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What You Should Know About Gen Z

January 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.

Device Usage

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

Social Media

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.

Beliefs/Values

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.

Spending

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.

Young Gen Z adults (ages 18-24) have an aggregate income of $463 billion while younger Gen Z-ers (ages15-17) have an aggregate income of $17 billion. Where do they get their money from?

59% Allowance

24% Part-Time Work

22% Gift

22% Make it Online

16% Works for Themselves

9% Full-Time Work

How good is Gen Z at managing their finances? The average Gen Z has accumulated $8,003 in debt and saved an average of $1,628. What methods do they use to spend their money?

64% Debit Card

42% Checking Account

26% Credit Card

The average Gen Z-er has an income of $5,356.94 each (we calculated this by dividing their aggregate $463 billion income by the 86.43 million population). So what do they spend their own money on?

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

Purchase Influences

The top three factors that influence Gen Z’s purchases can be boiled down to 3 C’s:

1. Chums

2. Choice

3. Convenience

People play a large role in Gen Z’s purchase decisions. For example, 46% follows more than 10 influencers on social media right now. Who influences Gen Z’s purchases?

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.

Purchasing Behavior

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

Crowds

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

Gen Z listed specific traits that makes choose a brand.  What makes them choose brands?

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

Advertising

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

Service Tags: 
Marketing Strategy
Multi-Channel Campaign
Planning/Consultation
What You Should Know About Gen Z | Fisher

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