5 Generation Z Statistics on Spending Habits That Marketers Need to Know
The oldest members of the Generation Z cohort are just beginning to come of age, making them an essential consideration for your marketing strategies. Gen Z’s buying power is already undeniable, and marketers who want to remain relevant and capitalize on this nascent market must understand Gen Z’s consumer behavior and unique needs.
Gen Z, defined as those born after 1998, commands $44 billion in buying power—nothing to scoff at, surely—but by 2020, it's projected that Gen Z’s purchasing power will command nearly 40 percent of all consumer shopping. What’s more, 82% of parents say that their Gen Z children are already influencing spending habits.
By 2020, Gen Z will command 40% of all consumer shopping.
Understanding the differences between Gen Z and Millennials
Though it may be tempting to lump Gen Z and Millennials together, it’s crucial that marketers understand how and why these generations have unique consumer behaviors, driven by unique cultural and technological environments. While Millennials were the first generation to grow up having access to the internet, Gen Z was born into an inexorably connected digital world.
For example, an important Gen Z characteristic to note is that they’re almost always online. In fact, a recent study found that 74% of Gen Z members spend five hours or more every day online. Marketers wondering how to speak to Gen Z need to find ways to connect with them online, which means catering to their unique preferences. To learn which preferences Gen Z, and many other online demographics share, check out our in-depth Forrester Report: Getting to Know Your Customers. Though they’re not so distant age-wise from the generation currently cornering the market — millennials — Gen Z has spending habits all their own.
To help your brand speak and connect with this audience, we’ve collected a few of the most important statistics on Gen Z’s spending habits:
1. Gen Z uses smart devices for on-the-spot research
47% of U.S. Gen Z consumers research items on mobile devices while shopping at brick-and-mortar locations
(Source: Retail Touchpoints)
Gen Z uses their smartphones and tablets as research tools both before they set foot in a brick-and-mortar store and while inside it. So what do they research? 53% check online for other items they prefer that are not available in the store where they are; 52% compare the retail price with competitors; and 51% search the web for a coupon, discount, or promotion.
Marketers should note Gen Z’s emphasis on research, as they need to offer shoppers detailed information about products and services through digital channels as well as physical ones. By establishing your website or online resource as an authority, you can guide Gen Z’s shopping habits, cultivate trust, and help the Gen Z demographic ultimately gravitate towards your product, service, blog, and more.
2. Gen Z cares about speed and customer care
60% of Gen Z folks are more likely than average consumers to hang up if their call isn’t answered in under 45 seconds
(Source: Business Wire)
Because Gen Z’ers were born into the internet age, they expect customer care to be remarkably fast and agile. This is especially true with Gen Z on social media. Consumers are increasingly using social media instead of phone calls to address their customer service needs which means that individualized, timely care will only become more important as Gen Z grows into its buying power.
Gen Z values a fast, fluid customer service response more than other groups, meaning brands need to find a way to seamlessly connect interactions, as consumers hop between channels. For example, a Gen Z customer who raises an issue on Facebook should still be able to get an update on the situation through Twitter. This ties back into the previous point that Gen Z folks rely on fast, effective online research to find answers to their issues. By providing a variety of avenues to solve those customer care questions, you can further build trust in your Gen Z consumer base and curry their purchasing power.
Would you like to improve your Gen Z customer support? Learn how Khoros Care can help your brand scale your customer service so you can respond quickly and personally to inquiries that span multiple channels.
3. Gen Z seeks out collaborative, interactive environments
42% percent of Gen Z respondents in a recent study said they would participate in an online game for a campaign; 43% would write a product review
These two numbers tell marketers something important about Gen Z: they’re looking to get involved with brands and even invest their own time and energy into building a brand’s reputation. Gen Z loves creative campaigns that encourage collaborative engagement, which makes social media the perfect place to connect with this group. Brands should use this as an opportunity to create personalized, interactive experiences that enable consumers to contribute to something that feels larger than themselves. This is one of the reasons why services like Twitch and YouTube Gaming resonate with Gen Z. They can interact with their favorite streamers, be part of the community, and play interactive games with the streamer and chat.
Streaming has become an extremely lucrative business for gamers and content creators. According to Business of Apps, on average, expert streamers can make between $3,000 to $5,000 each month playing around 40 hours a week. That specific number doesn’t include ad revenue, which averages about $250 every 100 subscribers. Gen Z is spending time and money in these types of interactive channels, making places like Twitch and YouTube Gaming an important battleground for marketers looking to harness Gen Z spending power.
4. Gen Z expects a great user experience
60% of Gen Z shoppers won’t use apps or websites that load slowly or are difficult to navigate
Efficiency is the name of the game for Gen Z. In fact, a recent survey found that nearly half of the Gen Z demographic say that the ability to find things quickly is the most important aspect of shopping for them. At the most basic level, retailers must ensure their online assets run smoothly and provide a judicious layout and functionality to earn Gen Z’s purchasing power.
Beyond just site speed, efficiency and intuitiveness are still crucial in everything brands do—especially with regards to social media customer care. Although the majority of Gen Z spends five or more hours online per day, they don’t want to wait around for brands to respond to their issues. Brands need to emphasize social media customer care, as providing a fast, personalized response is akin to having a quick, easy to use website. By combining a personalized user experience with a fast and intuitive website, brands can better connect with their Gen Z consumers.
5. Gen Z values authenticity over celebrity
63% of Gen Z members prefer real people to celebrities when it comes to advertisements
Gen Z’s preference for real people demonstrates the importance of both transparency and trust. Influencers can still be effective spokespeople for brands targeting Gen Z, but they must be speaking from an authentic place that aligns with the brand’s clearly articulated values.
Gen Z members are digital natives, meaning they cannot remember a world in which the internet wasn’t constantly available to them. This is a new characteristic for marketers to consider, as many millennials (the generation immediately preceding Gen Z) didn’t have regular internet access until they were well into their teens, and most didn’t have smartphones until after college. Though millennials have wasted no time becoming digitally proficient, the experience of Gen Z is completely different.
This ties back into Gen Z being thorough researchers when buying a new product or service. If an influencer or celebrity acts as a spokesperson for a product or service that they don’t use or believe in, it can be difficult and dangerous to hide. The information can get out and social media will make it nearly impossible to obscure. A dishonest marketing campaign that can be unraveled with research or a quick screenshot can do significant harm to a brand and degrade Gen Z’s trust. It’s easier and safer to be honest with your Gen Z audience. That honestly will build trust and that trust will pay dividends as Gen Z’s spending power grows.
How can marketers speak and connect with Gen Z?
By now you’ve probably heard the statistic claiming millennials’ average attention span is only 12 seconds long, but Gen Z has an even shorter 8 second attention span. We’re not talking about a generation of attention-deficient people, writes READY Education, but rather a generation with an “eight-second filter.” Brands don’t have any time to waste in capturing Gen Z’s attention, and once they do, they’ll have to keep it by being responsive and engaging.
Technology like Khoros can help brands reduce their response time on social media and capture performance data to create more relevant social media marketing content—both key to courting the Gen Z market. To learn more about this demographic and others, read our in-depth Forrester Report: Getting to Know Your Customers.
If you’re ready to create the user experience that Gen Z expects, we invite you to schedule a demo and find out how Khoros can help you create customers for life and capitalize on Gen Z’s growing purchasing power.