Move Over Millennials: Why Brands Need to Care About Generation Z

Post-millennials. Digitals. The Homeland Generation. Plurals. Centennials. The Founders. Generation Z.

These are all different names for the demographic of American consumers that were born after 1998, and this group is much more important than some of you might believe.

According to Goldman Sachs, 22 percent of the U.S. population are members of Gen Z - 70 million individuals and rising - and they are considered "more influential" than millennials, with approximately $44 billion of spending power in their control. Soon, Gen Zers will attend college and hold down office jobs, dramatically affecting the global economy.

These are some interesting statistics, but why exactly should brands care? Because brands that learn to target Generation Z can open up an entirely new market with huge revenue potential. "By better understanding Gen Z, we will be better able to identify the influence that they have both economically and more broadly," said Christopher Wolf, an analyst at Goldman Sachs Research.

So, what makes Generation Z different? Read below to find out the best approach in appealing to (and retaining) this digitally advanced demographic.
 

Born to be Digital 

Millennials might seem like the most tech-savvy generation, but Gen Zers blow them out the water when it comes to technical prowess. These individuals never grew up without the Internet, and they're connected at all times thanks to mobile devices. Goldman Sachs reported that over 50 percent of Gen Zers are on the Internet or their smartphones for more than 10 hours each day.

Source: GIPHY

Why you should care: This will have a profound impact on the economy. For one thing, Gen Z grew up with ecommerce and is very used to having items delivered to their front doors in a couple of days - 51 percent of homes with teens have Amazon Prime subscriptions, PiperJaffray found. Their expectations of brands are high in that respect, and any customer experience that isn't amazing simply won't be worth their time.

Furthermore, members of this digital-native generation are "builders," Theo Priestley of Forbes argued. That means that Gen Z is comprised of programmers, who not only use technology, but also create and manipulate it. Therefore, Priestley pointed out that "they will understand in far greater detail why something works, and why it has value, not the perception of value that millennials have."

Socializing as a Way of Life (Major Key!)

Gen Z loves social media - specifically Snapchat - but they're taking it one step further. In a TedX Talk, Elise By Olsen, a 16-year old editor-in-chief of Recens Paper, explained that her generation understands the influence that social platforms have on themselves and the world at large. In short, social media demonstrates the power of word-of-mouth. And for Gen Z, word-of-mouth is a huge influencer for their thoughts on products, entertainment, politics and much more.

Why you should care: Social media will continue to play a tremendous role in the lives of Gen Zers. They want to read peer reviews before purchasing anything, they will proudly proclaim their beliefs and they have the potential to start massive movements with as few as 140 characters. You must react to the social nature of Gen Z and become a part of the conversation if your brand hopes to remain relevant - embrace social media instead of avoiding it.

A Generation Fueled by Diversity

In 2020, half of Americans under the age of 18 will be a part of a minority or ethnic group, according to Goldman Sachs. As such, Gen Z is very diverse itself, and far more likely to accept diversity as a part of life. This generation is tired of gender stereotypes and other labels. They want to dress and act uniquely while still being treated equally.

Why you should care: Gen Z is not only accepting of themselves and others, but are genuinely proud of their individuality. That means you must cater to each of these people in a far more personalized manner than ever before.

Beyond that, the diversity of this generation represents a massive step forward socially and economically, and brands need to react by adopting similar values as an organization, both internally (corporate culture) and externally (customer service). Additionally, as Priestly explained, these builders embrace collaboration. You have an opportunity to develop new strategies for your workforce that are designed with open frameworks in mind, knowing that your future employees will thrive in those conditions

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Today's teenagers are tomorrow's influencers. 
Source: GIPHY (milkshakesandkneesocks.tumblr.com)

Financially Responsible

Sixty percent of Gen Zers said that earning "a lot of money" is a defining characteristic of success, Goldman Sachs reported. This led researchers to the conclusion that Gen Z is a group of fiscally conservative consumers. A member of Gen Z corroborated that analysis.

"We're more conservative when it comes to safe jobs, committed marriages and working with a team," Boston Globe's Isavri Mohan wrote. "We want fulfillment and excitement in our jobs, we want to move out from our parents and we want close friends. We're risk-averse, we wear seat belts and we drink less alcohol. We don't believe that everyone can be Steve Jobs."

What you should care: Gen Z wants to see value, and they won't part with their dollars until you prove that your products and services - that your brand - offers something tangible. You can call it risk-averse, but these individuals really just think holistically. That Gen Z characteristic can land dishonest brands in hot water.

At the end of the day, call Gen Z whatever you want, but don't call them millennials and don't forget how influential this up-and-coming generation truly is. These post-Internet, digital-native consumers are your new customers. It's time to start acting like it.