Generation Z Buying Power: 5 Tips SMEs Can Use to Target Them
8 minute read
Generation Z (or Gen Z) is the demographic group that comes after Millennials. Members of this group were born from the mid-to-late 1990s to the early 2010s.
This generation is uniquely digital, having grown up with advanced technological conditions and environments from early childhood.
They differ from previous generations in a variety of ways, and this has a huge impact on their behavior towards businesses. Generally, companies should be aware of the three driving forces behind consumption for this generation:
- Access rather than possession
- An expression of individual identity
- 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
- Why Is It Important To Gen Z
- 5 Tips To Appeal To Gen Z
- Wrap up
Difference Between Gen Z’s and Millennials
As Millennials preceded Gen Z, 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. 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. 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.
This means Gen 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
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 Gen Z group have yet to grow, it is clear that their spending power already holds enormous implications. All business owners and marketers have to be aware of this.
Generation Z, controls a large market share, and they record a whopping $44 billion in buying power. Generation Z has even 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 understand the distinction between Gen Z and Millennials, and you 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 consumers.
1. Focus on your digital channels as much as your physical ones
It’s quite clear 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 on social media alone, according to GlobalWebIndex. However, in markets such as the US, growth on platforms like Snapchat and Facebook is slowing, while new platforms like TikTok grew rapidly in 2019.
This is not a simple case of shifting marketing spend to new websites. It now makes sense for brands to rely heavily on a combination of 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
Customer care is of the utmost importance nowadays. 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, Gen Z likes 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, smooth navigation, and responsive customer service agents who reply to answers your business receives through the inboxes.
Gen Z loves to engage with brands across platforms, using social media to interact 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.
You need to take time to prioritize these platforms:
- Social media pages of your business
- Your business’s email account
- Chat functionalities (on the company website and on social media pages)
- Company blog (comments)
Seeing as your Gen Z audience will likely connect with you on both social media and email, 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 independently of one another.
Maintain the right branding message across every individual platform and based on a consistent communication style that can be tweaked per platform. 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 emphasize 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.
This is why influencer marketing is such a widely used marketing method that really makes a difference with Gen Z. Influencers can be highly 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, the most trustworthy influencers will not partner up with just any brand that offers a large paycheck.
Keep in mind that Gen Z’s are digital natives and can easily distinguish between authentic influencers and sell-outs.
Example of social media backlash
The emphasis on authenticity also means Gen Z doesn’t respond well to brands that poke fun at serious issues.
Adidas once tried to be witty with a hot topic, which eventually produced a massive backlash that cost the company quite a large amount of money.
During the Boston Marathon horror of 2013, many runners ended up badly injured due to a terrorist attack. Following the tragedy, Adidas sent out emails to customers who had finished the race with the subject line, “Congrats, you survived the Boston Marathon.” They had to face the consequences of colossal backlash on Twitter and other social media platforms.
Make sure your social media manager keeps this in mind when joining in the conversation surrounding a touchy viral subject.
Generation Z is a truly unique group of individuals. Now that you are equipped with a better understanding of their behavioral patterns and shopping habits, you can truly cater to their needs and preferences.
Remember that constantly adapting and keeping a finger on the pulse is important because the younger generation is the future of this world. If you want your business to thrive, you need to stay with the times and offer a product Gen Z can’t refuse.
Talk to our sales team to get started!