Marketers are facing a new challenge in 2018 with the emergence of Generation Z. Born between the mid-’90s and mid-2000s, Gen Z is set to become an even larger audience than Millennials (born between the early-’80s and mid-’90s), and equally diverse, with 2.6 billion globally.
This demographic is making its shopping mark and brands should take heed. They have significant spending power, contributing $44 billion annually to the U.S. economy. According to Marisa Allen, vice president, partner innovations, UNiDAYS, “Gen Zers obtain money from many different sources, and, on their own, they flex $44 billion in spending power. When you factor in the money being spent on this generation from household incomes, it’s a whopping $828 billion.”
Fast Company states that Gen Z consumers have an “eight-second filter” when brands can connect, or be left behind. “Gen Zers don’t watch traditional network television as did previous generations; they’re streamers. They watch the clock count down to “skip past the ads,” says Allen. To win over this profit-driving generation, marketers must refine their strategic approach.
Focusing on Generation Z shoppers doesn’t mean starting from scratch. Marketers should adjust their current strategies to address key trends, including:
Don’t Forget Millennials
Gen Z is on the rise but have yet to trump Millennials, who command the most spending power of any generation‚ over $1 trillion. And they’re spending increasingly more as they hit life’s milestones.
Trends show marketers have been too quick to move from one generation to the next. EMarketer points out it wasn’t too long ago that marketers moved from Generation X and Baby Boomers in favor of Millennials, despite these generations’ sizable spending influence.
Repeating this mistake will be costly if marketers forget this demographic. Millennials are spending more than before and have pre-existing digital relationships with brands. Maintaining and growing these relationships while developing relationships with Gen Zers is the wisest strategy in 2018.