Gen Z is coming.
No, it isn’t some new zombie flick rolling out into theaters, but the next big thing in brand marketing. In fact, this demographic already has $44 billion in buying power. This post-millennial generation of some 70 million Americans is projected to account for almost half of all U.S. consumers by 2020.
So, what is Gen Z? This group includes people born from 1995 to 2012 who have grown up in the technological age of the 2000s. Gen Z-ers are set to be the most ethnically and culturally diverse generation ever.
They are entrepreneurial, in love with technology, and have a soft spot for social movements. This generation is quite different than those that came before it for many reasons, but the biggest one is simple: social media.
Many marketers refer to Gen Z as the “Total Social” generation because they’re engaged not only online but offline as well. This generation grew up with social media at their fingertips, and nearly 98 percent of all Gen Z-ers have a smartphone. Snapchat, Instagram, and Facebook are parts of their daily lives, so it’s no wonder that their consumer behaviors closely align with this paradigm.
Gen Z-ers are not that much different from previous generations in their perceptions of brands. No matter the generation, the psychology of successful branding can be broken down into five core aspects:
Each generation of consumers tends to focus on some aspects over others, and Gen Z is no different. Gen Z-ers are driven primarily by sincerity in advertising and excitement about the brand they’re engaging. They want experiences they can share on Instagram or Snapchat.
This generation is still young, so it is tough to pin down exactly what they want brand-wise. Yet, several trends are emerging and showing how this powerful purchasing force will soon reshape the consumer landscape.
Importance of Peer-to-Peer Relationships and Influencers
Gen Z is a social generation both online and offline. In fact, Gen Z is talks often about brands and average 13.4 conversations about products or services per day. These conversations range from online social media to face-to-face conversations, and they tend to average 30 percent more conversations about brands than previous generations.
The big takeaway is that Gen Z puts a high value on peer-to-peer feedback and appreciates authenticity in your branding. Most Gen Z consumers are eager to interact with your brand, but they are also selective and can easily detect “being sold to.”
Thus, brands like Nordstrom, Target, and Walmart have begun collaborating with social media stars to create collections, build brand buzz, and get real-time feedback about what’s cool. Walmart, in an effort to curb Amazon’s online retail dominance, has started appealing to Gen Z by integrating with social media influencers. The retailer has influencers like Atsuna Matsui, a beauty influencer on Instagram, show products in context.
By tapping into the social media influencer market, brands can create a dialogue that connects personable stars, the product, and Gen Z more authentically than the stale strategies of sites like Amazon.
Deconstruction of Channels
Historically, marketers have focused on distinguishing the kinds of consumption channels groups use to access content. However, Gen Z has blurred the lines between email, digital, desktop, TV, and other devices, creating a homogenized unit of content consumption.
In other words, Gen Z doesn’t really care about channels. If you ask a Gen Z-er what they’re doing when they’re streaming YouTube or Netflix, they’ll most likely say they’re watching TV.
Gen Z is considered a mobile-first generation, so tailoring a brand experience around mobile is critical. Tangible experiences that create a cool opportunity to post on social media are a boon for Gen Z engagement. So instead of worrying about where to distribute content, focus on creating mobile experiences that have real-world applications.
The Most Discussed Brands and the Resurgence of Brick-and-Mortar Stores
Some of Gen Z’s most discussed brands include Apple, Netflix, and YouTube. Even brick-and-mortar stores like Target and Walmart have ascended in popularity among Gen Z consumers. It’s easy to see why tech companies are held in such high regard, but why brick-and-mortar stores?
First of all, Gen Z-ers are much more likely to shop at physical locations because they enjoy the combination of a digital and physical retail experience. The group spends 64 percent more time browsing online and 41 percent more time in stores than previous generations. Stores like Target and Walmart have experienced “unprecedented” growth this past Q2 due to this trend.
Walmart, in particular, is set to capitalize on Gen Z’s growing “in-store” shopping trend. The retailer saw a 40 percent jump in Q2 online sales, and with an almost insurmountable number of physical locations, it is set to compete with Amazon for the attention of Gen Z.
Walmart is even going as far as to create a brand to rival Everlane (an online retailer that prioritizes quality clothing) targeted towards Gen Z. It remains to be seen whether this demographic will accept this type of branding, since they tend to be averse to large brands and corporations.
Secondly, these “big box” stores focus on bargain-hunting deals, and Gen Z has been proven to be more frugal after growing up during the Great Recession. The group spends 56 percent more time with Walmart than the millennial generation. Bargain brands like Ulta and local grocery stores are experiencing similar upsurges, at 48 percent and 45 percent time spent increases.
Gen Z is much more socially conscious, and their brand preferences reflect this. So while some brands are experiencing a resurgence, other brands like Coca-Cola and Pepsi are experiencing 21 percent and 49 percent downturns. This generation is reaching for healthier or vegan options that reflect their social preferences. They also look for brands that prioritize convenience over destination—another reason why Walmart and local stores are posting near triple gains in social media conversation.
Gen Z is scrupulous about the brands they follow. Since they grew up in the digital age, they will likely research a company to learn if the company culture matches its advertised message. If there’s a disconnect, Gen Z may lose interest in your brand. Nearly 75 percent of this generation avoids following marketing trends, and they often see right through any kind of about-faces.
What is your brand supposed to do? Be authentic, and create a human connection with your audience. Be about something other than just your product. Be charitable and community-focused. Gen Z wants you to ask how your brand can add value not only to this generation’s lives but those of future generations as well.