Generation Z and Its 3 Most Important Consumer Behaviors
Sure, Generation Z’s pockets aren’t very deep. And with an average allowance of less than $20 per week, their iPhone bill is mom and dad’s problem for a few more years.
Does that mean these post-millennials don’t deserve your attention?
I know, I know, you’re focused on all that spending power millennials (born 1981-1997) bring to the table, and that makes sense.
Accenture estimates annual spend by millennials in the U.S. will be somewhere in the ballpark of $1.4 trillion by year 2020, representing 30% of total sales.
But don’t sleep on Gen Z (born after 1998). According to some reports, by 2020, Gen Z will make up almost 40% of our consumer base. And in a recent Cassandra Report on said generation, 93% of parents say their children influence family spending and household purchases.
So marketers, while Generation Z might not be front and center in your customer engagement strategy, there’s no doubt they need to be in your periphery.
(As for millennials, we showed them some marketing love not that long ago.
Check out our blog on one surprisingly successful marketing strategy for millennials.)
3 Consumer Behaviors Separating Generation Z from the Pack
Call them 20firsters, Founders, Bridgers or even Pivotals. Just don’t call them mini-Millennials. This up-and-coming consumer force will continue to prove it’s vastly different from its predecessor.
Here are three Gen Z consumer behaviors that shouldn’t go unnoticed.
Weary of Major Brands
Word on the street is Gen-Zers, compared to any other generation, trust major brands the least. This lack of trust is pressuring brands to do the right thing, aka:
- Be transparent. It’s time to address head on how products are made, how ingredients are sourced and how employees are treated. And if you’re calling yourself the best, no matter the context, you better be ready to prove.
- Contribute to the greater good. Eighty percent of Gen Z has a greater tendency to buy a product that has a positive social or environmental impact (source).
- Embrace real life. Marketing and advertising campaigns trading out celebrities for influential peers resonate. According to Generation Z research by FutureCast: 77% like ads that show real people in real situations, 65% dislike ads that make life look perfect, and 61% like ads that show diverse family types.
“They have the strongest BS filter because
they’ve grown up in an era where information was available at all times.”
– Emerson Spartz, CEO of Dose, a digital media company
While Generation Z might be the most progressive, most open-minded generation ever, they are also the most conservative when it comes to their approach to spending. With millennials buried under student loan debt, it’s no wonder.
A survey by Lincoln Financial Group found that Gen Z is saving much earlier than previous generations – 60% of them already have savings accounts. The same survey revealed this generation’s top three priorities: getting a job, finishing college, and safeguarding money for the future.
Who is Your Customer? FinServ Edition
A Closer Look at Gen Z [INFOGRAPHIC]
This fiscal frugality, however, doesn’t mean price is the end-all-be-all factor when deciding what products to purchase. They really want to know what they’re getting for the price, which means value and a personalized experience are key.
Here are a few interesting statistics regarding Generation Z’s pre-purchase buying habits:
- A recent global study from IBM found 67% of Generation Z shop in brick-and-mortar stores most of the time.
- Findings from GfK’s annual FutureBuy study show 46% of Gen Z consumers in the U.S. have researched an item on their smartphone or tablet before buying it in a store, which is up 5 percentage points from 2015 and 12-27 points more than any other generation.
- On the flipside, the same study revealed 32% will research a product in a brick-and-mortar store and then bought it online using a mobile device. This is also up (8 percentage points) compared to the previous year and 11-20 percentage points higher than other generations.
Impatient? Nah, Just Demanding
Get to the point. While they might not come right out and say it, that’s what Generation Z is thinking.
I take that back. They probably will say it, along with a few other choice words.
According to new data from advertising analytics company Marchex, Gen Z is 30% more likely to curse at a customer service representative over the phone if needs (expectations) aren’t being met. And 60% of Generation “What’s taking so long?” are more likely than the average consumer to hang up if the phone is not answered within 45 seconds.
The takeaway? They demand responsive customer service.
A few years back, researchers in Canada determined our average attention span is 8 seconds long — shorter than a goldfish’s. Today, signs point to Generation Z cutting that in half. Seriously.
It’s important to acknowledge: This isn’t attention deficit disorder we’re dealing with, rather a four-second filter. Older generations have had to adapt to an increasingly fast-paced world. For Generation Z, this is normal … no adapting needed.
To keep pace, brands will need to keep messaging short, bite-sized and visual with an option to access more information.
Does Your Marketing Strategy Recognize Generational Differences?
From one generation to the next, the rules of engagement can be drastically different. Precision Dialogue will help you determine how different and where to start by:
- Developing and managing a sophisticated, integrated marketing database
- Identifying and acquiring the right data
- Uncovering the most meaningful correlations to deliver actionable insights
It’s time to get your data ducks in a row. Once you do, your brand will be nimble enough to market to the vastly different needs of these new customers. To make that happen, your CRM will need to play a vital role.
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