If you’re a 21st-century business, the buying preferences of Millennials (also known as Gen Y, born between 1981-1996, according to the Pew Research Center) are most likely known to you.
Millennials, by this point, are well-known for preferring to invest in experiences over traditional purchases. They initiated the sharing economy, as a result of being debt-burdened by expensive university degrees, while delaying home-buying, marriage and parenthood that were the traditional adult milestones of earlier generations.
But how much do you know about the shopping habits of Generation Z (also known as Gen Z, iGen or Homelanders, born after 1997)… whose 2020 purchasing power has been estimated at over 140 billion dollars?
The fact is, Gen Z, are not parting with their cash in the same ways as Gen Y, and their distinct characteristics and preferences, and these deserve and demand to be acknowledged in turn.
For one thing, as identified by cloud-based CRM company Salesforce, Gen Z are less willing to pay extra for higher customer service. It’s important, but not so important to the Zs as it is to the Millennials.
For another, Gen Z are MORE demanding than Millennials when it comes to true innovation. Gen Y definitely supports products that are unique, disruptive and break the mould – but Gen Z has an even higher standard of what that looks like. Again, unsurprising – these are the guys who grew up with YouTube and Netflix and can’t remember a time before smart devices and the internet, whereas older members of Gen Y can still remember pre-cellular phones and analogue video players.
Also… cynical Gen Z individuals don’t trust brands easily. They can smell hype and manipulation a mile away. Just because your company SAYS it does something or has a worthy mission, doesn’t mean they’ll believe you that quickly. Earning their trust as customers means the value you say you offer had better be demonstrable in practice. Because Gen Z are more cynical pragmatists than idealistic optimists, like their Millennial predecessors.
Having said that, Gen Z take Millennials’ social concern to a whole new level. To win Gen Z loyalty as customers, a brand will rise and fall on its integrity, its willingness to support diversity and in approaching its potential generation Z clients as individuals, and not, as Millennials prefer, as a creative tribe.
More consuming differences include Gen Z’s frugal, budget-conscious mindset, their opting for in-store over online purchases (so they can be sure they’re buying a value-for-money product) and their preference for influencers who are ‘real’ people, not necessarily celebrities.
A final thought on Gen Z consumers: getting to the point. When it comes to selling to these digital natives, it’s even more important than it is for Millennial customers. Gen Z’s attention span is 8 seconds (versus Millennials’ 12 seconds), so elaborate, glossy ad campaigns are less likely to engage them.
To re-cap: understanding how Gen Z want you to interact with them – whether you are a service or product provider, or their educator, mentor or employer – will be key if you want to engage effectively with this enterprising and independent generation.