Gen Z – the generation born between 1997 and 2012 – is nearly 70 million strong in the United States. Gen Z is coming of age with increasing economic power, significant tech savviness, and non-negotiable altruistic values. Marketing to Gen Z should be a high priority for brands, as nearly two-thirds of them have reached adulthood. This post explores Gen Z’s economic power, values, and marketing preferences. We will also discuss some brands that successfully and innovatively marketed to Gen Z consumers.
Thrifty but Burdened
Gen Z consumers rarely spend money on luxury goods, and prefer to buy pre-used items, partly because they are thrifty and partly because they are concerned about the environment. But Gen Z also lives on a financial cliff: many have astronomical student loans to repay; inflation has driven up the costs of food and housing; and Gen Zs tend to carry higher amounts of credit card debt than previous generations did at their age. They are also more likely to take advantage of Buy Now, Pay Later (BNPL) plans. Many Gen Z consumers are delaying key life milestones, such as home buying, marriage, and children. Indeed, a large proportion of Gen Zs surveyed don’t believe they’ll ever be able to afford a home.
Gen Z consumers had nearly $360 billion in disposable income in 2021. In addition to holding full-time jobs, nearly half of all Gen Z adults take on gig work like Uber or DoorDash, do freelance work, or operate some kind of side hustle. Gen Z is expected to make up almost 30% of the U.S. workforce by 2030. Gen Z is also thrifty, saving one-third of their income, on average. They are also participating in workplace retirement plans like 401ks at much younger ages than Millennials and Gen X workers before them, saving as much as 20% of their gross income in these plans. They’re also enthusiastic about investing, are open to digital assets like cryptocurrency, and likely to use investing apps like Robinhood.
Altruistic and Self-Aware
Gen Z consumers are highly altruistic, but they don’t ignore their self needs, either. This generation is preoccupied with social justice and embraces racial, gender, and LGBTQ equity. Tech savvy, Gen Z is quick to research activities by various institutions – good and bad – and will vote with their dollars. Gen Z consumers are also very eco-conscious and will spend more money for a product that is environmentally sustainable. They are also willing to buy pre-owned clothes, cars, and other products, for the very same reason.
But self-care is also a priority for Gen Z, especially mental health. More than two-fifths of Gen Z consumers struggle with depression and feelings of hopelessness. This generation – because of all the available information – agonizes over the future, finances, and relationships. Many Gen Zs have also endured cyberbullying, social media induced peer pressure, and loneliness (especially during the pandemic). Hence, Gen Z wants brands’ marketing and products to acknowledge their mental health needs. And Gen Z spends a lot on self-care: meditation apps like Calm and Headspace are popular, as are fitness apps, gym memberships, and healthy food. Gen Z also spends twice as much on skin care products than Baby Boomers.
This generation values being present and mindful. And Gen Z likes personalization. They are more likely to provide their data and pay more for experiences that are customized for them. Gen Z is also more likely to buy customizable products and abandon websites that don’t predict their preferences.
Influencers and Authenticity Resonate
Marketing to Gen Z should reflect their digital savvy, be interactive, and incorporate influencers. Gen Z is the first generation that grew up entirely in the Internet age. As a result, most are comfortable with technology and rely heavily on social media and content sites. More than 70% use social media sites like Instagram to find new products and almost 30% will purchase them directly within the social media app.
Much more than older generations, Gen Z streams videos and music, listens to audiobooks and podcasts, and plays video games. They use their smartphones for making purchases and obtaining information. And they are likelier to get their information from influencers on TikTok and other social media sites, rather than from traditional media outlets. Of course, because of all this readily available content, Gen Z’s attention spans are very short. Marketing aimed at Gen Z should therefore grab their attention quickly. Finally, Gen Z wants marketing to them to be authentic: actual product users, not paid actors or models.
“Flush Your Ex” and Other Genius Ways Brands are Marketing to Gen Z
Some companies have marketed to Gen Z quite well, and some campaigns were particularly innovative. Who Gives A Crap, a manufacturer of eco-friendly toilet paper, did a “Flush Your Ex” campaign for Valentine’s Day. Gen Z Consumers were encouraged to send in their old love letters, allowing Who Gives A Crap to turn it into “Flush Your Ex” toilet paper. Since WGAC gives half of its profits to sanitation and hygiene charities, this and many of its other campaigns resonate well with Gen Z.
Cosmetics brand Glossier had its users generate content on social media showing how they use the products. Gen Zs loved seeing the users with all their imperfections, instead of the highly polished images found in cosmetics ads. Glossier effectively turned these users into strong brand ambassadors.
Pepsi reached out to Gen Z through a combination of music and podcasts in it’s “My Music, My Way” campaign. Gen Zs were encouraged to create their own music on Pepsi’s digital music platform, with the aid of AI. Since Gen Zs had listened to over three billion podcasts and nearly 600 million songs on Spotify in the first half of 2023, Pepsi found this to be an ideal platform to meet Gen Zs where they were and get them to interact with the brand. All these campaigns were successful because they engaged Gen Z on social media; were authentic; utilized influencers; and/or appealed to their key values.
Conclusion
The rising economic clout of Gen Zs cannot be ignored. Marketers will need to appeal to this generation’s adherence to social responsibility, especially diversity and environmental consciousness; their financial goals and worries; and their prioritization of mental health and self-care. Marketers should meet Gen Zs on their preferred platforms such as social media and streaming services and use influencers in their campaigns. Marketing to Gen Z should be authentic and transparent, reflecting true users of the product. Marketers willing to meet Gen Z’s expectations could reap the rewards of strong sales, firm brand equity and loyalty, and a commanding market share within this segment.
