

They are Gen Z’s successors and only just turned 12, but Generation Alpha is already a prime target for brands and marketers. And those retailers who fail to tune in to this new generation will lose out on its spending power and influence, as it truly begins to blossom. So after GetWizer presented a webinar to detail a significant study on the retail habits of Generation Alpha and its parents, we decided to take a deep dive to find out why brands should care.

If Generation Alpha is not on your radar, it should be. Even though it represents kids born after 2010, it is set to become the largest generation of consumers in history, reaching two billion by 2025. With this size will eventually come immense wealth, when it will wield a purchasing power of $500bn per year, the biggest ever seen.

While their full economic might will only come to fruition from 2030 onwards, brands should now be investing the time to build the loyalty needed to capitalize and be in pole position when they reach maturity. 

Already Impacting Purchasing Decisions 

But even now Generation Alpha and their millennial and Gen Z parents offer a lucrative proposition. They are already influencing the purchasing decisions of their parents, according to research by the NRF (National Retail Federation). In fact, a total of 36% of parents say their children even influence purchases for the home. This appears to have grown from previous generations, with 80% of parents surveyed by the NRF saying they involve their children far more when buying goods than their own parents did with them. 

But those looking to connect with and impact Gen Alpha will face a strong technological challenge. More so than Gen Z, this entire generation is being fed a diet of digital technology, smartphones and instant connectivity. Remember, this is the first generation to be born in its entirety in the 21st century. So, technology will always be a key tool when it comes to engaging them.

Pandemic Increased Their Digital Dependancy

Already raised on screens, the pandemic boosted their digital existence even further, catapulting them into a world of virtual activities, school lessons and play dates. But their screen experience is not a passive affair like generations before them. Their digital and virtual worlds are where they expect to interact and collaborate. This behavior has evolved from their use of video games from a very young age, where they learnt to be active participants in the digital sphere. They see technology as a means of increasing their connectivity with the outside world (especially given their experience of Covid), to develop community and enrich their social skills. 

They inhabit a world where the lines are blurred between their physical and digital experiences, where smart devices and high-speed internet reign supreme. Brands looking to grab their attention will need to understand this and capture their imagination using technology, in which they should be active participants. 

Brands They Care For Need to Be Issue-driven 

But once you are able to tune into their digital channels and mindset, how you communicate with them will be even more critical. Generation Alpha cares deeply about issues, much more than their Millennial parents ever did. For such a young age, a remarkable 96% already believe that people should be treated fairly no matter what they look like and 95% are already Climate Crusaders.

“We talk about sustainability, climate, nutrition, work, gender diversity, and race. These are topics that they bring up themselves,” says Abdaal Mazhar Shafi, co-founder of UpstartED, an organization focused on empowering youth to discover their potential to make an impact. “They want to shed light on these issues that have been overlooked or even silenced in some ways to try to improve life for all.” 

While other generations felt a sense of social responsibility and a desire to protect planet earth, “These kids have had it from day one,” adds Shafi.

Brands will need to attune themselves to Generation Alpha’s strong and solid set of opinions regarding the world around them. “For brands to build relationships with this group, they’ll need to embrace diversity and recognize it will take much more than a ‘one size fits all’ approach,” said Laura Macdonald, EVP and Head of Consumer North America at Hotwire.She highly recommends brands start to develop a granular understanding of their Gen Alpha audience and their opinions. It is only by creating such an awareness that will future proof yourself for the tidal wave of potential this new generation offers.

Brands that are able to connect with Generation Alpha in a meaningful way will find, even today, their influence on their parents’ purchasing decisions will pay dividends. However, it is their development towards being the most educated, most diverse, richest and largest generation ever that will be the true prize awaiting brands that evoke a sense of loyalty from Generation Alpha.