Born between 1995 and 2010, Generation Z represents a rising force in global economics. By 2031, the collective income of Gen Z will increase five times over.
At over US$2 trillion in global earnings, Gen Z will control a bigger piece of the pie than Millennials. This generation is over two billion strong worldwide, with nine in ten living in emerging markets. India claims the largest share of Gen Z individuals, with a fifth of the total.
In the United States alone, Gen Z represents 40 per cent of all US consumers. They spend US$143 billion of their own money annually while influencing US$127 billion of their family members’ spending decisions.
If your company doesn’t have marketing plans dedicated to Gen Z consumers yet, it needs to make some. While Gen Z does have its list of favourite brands, only 36 per cent express a strong sense of brand loyalty to any one company.
What should brands keep in mind when marketing to Gen Z?
The first subject to tackle is demographics. In the US, Gen Z has been dubbed “the diversity generation” for obvious reasons.
48 per cent of Gen Z is not white, making it the most racially diverse generation in America. 22 per cent of Gen Zers have at least one immigrant parent, compared to 14 per cent of Millennials.
Beyond racial and ethnic makeup, Gen Z is also diverse regarding sexuality and gender identity. 20 per cent of Gen Z considers themselves part of the LGBTQ+ community, boasting a membership twice the size of prior generations.
While gender-neutral pronouns were not common before, 35 per cent of Gen Zers personally know someone who uses them.
The last demographic item worth highlighting is education: Gen Z is on track to be the best-educated generation in the country. 57 per cent of recent high school graduates enrol in a two or four-year college. Many of them are going, although they are first-generation students.
Now that the demographics of the generation are laid out, the next thing to consider is how these demographics affect the generation’s values. Unlike previous generations, which made shopping decisions based on name, Gen Z buys based on perceived company values.
Brand names don’t mean as much as they used to; in 2020, trust in major institutions among Gen Zers fell by 10 percentage points. The younger generation wants to buy from brands they trust to do the right thing.
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According to survey data, Gen Z values sustainable business practices, affordability, and inclusivity the most. They will avoid brands they perceive to be overly macho, scandal-prone, or discriminatory.
Growing up under the threat of climate change has left a deep impression on Gen Z. As a result, today’s young people want to use their shopping habits to make a difference.
73 per cent of Gen Z consumers surveyed say they’re willing to pay more for sustainable products, a higher percentage than any other generation. 54 per cent of those surveyed would still make this choice even if the price difference were greater than 10 per cent.
Companies that invest in green initiatives should make their activities known to Gen Z consumers. Examples of good sustainability measures include making products from recycled material, powering operations with renewable energy, and using recyclable or biodegradable packaging materials.
On the subject of inclusivity, the rationale is simple. Gen Z consumers want to shop with companies that are as diverse as they are. Various casting and imagery in advertising are important, but it’s not the end of the story.
Most Gen Z consumers surveyed also wanted to see brands pursue wider inclusivity initiatives and incorporate more diversity into senior leadership positions. Two actionable items clothing brands can adopt to be more inclusive are allowing customers to search for gender-neutral clothing and adding non-binary gender options to online forms or profiles.
With an idea of what to include in messaging, brands also need to ensure their marketing reaches Gen Z audiences. For this purpose, they should emphasise mobile marketing above all.
Nearly half of US teens spend over 10 hours daily on their mobile devices. For 20 per cent of Gen Z, over five of these hours are spent on TikTok alone. Social media is a powerful tool for connecting brands to customers.
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