What You Should Know About Gen ZJanuary 07, 2019
They command over 40 billion in spending power. They influence most household purchases, from smaller items like food and beverages to more expensive items like furniture. Brand names factor into their purchase decisions. By 2020, they will comprise 40% of all US consumers.
Who is this influential consumer group? Gen Z, also called the iGen. Although different sources pinpoint their exact birth date range differently, most agree that this generation was born in the mid-1990s. They are the demographic group that is directly after Millennials.
We take a deep dive into Gen Z in this blog. We will examine their device usage, social media preferences, beliefs/values, spending habits, what influences their purchases, their purchasing behavior, how they feel about brands and what their advertising proclivities are.
This generation grew up amidst several incredible advancements, including the launch of Google in 1998. They saw many gadgets reach the marketplace, including the iPod, smartphones and tablets.
As a result, Gen Z is arguably more technology savvy than any other generation. The gadget of choice is overwhelmingly a smartphone, with iPhones far more prevalent than Androids.
Which devices do they use the most often?
• 75% Smartphone
25% spend more than 5 hours on their phones every day
They average 15.4 hours of smartphone use weekly
• 45% Laptop
They average 10.6 hours of laptop use weekly
• 30% Desktop
• 10% Tablet
• 8% Gaming Console
• 3% Interactive/Smart TV
• 1% Wearable Devices
How prevalent are smartphones in the lives of the iGen?
• 95% of Gen Z-ers have a smartphone
• 58% feel uncomfortable if they don’t have their phone for a few hours or less
• 59% have an iPhone
• 39% have an Android
• 35% use their phone for 5-9 hours/day
• 26% use their phone for 10/more hours/day
• 35% use their phones for 1-4 hours/day
• Females tend to use their phones longer than males
Females are more likely to use their phones to text or chat while males are most likely to use them to play games. 42% say the interact more with their phones than they do with people. But what exactly are they doing on their phones?
• 73% Texting/Chatting
• 59% Entertainment
• 58% Gaming
• 36% Schoolwork
• 28% Learning new things
• 17% Shopping/Browsing
Despite their tech-savviness, the iGen likes shopping in brick-and-mortar stores (more on this later). However, many use smartphones while they are in-store in several ways.
• 53% Look at items online that aren’t available in-store to see if there’s something else they would rather buy
• 52% Compare prices at other stores
• 51% Look for coupon/discount/promotion
• 50% Let family/friends know where they are shopping
• 46% Message family/friends to ask their opinions on what they are considering buying
• 27% Pay with phone
• 25% Connect with brand/retailer to contribute, collaborate or complain
The oldest of Gen Z was very young when the first social media site Six Degrees launched. As they aged, they saw the launches (and sometimes failing) of popular social media platforms like Myspace, Facebook, YouTube, Twitter, Snapchat and Instagram.
So which social media sites do they use? The social media sites used at least once per month include:
• 85% Instagram
• 84% Snapchat
• 47% Twitter
• 36% Facebook
• 23% Pinterest
Just because they use it doesn’t make it their favorite. Gen Z’s favorite social media platforms are:
• 46% Snapchat
• 31% Instagram
• 6% Twitter
• 5% Facebook
• 1% Pinterest
Their social media activities vary, but in general, much of it is social. Specifically, their frequent social media activities include:
• 72% Commenting on friends’ posts
• 62% Sharing their photos/videos
• 45% Sharing their opinions
• 36% Sharing blogs, articles or news
• 31% Reposting others’ content
• 31% Linking to songs/playlists
• 23% Sharing their location
• 20% Reviewing products/restaurants
Even more specifically, the way Gen Z uses social media varies by site. The way they use each social media site is as follows:
• 77% use Facebook on a regular basis but are much less likely to engage with content; they scroll rather than post, making it an information hub
• 39% check a group event on Facebook
• 36% create a group event on Facebook
• 63% use Instagram to be inspired; it is used as a place to show their best, carefully curated images
• 41% follow brands on Instagram
• 61% use Snapchat for a look into real life; it’s used for storytelling through photos; commonly used to supplement or replace texting
• 45% use Twitter to get information right now; the life expectancy of a Tweet that’s been retweeted is 18 minutes (it’s only a few minutes for Tweets if it hasn’t been retweeted)
• 40% post a video on Snapchat
• 36% post a selfie on Snapchat
Interestingly, none of the 7 different Gen Z studies we combed through for this article included YouTube on their lists of which social media sites Gen Z uses/their favorite social media sites. However, Piper Jaffray’s 36th Annual Taking Stock with Teens Survey (released in the fall of 2018) noted that YouTube consumption among Gen Z increased from 28.6% in 2017 to 33.1% in 2018. In this study, YouTube was categorized alongside video options, including Netflix, Cable TV, Hulu and other streaming services.
Gen Z-ers experienced some major social events that must have contributed to their beliefs/values. They were kids during the Sept. 11, 2001 terrorist attack. They were teenagers when the Supreme Court declared same-sex marriage legal.
Different issues have mattered most to different generations. For Baby Boomers, it was anti-establishment. For Millennials, it’s the environment. And for Gen Z-ers, it’s human equality.
What are the top social issues to Gen Z?
• 76% Educational Access/Affordable Education
• 70% Racial Equality
• 64% Gender Equality
• 61% Poverty
• 58% Income Equality
• 49% Sexual Orientation Equality
• 46% Labor Laws
• 39% Immigration Reform
Even though the environment is the defining issue to Millennials, it’s also important to Gen Z. The top environmental issues that matter to Gen Z include:
• 60% Recycling Waste/Trash
• 57% Water Conservation
• 49% Fuel-Efficient Transportation
• 45% Renewable Energy
• 42% Alternative Energy
• 42% Deforestation
Gen Z is open to different experiences. 41% of the iGen said they want to “try everything from opera to rock climbing.”
They also have definite opinions about success. Almost 7 in 10 Gen Z-ers believe that success is a product of hard work and not luck. Personal success is also the most important thing to 52% of Gen Z.
Gen Z has some dollars to spend. Their financial impact is $29 to $143 billion in direct spending. We will take a look at where they get their income from and how they spend it. But they also help spend money that’s not theirs—they influence 93% of all family and household purchases.
• 59% Allowance
• 24% Part-Time Work
• 22% Gift
• 22% Make it Online
• 16% Works for Themselves
• 9% Full-Time Work
• 64% Debit Card
• 42% Checking Account
• 26% Credit Card
• 55% Clothes and Shoes
• 52% Books and Music (physical copies)
• 52% Apps
• 50% Toys/Games
• 48% Events/Outings
• 43% Personal Care
• 42% Electronic Goods
• 42% Eating Out
• 37% Digital Streaming
Digital streaming services (including YouTube) account for 81% of Gen Z’s daily video consumption. Cable TV accounts for just 16%.
• 31% Sports Equipment
• 26% Food and Beverages
• 26% Travel
• 18% Household Goods
• 16% Furniture
Their parents spend an aggregate of $25 billion on their Gen Z children in such categories as clothing, entertainment and personal care items. Gen Z also wields considerable influence over household spending. But which specific products do they influence family spending?
• 77% Food/Beverages
• 76% Furniture
• 73% Household Goods
• 66% Travel
• 63% Eating Out
• 61% Electronic Goods
• 60% Clothes/Shoes
• 55% Personal Care
• 48% Events/Outings
• 41% Books/Music (physical copies)
• 30% Toys/Games
• 20% Apps
The top three factors that influence Gen Z’s purchases can be boiled down to 3 C’s:
• 61% Friends
• 14% Athletes
• 13% Bloggers/YouTubers
• 6% Actors
• 2% Singers
Of course, it’s not just people who influence their purchases. The top factors that impact where they shop include:
• 68% Product Choice
• 67% Store Location Proximity
• 66% Product Availability
• 65% Discounts/Coupons/Rewards
• 58% Pickup/Delivery Options
• 57% Product Research via Mobile
• 56% Fun In-Store Experience
• 51% Ease of Switching Among Channels
• 45% Choose Eco-Friendly/Socially Responsible Brands
Gen Z does their homework. 66% of Gen Z reads 3 or more reviews before making a first-time purchase. Two in 10 read 7 or more reviews before making that first-time purchase. Just 14% don’t read any reviews.
The average Gen Z shopper has high expectations for customer service, loves bargains but tends to look for them at the point of sale and is unlikely to join a shopper loyalty program in part because he or she don’t understand the advantages it provides.
Some of Gen Z’s distinct purchasing behavior includes:
• 65% Want to get real value for their money via discounts, coupons and a rewards program
• 56% Want a fun in-store experience to prevent boredom
• Fewer than 30% will share personal information
The tech-savvy generation relies on more traditional channels to complete a transaction. They prefer to make most of their purchases via the following channels:
• 67% Shopping in a Store
• 22% Web Browser
• 13% App
• 5% Telephone
There is no question that this generation likes to shop in a brick and mortar store more than they like to shop online. At least 4 in 10 and as many as 6 in 10 favor in-store shopping over online shopping.
• 42% Prefer brick and mortar stores to online shopping, according to the 2018 Profitect study
• 46% Use physical and online shopping channels equally, according to the 2018 Wirecard study
• 64% Prefer shopping in-store over online, according to the 2018 Understanding Gen Z Synchrony study
However, there is room for improvement in the brick and mortar space. Gen Z cited three improvements retailers can make to the in-store experience:
• Long Lines
• Limited Selection
Interacting with Brands
Brands are important to Gen Z. 45% said brand is the most important factor when making a purchase in fall 2018. This is a 12% increase from this same generation 6 years ago.
This generation articulated a strong sense of brand loyalty.
• 66% Will continue to buy for a long time from a brand they like
• 59% Trust the brands they grew up with
• 36% Feel a strong connection/loyalty to a brand
• New, Cool and Fun
mature markets: influences 47% of Gen Z
growth markets: influences 62% of Gen Z
• Eco-Friendly and Socially Responsible
mature markets: influences 35% of Gen Z
growth markets: influences 55% of Gen Z
• Brand Understands Me as an Individual
mature markets: influences 35% of Gen Z
growth markets: influences 53% of Gen Z
• Endorsed by Celebrities and Athletes
mature markets: influences 26% of Gen Z
growth markets: influences 45% of Gen Z
Do they follow brands on social media? Yes, more so than Millennials. However, Gen Z is less likely to engage with a brand’s content on social media channels. Rather, they keep an eye on brands’ social media pages. How many brands to they follow and on which social media channels?
• 73% of Gen Z follows a least 1 brand on social media (vs. 64% of Millennials)
• 52% of Gen Z follows 3 or more brands through social media
• 41% of Gen Z prefers to follow brands on Instagram (vs. 20% of Millennials)
• 16% of Gen Z prefers to follow brands on Facebook (vs. 38% of Millennials)
One interesting point about the iGen is that they want to contribute to a brand. If given the opportunity, they would engage with brands in the following ways:
• 44% Submit ideas for product design
• 43% Participate in product review
• 42% Participate in online game for a campaign
• 36% Create digital content for a brand
• 38% Attend an event supported by a brand
As Gen Z has grown up, so too has the evolution of digital marketing. Before we touch on how this generation feels about advertising and how they like to interact with brands, we will highlight some key changes/innovations in marketing that happened as Gen Z grew up:
• Internet-based marketing helped erode traditional channels. For example, the National Do Not Call List was created in 2003 and enacted in 2004.
• Content marketing (including blogging), social media, email, search engine optimization and pay-per-click advertising and marketing emerged.
• Companies and brands began integrating their online and offline marketing efforts to provide customers with multichannel and omnichannel experiences.
• Permission-based marketing started to take off.
• Technological advances allowed video, augmented reality and virtual reality to get integrated into marketing campaigns.
These broad changes to the marketing landscape helped shape what the iGen thinks about brands and companies. Their most common advertising beliefs include:
• 78% Like ads that show real people in real situations
• 71% Dislike ads that make life look perfect
• 71% lLke ads that show real people, not just gender stereotypes from the past
• 60% of Gen Z likes to see ads that show diverse types of families
This digitally-savvy generation uses these social media platforms to follow brands:
• 41% Instagram
• 16% Facebook
• 11% Twitter
• 5% YouTube
• 5% Snapchat
Unsurprisingly, Gen Z-ers prefer to hear from retailers/brands via digital channels. The channels they want to hear from brands the most include:
• 68% Instagram
• 41% Snapchat
• 41% Email
• 39% Text Messaging
• 30% Website Ads
• 20% TV/Radio
• 19% Twitter
• 15% Direct Mail
• 9% Facebook
About half of Gen Z is either “very satisfied” or “somewhat” satisfied with the responses they have received from a brand. Almost 1 in 4 have not received any response when they have reached out to a brand. There is clearly room for improvement here. So how satisfied are they with the response received from a brand?
• 18% Very Satisfied
• 35% Somewhat
• 23% No Response Received
• 20% Neutral
• 4% Dissatisfied