By Greg Zakowicz, senior commerce marketing analyst at Bronto
⏰ 6-minute read
While millennials have hogged most of the attention from marketing analysts lately, Generation Z deserves a look for its tremendous spending power.
This generation, while spanning 13 formative years in age, shares five characteristics that unite its members.
These five interrelated traits are critical for marketers to remember, as each has the power to prompt profitable change for your business.
While many recent conversations among marketers have centered on millennials, Gen Z has gone largely overlooked.
But it shouldn’t stay that way. This younger generational cohort possesses immense direct spending power, with some estimates as high as $143 billion by next year. (This figure doesn’t include indirect spending, aka or the generation’s influence on family and household purchases.)
With so much money on the table, now is the time to focus on this generational cohort. But first:
Who is Gen Z?
Defining cutoffs for generational cohorts is an imperfect science, but marketers seem to have settled on birthdates between 1997 and 2010 for Gen Z, according to the Pew Research Center. The oldest members of Gen Z will turn 22 this year, while the youngest will turn nine.
Fourth graders may not have a lot in common with college graduates, but nevertheless there are commonalities that unite this cohort. I have simplified Gen Z into five overarching characteristics, all of which interact with one another. While each characteristic has plenty of nuance, a baseline understanding will be important to successfully reach this demographic as a marketer.
Members of Gen Z have never lived without smartphones--or Amazon Prime, Facebook, Starbucks and Uber for that matter. They grew up using phones to order goods, hail rides, make mobile in-store purchases and use other on-demand services.
They depend on their phones--a lot. Sixty-one percent of digital natives use their phones for five or more hours each day, while only 2 percent use them for less than an hour, according to a study from The Center for Generational Kinetics. Thirty-one percent are uncomfortable with being away from their phones for 30 minutes or fewer.
Sixty-one percent of digital natives use their phones for five or more hours each day.
2. Social media matters to Gen Z.
Gen Z-ers know how to search for and digest information. For retailers, connecting with Gen Z means you have to meet their needs quickly, in a mobile-friendly way. You need mobile-friendly marketing emails and a mobile-friendly company site with helpful content. If you have brick-and-mortar stores, consider adding mobile payment options to them.
Social media is the standard mode of communication for Gen Z, just as landline phones were for previous generations. The most popular social networks for this group are YouTube, Instagram and Snapchat. Facebook and Twitter are used, but to lesser degrees than in previous generations.
The visual-first nature of social networks can influence Gen Z’s purchases. Seventy percent of Gen Z consumers have posted pictures of apparel they like on social media in order to get opinions from friends and family, with 41 percent deciding whether to complete the purchase based on the feedback, according to the HRC Retail Advisory.
For brands, simply posting promotional content will not win Gen Z over. Brands must interact with Gen Z, producing helpful content (i.e. how-to videos) for them, inspiring them (i.e. posting uplifting stories or quotes) or answering their questions and responding to product feedback.
Nike, one of Gen Z's favorite brands, posts uplifting photos and captions on Instagram.
It’s also worth noting that social media is Gen Z’s preferred customer service channel: Thirty-six percent use it for simple queries and 26 percent are okay with using it for complex queries.
Seventy-three percent of Gen Z follow at least one brand on social media, compared to 64 percent of millennials, per The Center for Generational Kinetics. Fifty-two percent follow 10 or more brands, and Instagram is their preferred channel for doing so."
Fifty-two percent of Gen Z follow 10 or more brands on social media.
Positive brand interactions with Gen Z on social media can drive in-store traffic: Sixty-nine percent of them will visit a store based on a retailer’s social media posts, according to Mediakix.
3. Authenticity matters to Gen Z.
Real, authentic, unique: They’re all descriptions Gen Z understands. Eighty-four percent of Gen Z trust companies more if they use real customers in their ads, according to WP Engine, a company that manages brand presence online. Sixty-seven percent prefer seeing real people in ads, Mediakix reports.
Gen Z has been on the internet virtually their entire lives, so they’re prone to tune out ads. This probably explains why 53 percent of them told CivicScience that social media comments have more influence on their purchases than TV ads or online ads.
Gen Z expects authenticity not only from ads but also from brands themselves on social media. They don’t want corporate jargon; they want brands to sound light-hearted. They want a brand that can poke fun at itself and others, as long as the joking isn’t derogatory. Wendy’s, Taco Bell and Burger King are known for jabbing each other social media in a lighthearted way that sings with Gen Z.
Wendy's is famous for poking fun at McDonald's on Twitter.
4. Gen Z stands for something, and they expect brands to do the same.
Sixty-nine percent of Gen Z are more likely to buy from a company that contributes to social causes, according to WP Engine. Like millennials, Gen Z-ers desire to make the world a better place. Heck, they even filed a lawsuit against the government because of global warming.
And it’s no longer enough to simply say your brand is giving back. Gen Z wants to see companies be and do better. Accordingly, the websites of Toms, Bombas, Warby Parker and Boxed Water showcase exactly how these brands’ models of giving have made impacts.
The website for Tom's invites customers to hear stories of how their purchases have impacted change.
5. For Gen Z, shopping is a complete experience.
The entire shopping experience matters, from value to convenience to shipping policies. These consumers grew up in an on-demand, quick-delivery and free-shipping world.
And while it’s not the only factor, price does matter. This generation’s “income” is mostly from allowances or part-time jobs, and some are just entering the workforce. Correspondingly, these consumers will spend more for better-quality products, but they will also “trade down” if they feel a lower-quality product is sufficient. If you’re not the cheapest product on the block, or your quality-to-price relationship is off-balance, finding other ways to differentiate your brand will be important.
As for how they shop, more than 65 percent of Gen Z prefer to shop in-store most of the time, per an IBM study. When do do choose to shop online, it’s mostly due to price, convenience and increased product selection. This jives with what we know about consumers on the whole: Nearly 97 percent of them agree there is a need to go into physical stores, according to a recent survey by Oracle NetSuite.
Sixty-five percent of Gen Z prefer to shop in-store most of the time.
Even though Gen Z grew up with free delivery as a staple, only 9 percent said it’s the primary reason they choose to shop online. Even so, retailers may be able to entice Gen Z-ers to pay for quick shipping: Sixty-three percent of Gen Z says they’d pay for express shipping, and 71 percent would add more products to their online shopping basket to meet the spend threshold for 1-3 hour delivery, according to research from shipping provider Neopost.
As a brand, you can bet your shipping experience matters to Gen Z. Neopost found that 71 percent of Gen Z-ers are more likely to repeat shop with a retailer after a positive shipping experience, while 56 percent are less likely to do so after a negative experience.
🌱 The bottom line
At the end of the day, I take the same stance with Gen Z as I do with millennials: They are people, and timeworn best practices for dealing with people will win with them too. By improving their experience with your brand--whether in your website experience or product value--you improve the experience for every shopper, regardless of generation.
Making the shopping experience easier for all of your customers is never a bad thing to hang your hat on.
🎙 Learn more about improving your marketing to better engage Gen Z at SuiteWorld19, a conference about growing beyond in business.
📚 More on marketing to Gen Z and millennials:
Marketing to Millennials Is Making Us Miss the Obvious
B2Anyone Marketing Tactics for Digital Natives
When Marketing Successes Go Sideways