Understanding Gen Z: The Next Generation of Consumers

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Ashley Leone

In case you’ve missed it, millennials are no longer the new kids on the block. While they are still a generation with massive purchasing power and sway, Gen Z is the newest “unknown” for marketers. Unfortunately, the time for marketers to get a head start on understanding Gen Z and figuring out the wants and likes of this generation has passed—they’re already entering the marketplace and making some demands of their chosen brands.

A Generation Coming Into Its Own

Gen Z has become more and more of a big deal. The generation once known for the Tide Pod Challenge   wields their more than $140 billion in global consumer spending like a sword to create the change they want to see in the world. As the USPS 2021 Generational Report states, “Gen Z has grown up to be a new savvy, socially responsible, intensely creative generation of consumers.”

If you’re behind on getting to know this generation, here’s a crash course on understanding Gen Z:

What Makes Someone Gen Z and How Gen Z Makes Up America

Sixty-seven million Americans, 20% of the U.S. population, make up the Gen Z demographic. Gen Z consists of those born between 1997–2012 (for those not interested in doing that math, that puts them between 10 and 25 years old). This means the generation is entering into adulthood in both the metaphorical sense (congrats to those starting or graduating from college, landing their first “big kid” job, and moving out on their own), as well as the literal (best wishes to all the 13 year-olds going through puberty and their parents).

Gen Z are True Digital Natives

Ninety-five percent of Gen Z have access to smartphones and similarly grew up with internet access, and social media accounts making this the first generation to be raised on digital. Social media platforms such as Instagram, Snapchat, and TikTok are very popular with this age group, with 45% saying they are online “almost constantly” and an additional 44% stating that they go online several times a day. Some research has posited that this has led to increased anxiety and depression within the Gen Z demographic. A significant percent of Gen Zers don’t see it that way, however: 31% say social media effects are positive, 24% say it’s mostly negative, and 45% say it’s neither positive nor negative. Like most things, this generation’s connectivity is a two-sided coin. Take online learning, for instance: while it provided a safe way for kids to continue their education and interact with other kids during COVID-19 lockdowns, it also was reported to create feelings of isolation and increased anxiety and depression. It’s unclear what impact or role long-term digital connectivity and social media will play as Gen Z become adults.

Gen Z Embraces Diversity

It’s important to understand that Gen Z is more racially and ethnically diverse than previous generations, with a small majority (52%) identifying as non-Hispanic white and one-in-four identifying as Hispanic. According to Census Bureau projections, even with diminished immigration to the U.S. in recent years, the U.S. Gen Z population will be majority nonwhite by 2026. In a similar vein, while only 6% of Gen Zers are immigrants, 22% have at least one immigrant parent.

Gen Z is Highly Educated

They are also on track to becoming the most educated demographic in the U.S. with  59% of those who graduated high school by 2017 having enrolled in higher education. This may be influenced in-part by the 44% of Gen Zers who are growing up with a parent who has completed some form of higher education. This has also resulted in a lower number of Gen Z teens and young adults entering the labor force with only 18% of Gen Z teens (ages 15-17) employed in 2018.

Gen Z Leans Progressive on Key Views

In terms of their views on policy and social issues, Gen Z closely mirrors millennials by tending to lean more progressive and view increased diversity as a positive. They support family and societal changes, such as gay marriage, inter-racial marriage, single-parent households, and both parents in the work force. Environmental issues, including climate change and sustainability, are also a top priority for this generation. A majority of Gen Z voters (65%) voted for the democratic party in 2020 and have similar stances on social and political issues as their older Democratic counterparts. However, those who identify as Republican tend to have drastically differing views from Republicans in older generations. For instance, 52% of Gen Z Republicans believe the government should do more to solve problems such as climate change, while only 29% of Gen X (those born between 1965–1980) Republicans feel the same. Similarly, 43% of Gen Z Republicans say blacks are treated less fairly than whites in the U.S. today versus 20% of Gen X Republicans.

An Important Note on Understanding Gen Z Behaviors and Views

When considering these facts, it’s important to note that a lot has happened over the past few years, and many Gen Zers have not yet developed their own viewpoints or are young enough not to understand complex societal issues. While this information is helpful in addressing consumer behaviors today, the impacts of COVID-19, inflation, job market, recent court rulings, and current events are not yet reflected and may result in a dramatic shift in priorities and viewpoints for Gen Z as time moves on. It’s crucial to continue to research trends and update preferences accordingly for every generation, but especially for understanding Gen Z as they merge into the workforce and enter adulthood.

Why Gen Z is an Important Demographic for Marketers Today

While the younger end of the Gen Z spectrum is most certainly still dependent on their parent’s income, that’s rapidly changing. Yes, ten years old may seem a bit young to be considered a money-making demographic (unless you’re in a kid-centric industry), but it’s a good age to start building brand recognition and loyalty. Gen Z is reported to consider loyalty programs important to their purchasing decisions, and 54% consider easy-to-find branding as an effective direct mail element.

Meanwhile, the older end of the generation is entering higher education or the workforce and need to make big first-time purchases like transportation, housing, insurance, and the additional related purchases that go along with them from furniture to phones, lawn mowers to savings accounts, and everything in between.

If you’d like to learn more about understanding Gen Z and how to use those insights to efficiently and effectively improve the performance of your marketing to this generation, contact us today.

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