After the Millennials (born mid-1990s – early 2000s), comes Gen Z. This means the oldest are just starting to graduate from college, but most are still in their teens with plenty of time to go shopping using their parents’ wallets to foot the bill.
Compared to Millennials, Gen Z is also a larger cohort, and as such their impact on holiday sales is significant. First, as recipients of gifts from parents and grandparents—think mobile phones, laptops, tablets and clothes—and second, as buyers of gifts.
How much do they spend?
Gen Z makes up about a fifth of the U.S. population. A report published by Barkley estimates Gen Z’s spending power to be $143 billion, based on estimates of $43 billion for those relying on their allowance and $100 billion for those earning additional income.
What should you know about Generation Z? Gen Z is:
- Less price sensitive than Millennials. This is could be because Millennials more clearly remember the great recession. Three-fourths of Millennials surveyed said they’d go to a website to get a coupon, versus less than half (46%) of Gen Z respondents.
- Less ad responsive than Millennials. Only 59% of Gen Z responders in a recent poll said they followed an advertisement online before making a purchase compared to 71% of Millennials.
- Retail: think active in-store product trials
- Social media: find ways for them to engage with your brand
- In gifting: a third plan to give more experiential gifts this year like crafting, food, and travel.
- Socially conscious. Gen Z feels more connected to important causes and most think brands should help them achieve goals aligned with those causes.
- Shop in stores. Oh, they’re addicted to their devices, but most make their purchases in store—no credit card could be one reason.
For Gen Z, the mall is more than just shopping—it’s a place for entertainment and visiting with friends. Traditional brick and mortar retailers can harness this with a strong social media presence coupled with effective in-store merchandising. Nearly 80% of Gen Zers say they’ve purchased something in store as a direct result of seeing it on social media.
Finally, below are some tips on how to engage Gen Z from the Millennial Ad Network, based on their research and experience:
Accept the 8-second attention span: Communicate more frequently with short bursts: images, emojis, symbols, picture, video, multiple screens.
Trends change quickly: Research and focus groups can get stale almost immediately.
Treat them as equals: Respect is a two-way street.
Appreciate their network: Gen Z has a much larger global network of connections and friends.
Learn from their social media skills: Use social media to perform and self-promote, not just to share.
Category managers should take the time to understand Gen Zers, rather than repurposing Millennial-focused strategies. They’re growing up fast and your brand could grow with them.