MEET GEN Z: YOUR FUTURE CHIEF CUSTOMER
Over the next 10 years, Gen Z will profoundly transform the future of business and the retail experience as a whole. Already, Gen Z represents over 20% of the total U.S. population and commands an incredible “$143 billion in buying power.” Who are they? Gen Z are digital natives. Unlike earlier generations, Gen Z has been part of the hyper-connected world of the internet from a young age. As a result, this iPhone generation processes information through their digital devices. The Pew Research Center defines Gen Z as anyone born after 1996, which means that the first wave of Gen Z graduated in 2018 and began entering the workforce as financially independent consumers. It is critically important to understand the big picture trends that inform Gen Z’s purchasing decisions so that you can be ready for their rise.
SHIFTING VIEWS ON OWNERSHIP
The biggest shift can be seen in their perspective on consumption. “For Gen Z...consumption means having access to products or services, not necessarily owning them.” This shift is illustrated through increased demand for things like “car-sharing, video streaming, and subscriptions.” Like millennials, they value highly individualized products and services while also demanding data privacy. Only 15% of Gen Z report having zero issues “sharing personal data with companies.”
Gen Z are experts at sifting through large amounts of data to find the truth. They are shrewd buyers who want to support companies that share their values. They care about where products are sourced and how companies treat people. 72% of Gen Z consumers report “they're more likely to buy from a company that contributes to social causes.” Businesses need to be transparent and let customers interact and understand their business model. Don’t obscure information, but allow Gen Z customers to leverage data to make informed purchase decisions.
THE SOCIAL MEDIA MIGRATION
Where Gen Z’ers collect information is also incredibly unique. This is a key difference between Gen Z and earlier generations. 65% of Gen Z “check Instagram every day” and “62% are daily YouTube users.” Only 34% check Facebook daily. Older social platforms are going out of style for this group. There is a real Gen Z exodus from social media sites like Facebook that have become over-commercialized and over-monetized. Gen Z is leaving these older platforms for new innovative brands like Tik Tok. 60% of all U.S. Tik Tok accounts are Gen Z. Even on social media platforms that remain popular, it is important to note that Gen Z is abandoning “the curated Instagram aesthetic” in favor of more authentic content. In a recent survey, 82% of Gen Z consumers said “they trust a company more if it uses images of real customers in its advertising.” For retailers, video content is the key to the market. Gen Z uses Youtube and other video sharing platforms to find new products and research their next purchases. As digital natives, they can spot the difference between sponsored influencers and genuine independent reviews. Internet giant Cisco estimates that “video will account for 82% of internet traffic globally by 2022, up from 75% in 2017.”
A DIFFERENT PERSPECTIVE ON LIFE
For many people in this generation, the 2008 financial crisis is their first major political memory, which has profoundly shaped Gen Z’s perspective on wealth and consumer behavior. According to the Wall Street Journal, “Early signs suggest Gen Z workers are more competitive and pragmatic, but also more anxious and reserved, than millennials.” Gen Z is obsessed with building a recession-proof lifestyle."Thoughtful consumption” is the name of the game when attracting Gen Z customers. These consumers want real value from their brands. They look for shopping experiences that allow them to shop “from brands that already have low prices by buying more expensive things that last longer.”
As Gen Z starts to impact the market in the coming decade, it is critically important to fully understand and articulate your brand online to these prospective customers. 72% of Gen Z report “purchasing an item online in the last month.” 28% consider “a simple online checkout experience as a purchase driver.” Gen Z spends 10.6 hours consuming online content daily. An accessible digital storefront is vital. Every modern business needs a compelling brand story and a powerful online presence. At CASTUS, we bring a wealth of knowledge and experience from a wide range of industries, and we want to help communicate your brand and values to the world.