Millennials officially overtook Baby Boomers as the largest demographic in the United States, making them the “it” target market … for now.
Yet, it’s another group that wields household purchase influence on items ranging from food to clothing to furniture, even to vacation destinations.
Did I mention this demo probably has no driver’s license, let alone a job?
Gen Z, the generation after Millennials, is approximately those born between 1996 and 2009. Quick math tells you this demo is, at the most, 21 or as young as 8. A marketer’s sweet spot would fall between tweens and up. On average, Gen Z kids have an allowance of less than $20 a week.
This begs the question: how did a group of middle schoolers, high schoolers and college kids attain so much spending influence on a wallet not belonging to them?
Chalk it up to their digital savviness. “Gen Z is the first generation born into a digital world,” said Ruth Bernstein of AdAge. “Gen Z is a generation of highly educated, technologically savvy, innovative thinkers. They look for solutions on their own. They set out to make things on their own.”
Unlike Millennials, who are cautious with spending and known to shop for digital bargains, Gen Z spends a hefty chunk of their earnings, whether it’s from a part-time job or an allowance. The rest, they save. Gen Z is wary of where they spend money and choose their brand loyalty wisely.
A survey by Lincoln Financial Group found that 60% of Gen Z already have a savings account, potentially trying not to replicate the plight of most Millennials — living at home, with massive student loans to repay.
When buying a holiday gift, Gen Z won’t settle. According to the National Retail Federation’s (NRF) 2017 Holiday Planning Playbook, 92% of Gen Zers left a store this past holiday season sans purchase if they didn’t find their desired product. This is significantly higher than the average holiday shopper, with only 77% leaving a store if they were unable to find a specific gift.
Data from “Uniquely Generation Z,” commissioned by IBM Institute of Business Value and NRF, found that Gen Z makes up one-quarter of the U.S. population and is slated to grow to a third by 2020. Seventy-five percent of Gen Z spends half their monthly income; 93% of parents of Gen Zers note that their children have real influence over the family’s household spending. Gen Z’s biggest household influence comes for decisions on Food & Beverage (77%), Furniture (76%), Household Goods (73%), Electronic Goods (61%), Clothes & Shoes (60%) and Personal Care Items (55%), respectively.
One company keen on cashing in on Gen Z spending is Amazon. The company created Amazon.com for teens that allows kids to have their own custom account, which is paid for via Mom or Dad’s Amazon account. Parents set up parameters for their children’s accounts, making it impossible for little Johnny to purchase a kayak, just because he can.
HRC Retail Advisory surveyed 3,100 Millennial and Generation Z consumers and found that 61% of Gen Z purchases are strongly influenced by friends, with 13% being influenced by bloggers. That’s right, bloggers. Marketers are better off targeting Gen Z with a YouTube celebrity rather than a highly paid celebrity endorsement.
Said influence might be happening in real-time, while shopping. Half (50%) of Millennial and Generation Z shoppers surveyed use social media as they buy. Time is spent on Facebook (61%), followed by YouTube (38%) and Instagram (24%).
“Uniquely Generation Z” found that Gen Z only wields $44 billion of spending power a year. Is your company/agency currently targeting Gen Z? If so, how are you reaching this demographic?