Have you noticed that different generations behave in distinctive ways?
While their behavior may vary slightly, yet the impact on your business can be significant especially as it relates to your marketing.
As Gen Z starts to enter buying stages where they’re more influenced by their peers than their parents and other family members, this becomes more important to understand their attitudes and purchase behavior.
In this article, we’ll take a deep dive to help you better target and engage with Gen Z as consumers and as employees.
Table of Contents
Who Is Gen Z?
How Is Gen Z Defined?
Born between 1995 and 2010, Gen Z grew up as digital natives. They have always had digital tools available. Many got their first smartphone just before their 12th birthday and it’s been their device of choice for media consumption ever since. This allowed them to become self-reliant, connected and collaborative as they watched the world operate at speed, scale and scope.
In terms of population numbers:
- Gen Z will make up 20% of the population in 2023. So they compose roughly the same percentage of the US population as millennials and Gen Xers.
- By 2025, Gen Z will surpass Gen X in terms of the number of US digital buyers. (Source: Insider Intelligence, February 21, 2023)
What Gen Z’s Search For The Truth Means
Based on their search for the truth, McKinsey calls Gen Z “TrueGen”. They define Gen Z as “a hypercognitive generation [that is] very comfortable with collecting and cross-referencing many sources of information and with integrating virtual and offline experiences.”
Similarly, Forrester Research found that Gen Z cares about the truth, especially post-pandemic when truth has been under fire.
Research by Stanford’s Center for Advanced Study in Behavioral Sciences defines Gen Z as: Self-driving and caring deeply about others;
66% of Gen Z members believe in causes and interests to create community rather than by economic background or educational level.
52% feel it’s natural for every individual to belong to different groups. They aim to build a diverse community since they value individual expression and avoid labels.
Members of Gen Z value flexibility, relevance, authenticity and non-hierarchical leadership.
- 65%of Gen Zers value knowing what is going on around them and being in control. As self-learners, they prefer to get their information online. As a group, they’re more comfortable absorbing knowledge online than in traditional institutions of learning. They take an analytical and pragmatic approach to decision-making and institutions.
- Members of Gen Z believe in using communication to resolve conflicts and improve the world. This includes the work necessary to address the major issues they’ve inherited such as climate change.
In the US, Gen Z is the most racially diverse generation to date. Roughly half of them are non-white. (Pew Research May 14, 2020)
Roughly 3 out 5 Gen Zers enroll in college. This makes them the most educated generation in the US. Further, 2 out of 5 Gen Zers have at least one college-educated parent.
Further, 42% of 17 to 23-year-olds are employed in either full- or part-time jobs or as freelance workers. Since they grew up during economic stress, they realize that they need to save for the future and prefer job stability and regular employment to high salaries.
Actionable Marketing Tips
- Integrate a strong digital component in your marketing strategies to reach this generational segment.
- Appear and be available on the online platforms Gen Z uses. 80% of shoppers checked online resources before buying according to research by Alter Agents. On average, Gen Z respondents consulted 19 resources. (Source: Forbes, August 110, 2022)
How Does Gen Z Use And Consume Social Media?
Similar to Millennials, half of US Gen Z buyers shop on social media. By contrast with older generations, this is a significantly higher proportion than Gen X and Baby Boomers.
In terms of social media, Gen Zers prefer YouTube and Instagram.
Gen Z customers buy on social media because it:
- Aids product discovery. To attract Gen Z’s attention, spotlight your products on the platforms, in the content formats, and via the devices they prefer.
- Calls attention to offers, deals and coupons. At a minimum, test special Gen Z offers on select social media platforms.
- Facilitate purchases via social media platforms. 58% of Gen Zers purchased something they saw on social media. (5WPR, 2021 Consumer Report) Remember Gen Z buyers want a seamless buying experience!
Actionable Social Media Marketing Tips
- Skip the one size fits all approach when posting content across social media platforms. Instead, tailor your content marketing and advertising to meet each social media platform’s specific audience so it resonates with Gen Z shoppers.
- Use short videos and mobile-optimized content to engage short attention spans.
- Spotlight how your brand is genuine and credible because transparency and accountability matter for Gen Z.
- Invite Gen Z followers to contribute user-generated content (UGC).
What Is Gen Z’s Consumption Behavior?
Gen Z Spending Power
Gen Z had $360 billion in disposable income based on November 2021 forecasts. (Source: Bloomberg – November 17, 2021)
Gen Z views consumption and brands to (Source: McKinsey):
- Gain access rather than possession;
- Express their individual identity; and
- Show their ethical concern.
“The reality is [Gen Z] cares about connections and community — we know this because they prefer to shop in situations where they can chat with their friends, engage with store associates, and feel confident that their purchase decisions are supporting businesses that treat employees well.” according to Jeremy Baker, chief technology officer and co-founder of Retail Zipline. (Source: BusinessInsider January 28, 2020)
To reach Gen Z, traditional retailers and brands will have to compete with the rise of new direct-to-consumer (DTC) and e-commerce brands that offer a more intimate and personalized shopping experience.
Actionable Marketing Tip
- Take the time to understand the Gen Z shopper since they differ from other generations. Where possible, talk to these shoppers in real life.
How Gen Z Shops
According to the Z-Tail Report Gen Z Shopping December 2019 based on a survey of over 1,000+ US consumers between 18 and 24, Gen Z accounted for 40% of retail purchases. Gen Z prioritizes electronics and technology (52%), followed by health and wellness (37%), and beauty, cosmetics & personal care (36%). (Source: 5WPR Consumer Report, 2021)
Gen Z consumers are their own persons! Less than one-tenth of Gen Z respondents seek fashion style inspiration from celebrities. Almost three out of five Gen Z respondents don’t copy trends they view on Instagram.
Yet 7 out of 10 Gen Z respondents take fashion advice from store associates at retail. Further, two out of five respondents engage with a sales associate if they like what they are wearing. More importantly, this matters for retail sales! About one-fifth of respondents report that having a genuine relationship with a specific associate influences their purchase process. Two-thirds of Gen Zers prefer to interact with sales associates when they take a hands-on approach.
About four out of five Gen Z respondents are more likely to buy from brands that use ethical business practices. Of these respondents, two-thirds state fair treatment of employees as a key motivator. They also value:
- Eco-friendly packaging (59%);
- Ethical sourcing (50%);
- Donating profits to charity (48%); and
- Vegan products (24%).
Almost three out of five Gen Z customers prefer shopping in stores with a longstanding presence in a particular location. This shows that these retailers support the community. By contrast, about a tenth of Gen Z respondents will shop in pop-up shops and other short-lease stores.
Brand authenticity and alignment matter to Gen Z customers, both female and male. This extends to marketing that is authentic marketing and centers around “real” people.
- 60% of women and 64% of men are more likely to purchase from brands committed to keeping photos minimally photoshopped;
- 41% of women and 25% of men prefer brands to include the use of plus-sized models; and
- 48% of women and 29% of men prefer brands to showcase multi-racial models.
Actionable Marketing Tips
- Show your brand authenticity. Woke-washing to make your business look good for Gen Z will backfire. Your brand must act consistently across your business from your employees to your marketing.
- Make sure that your brand’s claims fulfill their promise or your Gen Z customers will find out about any problems.
How Does Gen Z React To Brands?
Brands’ Social Responsibility Matters To Gen Z
55% of Gen Z indicated that a company’s social responsibility and its related reputation either influences or highly influences their purchase behavior. As 19 year old, Rob Felton of Georgia says:
“I’ve started to care less about the products they sell and more about their message to consumers. Are they reflecting the emotions of the world? Do they care about being direct and honest with consumers, even if it’s uncomfortable?” (Source: Forrester research via AdAge September 14, 2021)
Yet Gen Z members expect brands to use their societal influence for the good of the community. This is underscored by Zafi Smith, a 19-year-old from Massachusetts:
“It is your job as a brand to come through right now because you have such a large impact on society. When a brand like Nike says, ‘This is what it is,’ that can go really, really far.” (Source: Forrester research via AdAge September 14, 2021)
Brands must back their words with action. For Gen Z, more than just talk and content, brands have to take action and it must come from within their organization. As Harvard junior and founder of Crimson Connection, a Gen Z consulting firm, Michael Pankowski advises:
“If you want Gen Z’s trust as a brand, we need to see that you’re legitimately backing your words with actions.” (Source: Forrester research via AdAge September 14, 2021)
Brands must equalize with empathy since Gen Z pays attention to and spends money on brands that care about them. They support brands that amplify voices that aren’t getting heard. Also, they seek brands like Patagonia, Allbirds, Ben & Jerry and Dove because they prioritize purpose with their influence, action and empathy.
Gen Z Goes Shopping
American Gen Zers choose to buy based on these 4 key factors (Source Mc Kinsey March 20, 2020):
- Prefer to shop at retail stores. Since they’re always connected, they’re always shopping. Also, they buy across devices, formats and channels or platforms based on the context of where they happen to be.
- Seek to be different from everyone else rather than fit in. Brands to Gen Z matter since they’re always on the prowl for the next unique object. As a result, From 2019 to 2020, the percentage of Gen Z who chose to be associated with a brand because it was cool dropped 6 percentage points.
- Want experiences to enrich their everyday lives including hobbies and home entertainment.
- Are influenced by social media for purchase decisions.
Since Gen Z takes a collaborative approach to consumption. So brands need to rethink their value models to provide this segment of customers with platforms of products, services and experiences that aggregate and connect customers around brands.
This translates to building communities and fans focused on the needs and wants of Gen Z. To build your audience, create more direct relationships with consumers and new distribution channels, namely support communities and brand fans.
Gen Zers view consumption as a means of self-expression. As a result, they’re willing to pay a premium for personalized products that highlight their individuality. Yet at the same time, “63% of consumers McKinsey surveyed said that recommendations from friends are their most trusted source for learning about products and brands.”
But realize that the old distinction between male and female has blurred. 48% of Gen Zers value brands that don’t classify items as one sexual identity or the other.
Deliver what your target Gen Z customers want based on the context of location, time and device they’re using at the time. This includes when they’re in your physical location or elsewhere. So omnichannel marketing must meet them where and when they’re ready to buy.
For your Gen Z consumer, the difference between online and offline has converged. More than ever, they expect to consume products and services any time and any place,
Actionable Marketing Tip
- Provide your Gen Z audience with a consistent experience across platforms, locations and devices. They want to be able to reach you via omnichannel on their terms.
Gen Z Conclusion
As members of Gen Z start their early purchasing years, you have to be ready to understand what they want and need on their terms.
Having grown up during difficult economic and social times, this diverse generation knows that it has to work to achieve its goals. Further, they’re ready to do their own research and figure out what’s needed.
More importantly, they expect your business to be transparent and socially responsible if you want to win their business.
So now is the time to build your relationships and community with this generation which is predicted to have the most buying power to date.
Editor’s Note: This article was first published on December 7, 2012, under the title, Gen Z Are Mobile Mavericks (What You Need to Know). It was significantly updated with new data and insights as of April 3, 2023.
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