The natural course is that every generation has a period of influence before being replaced by a younger generation. Advertisers have ridden the ups and downs of this transference of influence for decades. Now, however, the biggest demographic in history is starting to exert its spending power, and companies need to be ready to cater to the quirky whims and desires of Gen Z if they want to stay profitable.
The Torch Has Been Passed…
In his 1961 inaugural address, John Kennedy told the world that “the torch has been passed to a new generation of Americans.” Kennedy had a good reason for saying this: he was the first president to be born in the 20th century—in 1917. When Kennedy spoke of a “new generation,” he was referring to himself and, to drive the point home, the word “generation” appears a total of four times in that speech.
Kennedy probably never considered that, to the baby boomers—a demographic poised to explode upon American culture just three years later—he wasn’t part of any “new generation”; he was the older generation against which they would, by the end of the decade, rebel.
That’s the way it’s supposed to be—one generation suddenly loses its influence and is replaced by the next.
Advertisers, marketers, and successful companies have been riding generational waves for seventy years. First, it was the post-war Silent Generation of the 1940s and 50s, who were replaced by the Baby Boomers in the 1960s and 70s, who were replaced by Generation X in the 1980s and 90s, who were replaced by Generation Y—Millennials—in the 2000s and 2010s.
And now, as we begin 2021, the torch has once again been passed to a new generation: Generation Z. Generation Z is a demographic that was born, most experts agree, between 1995 and 2012.
Baby Boomers, with 74-million constituents, were once the biggest generation in history; however, as the number of Baby Boomers declined to 72 million in 2019, Millennials overtook them with 73-million constituents. Those numbers are impressive until they’re compared with the population of Generation Z, which has more than 90-million cohorts, as shown in this graph from Statista:
Even those who have previously weathered a generational upheaval in marketing strategies will not have a precedent for the demographic tsunami that’s already begun.
Those who think they merely have to tweak the strategy used to market to millennials should prepare for disappointment. The two demographics are not at all alike. The differences between Millennials and Gen Z—from role models and attitudes to attention span—are significant, as shown in an interesting infographic from Vision Critical.
Additionally, as you may have noticed, a significant number of Gen Z are beginning to take over the workplace, which means they’ve got money to spend. Estimates are that Gen Z is already spending an average $143 billion per year and they command nearly 40% of all consumer spending, and that’s with only half of Gen Z being old enough to work. Even more startling is that the trailing edge of this generation will be just nine-years old in 2021, so look for their influence to steadily increase for the next two decades.
Other than its enormous size, here’s what makes Gen Z so different: They have never known the world without the internet; they had smartphones from an early age; they’re the first generation in almost a century that spent their formative years in a time of economic recession; they perceive information visually; growing up in a multichannel world, they have what’s generally considered to be the shortest attention span in history.
It’s usually unfair and often unkind to make generalizations about any group, but are there characteristics that many Gen Zers share that would give clues to the best marketing strategies to use? Here’s what we found:
- The attention-span thing – Every time there’s an article on Gen Z, their eight-second attention span gets mentioned like it’s a bad thing. But, according to Ready Education, what everyone is calling an attention deficit is really an extremely effective filter. It’s a mechanism that encourages well-considered and succinct communication and that’s a good thing. You’ve got eight seconds to state your case or make your point and if it takes longer than that, you’re wasting a Gen Zer’s time.
- In-store shopping – For years, the trend has been away from brick-and-mortar stores, but Gen Z is reversing that. A poll of 1,000 18-25-year old Gen Zers showed that 60% had visited a mall within the last week and that 90% of those made a purchase. The poll also showed that 58% have used Buy Online, Pickup In-Store (BOPIS) within the last month. Because they place a high value on personal contact and immediate gratification, Gen Z is far more likely to shop at brick-and-mortar stores than their Millennial predecessors.
- No brand loyalty – Having grown up in a recession, Gen Z is a thrifty bunch. Rather than look for name brands, they base their purchases on a product’s attributes. Business Insider polled 1,884 Gen Zers, age 13-21, and found that 60% based their purchases solely on price, which includes buying from second-hand shops or from clothing rental stores like American Eagle Style Drop.
- They like it real – Bazaarvoice reports that 63% of Gen Z want marketing from “real” people. They’ve got their ad-blockers running, and celebrities don’t impress them, so if you want to sell them something, make sure the person and the message are authentic. If it looks like you’re pandering, you’ll be ignored.
- They use Snapchat and Instagram – Facebook may have been the social media of choice for Millennials, but Gen Zers like their social media to be visual, temporary and anonymous.
- They value their privacy – Perhaps it comes from watching previous generations trade personal information to social media companies or for online services; perhaps it comes from the growing awareness that personal information is being sold or traded to third parties who may have sinister agendas. Whatever the reason, Gen Zers value their privacy more than Millennials or Gen Xers. A 2016 Gallup poll found that Millennials were aware their online privacy could be compromised but believed that nothing bad would happen to them. Since that poll was released in 2016, over four billion records have been hacked from companies and organizations such as the U.S. Postal Service, Reddit, Under Armour, Orbitz, Singapore’s Ministry of Health, Marriott International, Google Plus, Facebook, Equifax, and Capital One. Gen Z has learned from these security breaches—88% agree with the statement, “Protecting my privacy is very important to me.”
- They don’t want to work for you – A report from Online Schools Center shows that 61% of high school students and 43% of college students plan on being entrepreneurs rather than employees. In a poll of students in grades 5-12, 40% plan to start their own business, 29% want to invent something that changes the world, 24% are already learning how to start and run a business, and 9% already own a business.
How does one develop a new marketing strategy that targets Generation Z?
Because they’re such a diverse group, there won’t be any hard-and-fast rules; however, we found a few tips from Forbes’ Business Development Council that may help win the hearts and minds of Gen Z:
- Use Multi-Channels – You’ll find Gen Z on social media and on their phones, so start there with a multi-channel marketing campaign using a variety of formats such as video, pic posts, stories, etc. Use direct, individualized messaging and content.
- Provide user-generated content (UGC) – They may not believe ads, but they trust regular people. After years of reading thousands of Amazon reviews, Gen Zers depend on user reviews and providing lots of UGCs may be what closes the deal.
- Sell results – This generation wants to know what’s in it for them so don’t sell your product; sell what your product can do to improve their lives. Sell the success they’ll achieve by using your product. You want to be viewed as an expert who understands the needs of Gen Zers.
- Entertain them – Lisa Box, from WP Engine, says having spent their entire lives online, Gen Z is used to being entertained. “To win with Gen Z, marketers have to evolve from informing to delighting, from celebrity to authenticity, and from generic to predictive.”
- Show them a video – They love YouTube and are accustomed to watching short videos on their phones. Go to their comfort zone and play to their interests. Use short videos throughout the sales process.
- Appeal to their social consciousness – Gen Z is less interested in your product and more interested in how you treat employees, customers, and the planet. Highlight your company’s values and the social good you provide. Tailor your messaging on each social media platform and provide quick, meaningful information to capture their attention.
Generation Z is an enormous, multi-faceted demographic and marketing to them—while necessary—will be complicated, and next month we’ll look at the single best place to encounter Gen Z online.
If, however, you don’t have the time or resources for a paradigm shift in your marketing strategy, we at McFadden/Gavender can help. Thanks to a plethora of talented Gen Z employees, we know every facet of marketing and advertising to that diverse and important generation. Contact us and let us show you how we can take your brand further.
NEXT MONTH: How to Reach the Largest Demographic, Part II: Where to Encounter Gen Z