By: Morgan Ho
This is the second blog post in a series of articles on how to market to Generation Z.
Read the first article, “3 Tips to capture Generation Z on a mobile app”, here.
Generation Z, the generation typically defined as those born between 1996 and 2010, controls $44 billion dollars in spending and wields a considerable amount of influence in household purchase decisions. In fact, 93% of parents report that their Gen Z children influence family spending. But what makes their spending patterns unique? And what can marketers do to capitalize on Gen Z’s spending habits?
First, it is worth noting the world into which Generation Z was born. This generation has never known life without smart phones and social media. This, along with other major world events such as coming of age in the period post 9/11 and the Great Recession has greatly influenced their worldview and purchasing behaviors.
Growing up with uncertainty and technology, Gen Z understands the value of money and spends a considerable amount of time researching products. Here is what marketers should know to attract these young shoppers.
Concerned about money and financially savvy
Gen Z has learned about money by witnessing the hardships of the Great Recession from their parents and older Millennial siblings. A study in 2014 showed that 50% of Gen Z teens say they know more about money at their age than their parents did. More recently a survey conducted by Marketing Week reported that nearly 7 in 10 teenagers agree that saving money while they are young in preparation for the future is important to them. Northwestern students, Durrell Gil, 19, remarked “I’m quite frugal with my spending. I try my best to not buy things I won’t use.” North Park University student, Ransom Clark, 17, echoed similar sentiments, “I’m a saver…I spend nothing on a whim.”
Action Item for Marketers: Emphasize the value of your product
Gen Z has a clear understanding of the value of money and many are not as impulse-driven as teens of the past. When setting up a review platform for your products it may be helpful to have question prompts that guide reviewers to write about the specific value and functionality they get out of a product, thus appealing to the pragmatism of Gen Z buyers.
Online reviews matter more than you think
With technology at their fingertips Gen Z knows how to find out anything they want to know quickly. 85% report conducting research online and 52% report using YouTube or other social media sources as a research source for a typical school assignment. A Knowledge@Wharton article also observed out that Gen Z is more likely to “crowdsource” opinions on products. This could be from online review websites or via various social media platforms. The propensity to seek opinions from others shows the power of influencers in their lives. “Online reviews are simply the fastest way to get another consumer's report,” says Ransom Clark, in response to why he uses online reviews. Similarly, Durrell Gil, comments, “I feel like [online reviews] give you a more objective opinion.”
Action Item for Marketers: Prompt, monitor and manage your online reviews
Reviews are an important factor in Gen Z’s decision making. To encourage buyers to leave reviews marketers may want to implement a post-purchase email plan that prompts verified buyers of a product to write an online review. Consider also identifying and using Gen Z influencers instead of celebrities to do product reviews on popular social media platforms like YouTube. YouTube personalities are likely to resonate with Gen Z because they are more relatable and appeal to Gen Z’s propensity to seek peer opinions.
To learn more about SRC’s research on the merits of self-motivated vs. verified buyer reviews click here.