This month, an INC. Magazine featured a piece on the “$413B Train Wreck” around brands and Gen-Z. The piece brought up some important questions. Namely, are marketers ready for Gen-Z? We’d just started to figure out Millennials – and now there’s another generation coming down the pipeline.
Gen-Z members are breaking the molds of their Millennial siblings (or parents in some cases). Marketers need to be on notice with this up and coming generation now that they are entering the workforce. They have purchase power, knowledge and you are going to have to work to get them as customers.
Who are the Gen-Z’s?
Like Millennials (Gen-Y), it depends on whom you ask. They are the Post-Millennials. It’s generally agreed upon that the cut-off for this cohort is those born after 1995. Unless you’re MTV, which claims them as post-2000 babies. Yes, MTV is still a thing and get to weigh in on “the kids”. There are a variety of naming conventions that you may have heard. Digital Natives, iGeneration, Plurals (short for The Pluralists), The Homeland Generation, et al.
In Japan, they’re known as Neo-Digital Natives, and MTV refers to them as, The Founders. Generation Z already makes up the largest part of the U.S. population at 25%. This makes them a larger percentage of the population than both Baby Boomers and Millennials.
What Makes Them Different from Millennials?
Gen-Z seeks a higher class of living and stronger work-life balance than their parents. But aren’t optimistic that they will achieve it. This outlook may seem bleak. But it’s actually pragmatism and a realistic view of their world circumstances. They find their affirmation and pride in other areas of life that are not monetary or success driven. In the book Generation Z Goes to College, the authors identified attitudinal shifts that were vast departures from those of Millennials. Generation Z self-identify as being loyal, compassionate, thoughtful, open-minded, responsible, and determined. 41% of Gen-Z young adults attend church, compared to 18% of Millennials.
The Annie E. Casey Foundation and Adecco identified some core characteristics within Gen-Z. The general takeaway is this: Gen-Z is much more risk adverse than Millennials. They ooze a sort of aspirational pragmatism in many areas.
- The study found lower alcohol and substance use (38%) in Gen-Z. (AECF)
- A 40% drop in teen pregnancy. (AEC)
- A 28% drop in the percentage of teens who did not graduate on time from high school. (AECF)
- They value having money, but 30% would rather save than spend. (Adecco)
- Gen-Z’s top goals for the next decade are finding their dream job, (32%).
- Compared to Millennials, who focus on financial stability, (34%) (Adecco)
High School graduation rates increased, but Gen-Z doesn’t consider higher education as a mandatory for professional growth. Instead preferring the entrepreneurial lifestyle and non-traditional forms of education. This is an outcome of growing up in the Great Recession and growing student debt concerns.
The 2016 Cassandra report found that Gen-Z puts high value on being productive and building skills. The dream job they crave is likely starting their own company (62%), which is likely rooted in their interests. 89% of Gen-Z prefer to spend their free time exploring creative endeavors, compared to the notorious “group hangs” that are a Millennial trademark.
With this intrinsic motivation, Gen-Z’s are more likely to have worked on a craft than Gen Ys at the same age (42% vs. 25%) and have shown interest in developing skills tied to how to start a business (58%), graphic design (51%), how to shoot/edit videos (50%) and how to build or create apps (50%).
Gen-Z puts more emphasis on personal connections and their parents’ (28%). While only 20% of Millennials show this trait, according to Adecco. This feeds into the theme of Gen-Z being “WE-focused” compared to Millennials’ “ME-focused” attitudes. Research across the landscape of Gen Z shows Gen-Z have a less rebellious attitude as a whole. They also have lower expectations of deservingness or getting things without earning them. Which is another departure from the Millennial mindset.
Gen-Z’s Digital Smarts are the new “Street Smarts”
From brand and purchasing perspectives, their pragmatic and realistic characteristics continue to shine through. The Cassandra Report found that Gen-Z are more drawn to narrative, storytelling. They specifically crave content from brands that meets the following criteria:
- Has realistic endings (67%), based in actuality that they can relate to.
- Want to engage with real people, rather than celebrities (63% vs. 37%)
- YouTube is the largest mainstream social channel to draw 85% of Gen-Z in.
- 40% of Gen-Z’s prefer that brands communicate with them in this medium. (read: they find you, not the other way around.)
Marketers, time to pause and digest the shifts of Gen-Z’s ideals and characteristics away from Millennials. It’s critical to understand the psychological differences between the two. The fundamental traits and habits expressed by Gen-Z are vastly different than those of Millennials. As such, Gen-Z needs different levels of attention and types of brand messaging. We must identify what Gen-Z’s values and expectations are and what they consider important. How Gen-Z expects to be marketed to by brands is a departure from what we, as marketers, have trained ourselves on with Millennials.
A large portion of Millennials were raised being coached-up, rewarded and even coddled during their upbringing. Leading to the infamous societal stigmas of narcissism and entitlement. Millennials also don’t express the “self-starter” mentality that is much more prominent within Gen-Z.
- Millennials are me-focused, and 84% express a distrust in advertisements.
- Gen-Z’s have less sense of self-importance. They more collaborative and willing to seek out information.
- Gen-Z’s want marketing messages to be authentic and unique. They want to feel that products and experiences have been made just for them.
- On social channels and apps, they want to ability to tailor make it to their own preferences. (Instagram, Pinterest, Spotify, Musical.ly)Gen-Z is social-app focused in the peer-to-peer messaging sense. They want their voices heard, either anonymous or within their core networks.
- Gen-Z uses Facebook Messenger instead of Facebook, WhatsApp, SnapChat, AfterSchool and yes, even Twitter.
- Gen-Z is well-educated and proactive in seeking out knowledge online. They also place less emphasis on traditional classrooms and higher-ed.
- Gen-Z are “digital-natives” and are well informed. This is why they are able to influence 93% of household purchases. These are no longer just kids asking their parents for things. They can back it up with reasoning and research.
Think about the old adage of being Book Smart versus Street Smart.
Digital Smarts are the new Street Smarts.
Gen-Z gravitates towards authentic content and experiences that they control and can create. They look to establish thought-leadership by sharing these creations with their peers and communities. (Color Therapy, Spotify, Musical.ly)
Why Gen-Z’s are Millenials on Steroids
Gen-Z have expressed differences in their behaviors and preferences. But they are also continuing down the path laid out by Millennials. We’re accustomed to certain Millennial behaviors and digital preferences. Some of these are even more prevalent within Gen-Z. Gen-Z share the shortened attention spans that their Millennial counterparts (<8 seconds). Gen-Z gets frustrated with digital experiences when expectations are not met. They will also dump brand loyalties much quicker than Millennials.
- 25% of 13-17 year olds have left Facebook in 2015. (Source: CMO.com)
- Both use 5 screens, on average. Smartphones, TVs, laptops, desktops and tablets. (Source: Sparks & Honey)
- Both generations are dropping mainstream social channels. Gen-Z gravitates to social networks like Snapchat, Secrets and Whisper. (Source: CMO.com)
- Both demand personalized shopping experiences. They are savvy enough to research and find exactly what they want. (Musical.ly, Etsy, Pinterest)
- Both are open to the idea of a “sharable economy”, or purchasing on their own terms. Peer-to-Peer and software marketplaces are where this is most prevalent. (UBER/Lyft, iGo/Getaround, AirBNB/VRBO, StyleLend/Rent The Runway, NETFLIX/GameStop)
- Both are the driving force behind user generated content. Above all, they find trust and decision making within their peer groups and influencers.
- Both want rewards for their brand affinity. They aren’t averse to taking to social media to share their good and bad experiences.
Marketer Takeaways for Reaching Gen-Z
Now, and in the future, marketers must key in on these behavioral nuances. We must ensure that messaging is meeting the needs of each generation to be set-up for success. There was no silver bullet approach for Millennials. There will not be one for Gen-Z or the generations that follow. There will always be a new hot trend, App or social channel that the next generation latches onto. You cannot, nor should you be on all channels all the time, even if Gen-Z is.
You will not be able to score A’s on every channel, and Gen-Z expects A’s. If you overextend, you are more likely to get C’s and D’s. Instead, focus on getting A’s on a few channels where you focus your efforts. A high GPA on a select set of channels will resonate better with Gen-Z than a lower GPA across many channels.
We can predict, but not know definitely what the next big thing will be with future generations. Your best bet is to dive into data and trends. Interpret it and determine how, or more importantly if it should affect your marketing strategy in the future.
Take the Pokémon Go craze we’re in the middle of. It’s unprecedented. You may also remember Slither, Clash Royale, Draw Something, Candy Crush and Farmville. They were big and then they were gone.
There will always be something new and shiny that gets marketers excited. In the process taking our eyes off the prize. Which is to align our brands with consumers for the long term. Instead, focus on serving up brand experiences that are Authentic, Interesting and Committed. Do not let fleeting trends completely derail big picture strategies. You’ll burn yourself and your resources out and see less success.
Gen-Z moves fast. You will guess wrong more often than you will guess right with your strategy and tactics. To overcome this, be aware, stay informed and make the educated strategic marketing pivots. Do this and you will be set-up for success when engaging Gen-Z in the future.
Research and Statistics Cited: