Often dubbed the “post-millennials” and “iGeneration”, Gen Z is now the largest generation of consumers – ever – with spending power that’s far more impactful than their most recent Venmo transfer.
Few people understand the differences between millennials and Gen Z. But the reality is, they are worlds apart. When it comes to the marketing preferences and buying decisions of each, they could not be more in contrast.
Though the exact year that separates millennials from Gen Z is often contested, the attitudes, beliefs and behaviors that separate the them are not — especially when it comes to money. According to Forbes, Gen Z is already on track to account for up to $143 billion in direct spending by 2020. But just as important as their spending as a cohort is their influence on others. A report from CASSANDRA found that 93% of parents say that their children — the generation that succeeds millennials — influence family and household spending.
Marketers who want to capture the attention of this generation (and those they influence) must recognize how different they are from the millennials that have been center stage. Gen Z is arguably the most entrepreneurial, digitally fluent and socially provoked group of consumers we have seen. Like their millennial predecessors, they have high expectations and demands. But, if for some reason these criteria are not met, their reaction will not be what brands are accustomed to seeing from millennials, who might offer them a second chance. Gen Z is less likely to grant brands the same redemption, which is why it’s important to understand exactly who they are and, of course, who their millennial counterparts are not.
Bargains and ads mean very little
This generation is far less price-conscious than previous generations. One might argue that the frugality of Gen Z is incomparable to millennials, who grew up rattled by two recessions and the events of 9/11 — events that made them exceedingly cautious and content on a budget. But history and its effects are relative. If anything, millennials’ resulting favorability of experiences over materialism is only fodder in explaining the shopping behaviors of Gen Z.
Research from Euclid Analytics found that 43% of Gen Z is likely to compare prices and “bargain shop” compared to 49% of millennials and 51% of baby boomers. Ultimately, Gen Z is aware of recession-era struggles, but removed enough that bargains and deals matter less. In the same vein of breaking with tradition, ads are also less effective among Gen Z. According to the Huffington Post, 71% of millennials claimed to follow an ad before making a purchase, compared to 59% of Gen Z who do the same.
Quality over quantity — and quick!
Most research has shown that millennials will pay for something from an established and/or reputable brand. Further, if that brand’s product or service aligns with their personal values, they’ll likely become a long-term customer. Gen Z is different. In most cases, they don’t care about the popularity of a brand, or finding one that they can return to. Instead, they care only that something is high-quality and bolsters their image, both online and offline.
This can be good news for startups and small businesses. If a product or service meets their needs, they’ll probably buy it no matter who you are — especially since they aren’t necessarily price-conscious. But, because of their digital fluency, companies must be hyper-aware of the user experience. Apps and websites must provide an easy, seamless experience at every touchpoint. In fact, Forbes found that half of all Gen Z shoppers care most about finding things quickly and efficiently. If it’s slow or difficult to navigate, 60% will ditch the site or platform.
Nothing beats IRL
Gen Z isn’t just a generation that grew up with the Internet — they grew up with it in their pockets. This widespread access of information translates to a consistently well-informed shopper. And while it’s easy to assume that the products showcased on Instagram are an efficient click away via Amazon Prime, Gen Z knows better than any other how to distinguish something that’s been photoshopped or falsified. As a result, they’re walking into stores to see, touch, and taste for themselves. They value a tangible brand experience because it is the yin to the online world’s yang. It allows them to handle the product IRL (“in real life” for those of us over 40) and try before they buy.
Of course, this doesn’t mean that online is the enemy — in fact, Precision Dialogue found that 46% of Gen Z consumers research products and services on their mobile devices before making purchases in store. Despite the hype, the truth is, smart brick-and-mortar is alive and well; it just needs to work harmoniously with its online counterparts. Gen Z consumers expect more from both avenues. Ultimately, it’s the brand’s responsibility to provide a singular, engaging, and unified shopping experience.
Don’t’ sell something… mean something
The Internet has grown and become mainstream alongside the millennial generation, whereas Gen Z was born into an already-online world. In all regards, their thinking and interactions are more diverse and globalized than previous generations, millennials included. A study found that 60% of Gen Z wants to have an impact on the world compared to 39% of millennials. Their buying decisions reflect this ambition when it comes to any and every issue they advocate for. In short, they value ethics and companies with purpose. If your brand has both, they’ll be motivated to support your company and share your story.
Gen Z trusts brands that reflect real people and real situations. They expect brands to be more in terms of quality and convenience and to do more in terms of social responsibility. Most importantly, as perhaps the most sophisticated group of consumers in history, they’re not a generation that’s going to help resurrect brands who fail to meet these standards. In the end, smart brands will resist lumping Gen Z in with millennials – there is little doubt that they have their own unique identity. Those companies that establish relationships with these high-impact consumers early will reap benefits for years to come.