Gen Z is the generation born between 1997 and 2012. They are currently between 9 and 24 years old. This generation is known for its independence; they do not play by anyone’s rules, are they are influential, innovative, disruptive, and strongly against social injustice.
There are over 68 million Gen Zers in the US. As more and more Gen Zers are growing up and becoming financially independent, it signals to brands and marketers that the winds of change have begun to blow. Anyone who does not keep up with the times is doomed to fail.
Here is a look at Gen Z shopping habits and how future-focused brands can market to them.
A recent study by Gen Z Planet has highlighted Gen Z’s shopping habits and their attitude towards money.
According to the study, Gen Zers have high disposable income but are cautious with their spending habits. They are not prone to splashing cash and buying expensive items like previous generations.
Part of the reason for this could be that a lot of Gen Zers who are in the workforce or have high spending power grew up during the 2008 recession. They are also now experiencing the economic impact of COVID-19. This has made them very cautious and calculated with their money.
This is also why Gen Zers are very long-term oriented and take advantage of every opportunity to make some extra cash.
Additionally, Gen Z’s spending power is constantly evolving. By 2021, Gen Zers were generating $263 billion from full-time or part-time employment. This figure is set to increase every year as more and more Gen Zers join the workforce.
Gen Zers are also savvy investors. Growing up in the digital economy, they have learned to take advantage of the opportunities that technological innovations afford them. A lot of Gen Zers freelance and explore online money-making opportunities.
Gen Z’s also save a lot more than previous generations. According to the study, 85% of Gen Zers save between a quarter to half of their income. On average, they save 32% of their earnings. Most of this money is saved in a regular savings account, although more and more Gen Zers are putting their money in the stock market, retirement accounts, and NFTs.
Just like millennials, many brands and marketers misunderstand Gen Zers.
Brands that go out of their way to understand how Gen Z thinks and what makes their future-focused entrepreneurial minds tick will have a clear advantage when tapping into this generation’s growing spending power.
Because Gen Z is the latest generation to join the workforce and gain purchasing power, they are more engaged with brands and like to search for newness. They are willing to shop across channels and are eager to stay on top of trends. However, they are extremely frugal and like to think carefully about what they are spending their money on.
So, what does this mean for brands?
Well, it means that brands and marketers have to work harder to generate profits from Gen Z. Here are a few ways to do this:
Engage them both online and offline. Gen Z is an omnichannel generation, which means they do not have a clear preference on a vehicle they use to shop. To maximize potential profits, engage with them both online through social media and offline in-store.
Aim for quality over quantity. Gen Zers are willing to pay a premium for products as long as they are high quality. However, they will not make purchases in bulk or buy as many products as previous generations. Successful brands will therefore make producing quality products a priority.
Incentivize them. Gen Zers love getting value for their money. They enjoy deals and discounts and are more likely to convert when these incentives are available to them. Therefore, brands that offer incentives and coupons have a clear advantage when engaging with today’s Gen Z consumers.
Gen Z is a hugely influential generation. They are just coming into their purchasing power, which means they will only continue to drive change over the next years. Brands that understand this generation position themselves for success in the long term.