Generation Z Buying Power:
5 Tips SMEs Can Use to Target Them

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Generation Z (or Gen Z) is the demographic group that comes after Millennials. In general, these people were born in the mid-to-late 1990s and the early 2010s are seen as their ending birth years.


This generation is quite unique, as the conditions and the environment of their childhood are different compared to all previous generations.


Logically, this has a huge impact on their behavior towards businesses. Generally, companies should be aware of the three implications that consumption has for this generation: 

  1. Access rather than possession
  2. An expression of individual identity
  3. A matter of ethical concern

Combined with technological advances, this generational shift is transforming the consumer landscape in a way that cuts across all socioeconomic conventions and extends beyond Gen Z.


But what does this exactly mean for companies? It means that you need to adjust your business operations if you want to target Gen Z.

Difference Between Gen Z's and Millennials

Let’s start by mentioning that Millennials were born between 1980 and 1995, while gen Z’s are the group born between 1996 and the early-to-mid 2000s. Therefore, it is safe to say that these two groups have similarities to some extent.


However, the most prominent differences between these groups lie in the way they deal with education, their parents’ influence, and life paths.


To be precise, Gen Z is more curious than Millennials regarding the cost of education, they do not value stability as much as Millennials, and they are not eager to follow in their parents’ footsteps.


Millennials do not care about how others see them, while Gen Z places a special emphasis on personal success and how they are perceived in society.


Moreover, one very important difference between these groups is that Gen Z tends to buy products because of the brand name and reputation. Millennials go for products that may not be as popular but are sure to make them satisfied. 


Consequently, Generation Z is ready to spend money on products that help them portray a certain image compared to Millennials who do not care as much about the way others see them.


Finally, another important difference that all businesses should be aware of is that Gen Z expects a lot of innovation from companies. Millennials believe that companies bring innovative products to the market based on customer needs and value, but Gen Z expects more innovation because they grew up during a period of rapid technological advancements.

Why Is It Important To Gen Z

First of all, it is worth noting that Gen Z is the generation of the future. After all, 2020 was the year that marked Gen Z’s overtake of almost 40% of all consumer shopping. Even though the oldest members of the Generation Z group have yet to grow, it is clear that their spending power is already huge. As a business owner or a marketer, one has to be aware of this.


Generation Z, as it was mentioned, controls a large market share, and they record a whopping $44 billion in buying power.


Moreover, Generation Z has already made a direct impact on household purchases. According to a report by CASSANDRA, 93% of parents today claim that their children impact their family purchases.


Therefore, slowly starting to target Gen Z will most certainly have great effects in the long run. Keep in mind that in a few years, this group will account for more than half of all consumer shopping.

5 Tips To Appeal To Gen Z

Now that you can make a distinction between Gen Z and Millennials and know why it’s crucial to have a tailored strategy for Gen Z, let’s move on to some useful tips that should help you appeal better to the emerging generations.

1. Focus on your digital channels as much as your physical ones

It should be emphasized that Gen Z is an ‘online’ generation. They spend a lot of their time online and almost anything they plan to buy goes through a ‘background check’ on the internet.


People aged 16 to 24 spent an average of seven hours per day online in 2019, three of which were spent only on social media, according to GlobalWebIndex. However, in markets such as the US, growth on platforms like Snapchat and Facebook is slowing, while a new platform like TikTok grew rapidly in 2019.


This is not a simple case of shifting marketing spend to new websites. Brands now rely heavily on influencer partnerships, paid posts, and adverts between videos on YouTube. In order to reach Gen Z in the online communities they engage with, unidirectional paid posts from an influencer might not do the trick.


Companies are slowly shifting to this marketing method where advertising budgets are increasingly devoted to social media platforms. Digital ad expenditure across social media platforms will reach as much as $517 billion worldwide by 2023.


Therefore, in order to connect with this age group, businesses have to pay attention to websites (social media platforms and networks) favored by these individuals. So, think about offering shoppers information about your products and services through digital channels just like you would do if they came to your physical store.

2. Customer care is incredibly important, especially on social media

This is of the utmost importance. Generation Z values quick and fluid customer service responses more than any other group. As a brand, it is your job to find a way to seamlessly connect interactions as consumers switch between channels.


These consumers spend a lot of time on social media networks and that means that you need to be present on major platforms such as Facebook, Twitter, Instagram, and Snapchat. The goal of this is to enable these younger individuals to reach out to you easily and across numerous platforms.


Additionally, young customers want answers as soon as possible. A study revealed that 42% of customers expect online brands to get back to them within an hour. If the biggest part of your market is composed of Millennials and Gen Z youngsters who were born and raised in the digital age, they will expect you to attend to them quickly.


Finally, these individuals like to find solutions to their problems on their own (they Google it or read FAQ pages). They do not ask for assistance unless they really need it. So, it is important for a business to maintain a user-friendly and seamless design and experience across digital channels.

3. Engage in creative campaigns to enhance engagement

Generation Z adores creative campaigns that encourage collaborative engagement. Contrary to older generational cohorts, Gen Z is looking to get involved with brands and even invest their own time and energy into building a brand’s reputation.


So, it would be wise to encourage interaction or pose questions through social media pages you own. For instance, you could implement interactive features such as polls that not only allow you to learn about customers but also win their attention easily.


Also, you should encourage engagement through tagging, as Gen Z has the need to produce interactive content. For instance, you could encourage followers to produce and share content coupled with your business’s hashtag.


Additionally, you should allow customers to tag themselves at your physical location. Their friends will see where they are and they will tap on the location tag of your business.


Be straightforward with Gen Z about what you want. Let these actions serve as a CTA for any given post. Social media platforms are great for connecting with younger generations. They bring personalized, interactive experiences that enable consumers to contribute to something that feels bigger than themselves.

4. Ensure your platforms are efficient

Your social media pages need to be perfect. They should provide accurate and up-to-date information, run smoothly, and your customer service agents should reply to answers your business receives through the inboxes.


Gen Z loves to engage with brands across platforms, using social media to engage with a brand the most. Social media platforms are followed by the email address, and chat features come in just before a company’s blog.


Therefore, you should take great care of these platforms:

  1. Social media pages of your business
  2. Your business’s email account
  3. Chat functionalities (on the company website and on social media pages)
  4. Company blog (comments)

It is clear that your Gen Z audience will likely connect with you on social media as well as through email, so don’t send the same message on every single platform you use. Consider how different marketing platforms work together to augment the effectiveness of one digital marketing campaign instead of considering each channel individually.


Maintain the right branding message across every individual platform and based on its own communication style. You might want to switch up the tone of your message to coincide with the way Gen Z uses each platform, but your overall message needs to stay the same.

5. Emphasize transparency and trust

Gen Z is the cohort that grew up with the rise of the internet, so they are very proficient when it comes to the way the online world works. This also means that they are extra careful when browsing the internet and even more careful when it comes to spending money. In other words, they are quite skeptical about most businesses.


That is why you need to prioritize transparency and trust. Do not try to use traditional advertising and marketing methods to win them over. They trust people, not big names and brands.

One effective marketing method that really makes a difference with Gen Z is influencer marketing. Influencers can be effective spokespeople for brands targeting Gen Z.

However, they should be speaking from an authentic place that aligns with the brand’s clearly articulated values. On top of that, trustworthy influencers will not partner up with any brand that offers a fatty paycheck. Keep in mind that Gen Zers are digital natives and they can easily distinguish between authenticity and dishonesty. 

Example of social media backlash

Adidas once tried to be witty with a hot topic, which eventually produced a massive backlash that cost the company quite an amount of money.

The Boston Marathon horror happened in 2013 when a lot of runners ended up badly hurt due to the terrorist attack. Following the event, Adidas sent out emails to customers who had finished the race with the subject line ‘Congrats, you survived the Boston Marathon.’ As a consequence, the backlash on Twitter and other social media platforms was huge.

Wrap Up

Generation Z is a truly unique group of individuals. In order to target them properly, you need to understand their needs and preferences.


Hopefully, you now have a better understanding of their behavioral patterns and shopping habits. Remember that learning more about them is important, since they are the future of this world. And if you want your business to thrive, you need to appeal to them.




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