Do You Know Who Gen Z Is? You Should.
Generation Z, also known as Post-Millennials, are today’s teenagers, making up one quarter of the U.S. population. At a staggering 77 million, they are loosely defined as those born between 1996 and 2011, with the oldest getting ready to graduate from college. They are also the consumers that brands need to invest in now.
Gen Z’s perceptions of the world have been shaped by instability: the recession, the Occupy Wall Street movement, global warming, and the “war on terror.” Many of their Gen X parents and millennial siblings have made it to the other side of the economic meltdown, and they believe there is always a way to persevere.
While Gen Z remains positive about their future, it does not mean they have forgotten their parents’ and siblings’ struggles during the economic crisis.
Brands are going to have to work harder for their share of Gen Z’s spending power.
According to a study completed by Lincoln Financial, they are saving far earlier than older generations: 60 percent of them already have savings accounts, and 71 percent say they are focused on saving for the future.
Their top three priorities are getting a job, finishing college, and saving money for the years to come. They care more about the value of what they buy than the price. Business Insider highlighted the potential spending power of Gen Z: “Despite having ultra-low incomes … Gen Z spends the highest share of their income online: 9%.”
Quite literally, the multibillion dollar question becomes, where should brands focus and invest for their Gen Z commerce strategies?
Millennials were the “internet pioneers” and continue to celebrate technological innovation, whereas Gen Z doesn’t remember life without it. To them, technology is a tool and innovation is an expectation. Millennials are more forgiving when a website fails — they think it might be something they did wrong. Gen Z does not have a tolerance for unreliable technology.
A recent study completed by Ernst & Young found that “Sixty-three percent of Gen Z-ers polled said that they shopped online because it ‘saves [them] time’ and, go into physical stores because it’s ‘functional’ — not because it’s born out of ‘true desire’.”
This consumer group is well aware they can shop for products just about anywhere. Brands will need to answer to Gen Z’s call for utility and efficiency. This means moving away from cumbersome legacy technology and investing in flexible platforms and site performance strategies. If not, Gen Z will move on and spend their money with brands that respect their desire for utility.
Gen Z already knows everything about your brand. Information is infinitely available, and they research everything because they can. Brands such as Aerie by American Eagle, Everlane, and Toms are raking in profits by taking an authentic approach.
Gen Z aligns themselves with social causes and transparency. (See our related blog post on these topics, Ethical Consumerism & Ecommerce: The Perfect Pair.) It will likely be a slippery slope for the brands who do not. Growing up watching the Occupy Wall Street movement has made them cautious of the establishment. So the question I ask of brands is, do you want to be a part of the establishment or a part of the change? Gen Z will be researching and looking for your answer.
From a young age, Gen Z has been online engaging in conversations with many people from all over the world. Conversations online often come with a level of anonymity. These faceless interactions create a mutual respect while also encouraging and fostering an environment where mature subject matter thrives. Brands need to recognize that this generation wants to be spoken to with respect, perhaps even “plain-speak.” Over-the-top marketing copy is likely not going to resonate with this generation. Brands will need to develop an authentic voice knowing that this generation will see through the fluff.
Being online, Gen Z has immediate access to many different cultures and movements, creating opportunities to self-identify with many. Because of this and social media, teens are now self-identifying with influencers rather than a brand itself. This is very different compared to millennials who grew up using brand labels as a way to identify. Being a millennial myself, I remember the days of wanting to buy Abercrombie & Fitch just for the moose label. Brands need to recognize this shift and begin thinking through the voice of their brand and how to best distribute their marketing budgets to better engage across social commerce, ecommerce, and traditional advertising.
While the millennial generation is the most studied ever, most brands are behind in getting to know Gen Z. There is still a lot to learn about these consumers, as the majority are still quite young. However, the oldest of this generation are about to start their professional careers, soon to graduate from college. These young adults will be forming relationships with different brands and will start to spend the disposable income we all fight for. So I ask, what is your strategy for Gen Z? Feel free to share your thoughts with us!