Have you been lumping the up-and-coming generation together with millennials? You may want to rethink that. Unofficially known as Generation Z, this latest group to come of age is shaping up to be a much different generation than any prior.
These individuals (born after 1997 and until 2012) are beginning to work and have influenced consumption for several years now.
"Generation Z has already arrived on the scene, which means that business owners still targeting millennials as their 'young kids' demographic are out of touch," says Zack Holland, co-founder and chief marketing officer of cloudten, which produces luxury bedding products targeting younger customers.
—Zack Holland, co-founder, cloudten
"Understanding the unique and extremely high-grade demands of this cohort of consumers is necessary learning now, not in a few years when it will already be too late," says Holland.
"Generation Z consists of 'old souls in young bodies' in many areas," adds Jeff Fromm, president of FutureCast, a marketing communications company, and co-author of Marketing to Gen Z. "Members of this generation are digital, social and mobile to the core, but embrace more traditional values around hard work and saving for the future."
The First True Digital Natives
Born nearly with cell phones in their hands and surrounded by Wi-Fi, Generation Zers are hyper-connected and all about mobile.
"Generation Z is defined by its trait of being the first generation to grow up with the digital world for the entirety of their lives," says Holland.
For Gen Z, their only reality is digital. They couldn't envision a world without smartphones and Wi-Fi even if they tried. To them, "Google" is a verb and checking online reviews is a first step in vetting products and services.
They've also molded their personal identities through social media. Though they're comfortable on digital platforms, they're also prudent about what they say and do online, notes Fromm.
"Members of Generation Z tend to have their privacy meters set on high alert," he says. "They don't want to get burned by making social media gaffes."
Pragmatic and Driven
"Understanding Gen Z requires understanding the context in which this group came of age," says Ted Chan, founder and CEO of CareDash, a physician reviews site.
"Generation Z grew up in the shadow of the Great Recession, which made them more pragmatic than prior generations—even baby boomers," says Chan. "Pragmatism and security are key requirements for them.
"In their early years, they witnessed established institutional structures fall and therefore are more skeptical of traditional avenues to success," he continues. "Don't be surprised to see them jump into careers at earlier ages, willing to bypass systems like higher education and large 9-to-5 organizations to launch their own startups."
A study by The Center for Generational Kinetics backs this up. In a 2017 survey of 2,004 respondents in the U.S. (1,004 Generation Zers ages 14-21 and 1,000 millennials ages 22-39), 77 percent of Generation Z members surveyed reported earning their own spending money by freelancing, working part-time or through an earned allowance.
"This is a powerful finding," the report states, "because we discovered that the percentage of Gen Z members who are earning and spending money is about the same as the millennials we surveyed, who are ten years older!"
"Members of Generation Z have big dreams, are inquisitive and inspired," says Ashley Werhun, CEO of Mentorly, an online arts mentorship platform connecting emerging professional artists with creative thought leaders. "Our Gen Z interns have been some of the most driven and focused I've ever met. They're honest and insightful and excited to contribute to the larger conversation."
"Members of each generation create their worldview by a combination of what happened in society from the ages of 6 to 20, and by taking on some of the perspectives and viewpoints of their parents," according to Becky Thomas, president of Be Greater Consulting, which helps leaders work more effectively with next-generation employees.
"Gen Z is the 'echo' of Gen X, meaning just as Boomers raised millennials, Gen X is raising Gen Z," says Thomas. "In addition, Gen Z has heard enough about the bad rap millennials get for being 'entitled,' so they're skewing in the opposite direction. Many are getting internships as early as high school to differentiate themselves and get ahead."
Marketing to Generation Z
Considering Generation Z's current and future economic prowess, it's a good idea to determine how to effectively market to this growing segment of the consumer population.
First, it's important to understand that this generation turns traditional marketing on its head in some ways, while hearkening back to yesteryear in others.
"Technological inefficiency or outdated technique is simply not tolerated by Generation Z," says Holland. "Many Generation Z shoppers won't shop at a website or app again if it loads too slowly or is difficult to navigate."
On the other hand, many Generation Z consumers are more patient when it comes to waiting for products they bought online to arrive, according to Bill Friend, VP of North America for product order management software company Fluent Commerce.
In May 2018, the company conducted an online shopping survey in which they surveyed 5,000 "Next Generation" shoppers between the ages of 14-24 across the U.S. (This study, while not available to the public, was shared with me.)
The Fluent Commerce study found that 47 percent of respondents were willing to wait a week or more for a package, providing it included free shipping.
The study also found that 73 percent of next generation consumers still shop in-store.
"Brick-and-mortar stores may not be doomed at the hands of this upcoming generation," says Friend. "To them, shopping in-store is a social activity."
As you prepare your marketing campaigns for this younger consumer, keep these additional generational characteristics in mind.
1. They just might be today's most informed consumer.
"Generation Z consists of savvy shoppers," says Fromm. "Before buying, they gather input from many sources using the modern day Swiss army knife known as a cell phone. They're capable of processing more information from more sources than any consumer before them."
"Gen Z is the epitome of the informed consumer," Chan agrees. "They know the product, the brand and the industry before coming through your door.
"With this generation," he continues, "we'll see blurred lines between the digital shopping experience and the physical store experience. They might order on the phone while in the store, use virtual reality to see how the item might look in their home or 'step' into the store without leaving home."
Experiences are also very important to Generation Z, according to Bailey.
"They've been chronicling their lives via social media and YouTube since they were young," she says. "The better the experience, the more likes they receive from their peers and followers. Now as consumers, they want businesses to provide good experiences in their products and shopping experiences."
And as such, reviews matter to Gen Zers.
"This is a population that grew up counting likes," says Bailey. "They'll want to see more than a few reviews on Amazon and in stores. Marketers may have to reward consumers for sharing on social media or incentivize customers for rating their products."
2. They expect personalized marketing experiences.
"Gen Z is the first generation where there's no difference between offline or online interaction," says Adam Rivietz, co-founder and chief strategy officer of #paid, a firm that focuses on influencer marketing.
"Gen Z considers relationships in the real world and online at the same strength level. That parlays into treating influencers like friends," says Rivietz. "When influencers promote services or products with aspirational content, Gen Z trusts them and will be that much more receptive because of how powerful the relationships are—even though they've never met or spoken to them."
3. They are focused on personal branding.
"Members of Generation Z are critical of what they buy and who they follow," says Werhun of Mentorly. "They have big dreams and are driven by impact. If something they buy or consume helps them reach their goals, they'll follow it."
"Members of Generation Z want to co-create their social identity and stories, and they do this with brands," he says. "If you understand that it's not about your brand, but about helping them with their personal brands, then they're going to love and buy your brand."
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