As people, we have plenty of labels that organizations and companies can use to define, segment, and ultimately market to. Gender, race, where we live, how much money we make, relationship status, education level, etc. can all be used to predict behavior and how we shop and buy products and services. Another HUGE demographic factor that is often looked at is age and generation. By researching and defining the target audiences’ generation, businesses can structure how they advertise and sell to them. In 2020, it’s almost impossible to have not heard the terms “Millennial”, “Baby Boomer”, or “Gen X” in a sales and/or marketing context.
Companies are constantly clamoring to reach and sell to the newest generation (that have the buying power, at least). In recent years, it’s been Millennials that have come into the workforce that has been at the center of the advertising and sales frenzy. However, entering a new decade is going to introduce a whole new generation of shoppers: Gen Z.
Who is Gen Z?
So, who is Gen Z and how are they different? According to Business Insider, “Generation Z (aka Gen Z, iGen, or centennials), refers to the generation that was born between 1996-2010, following millennials. This generation has been raised on the internet and social media, with some the oldest finishing college by 2020 and entering the workforce.” Gen Z is basically our “newest adults”. What makes this generation particularly interesting is they are considered the first generation of “true digital natives.” This means that “from earliest youth, they [Gen Z] have been exposed to the internet, to social networks, and to mobile systems. That context has produced a hypercognitive generation very comfortable with collecting and cross-referencing many sources of information and with integrating virtual and offline experiences.” Here are a few ways that they’re changing from the generation before them:
Gen Z Is Motivated By Security – GenZ experienced the Great Recession of the late 2000s as children. The anxiety of financial insecurity may be what is driving this generation towards paycheck over purpose as compared to their Millennial counterparts.
Gen Z May Be More Competitive – Rather than work in a team or collaborative setting, Gen Z would rather work alone and be judged on their own work.
Gen Z Wants Independence – Independence is linked to Gen Z’s competitive nature as well. They like to set and manage their own schedules and projects. An increasing number of Gen Z are skipping college and higher education and entering the workforce to avoid crippling student debt.
Gen Z Will Multitask (More Than Millennials) – Having been surrounded by the Internet and technology a majority of their lives, Gen Z is skilled at being able to flip flop (successfully!) between tasks, programs, apps, and locations, with little attention disruption.
Gen Z Is More Entrepreneurial – According to Small Business Trends, Gen Z is 55% more likely to start a business than Millennials. The Huffington Post reported that 72% of Gen Z high school students want to start their own business.
Gen Z also differentiates itself from other generations by being the most ethnically-diverse and largest generation in American history, making up around 27% of the US population. A study was conducted on members of Gen Z and their influence on consumption patterns in Brazil. The study revealed purchase behaviors that were all tied back to one core value – the truth.
Purchase Behaviors Influencing Business
How is the truth influencing our young adults purchase behaviors? McKinsey & Company suggests that generations of people and consumers are shaped by the context in which they are born. They break it down like this:
“Baby boomers, born from 1940 to 1959, we’re immersed in the post–World War II context and are best represented by consumption as an expression of ideology. Gen Xers (born 1960–79) consumed status, while millennials (born 1980–94) consumed experiences. For Generation Z, as we have seen, the main spur to consumption is the search for truth, in both a personal and a communal form.”
There are a couple of insights that businesses can gather from what is known about Gen Z. Searching for the truth implies that Gen Z will likely do some research before making a purchase, not only on the product but the company itself. Being a digital native means that they’re likely shopping, purchasing, and sharing online through multiple platforms. McKinsey and Company further break down Gen Z’s core value of “finding the truth” into four behaviors that can be seen.
“Undefined ID”: Gen Z are looking to experiment and find their truth of who they are as individuals. This can be seen in how individuals identify through gender, sexuality, and religion, as well as purchases. Gen Z is pushing ambiguity and inclusiveness when it comes to how they identify.
“Communaholic”: As arguably one of the most inclusive generations, Gen Z seems to move between groups and communities freely, both online and in real life, and they find that it comes naturally to them. As such, acceptance and openness are highly valued among this generation.
“Dialoguer”: In the spirit of radical inclusiveness, Gen Z members look to start conversations rather than confrontations. They also appear to be more forgiving towards companies – “Thirty-nine percent of the people in this generation, for example, expect companies to answer customer complaints in the same day; for the three earlier generations, the percentage is much higher—52 percent.”
“Realistic”: With so much knowledge in the palms of their hands, Gen Z tends to be more analytical. Many look at the big picture and are less idealistic than Millennials. For example, McKinley & Company points out that many Gen Zers are already employed, value full-time work over part-time or seasonal, and understand that job stability outweighs a large salary.
So, what can businesses and companies take away from these kinds of behaviors?
Be authentic and truthful.
Offer consumption that can be used as a form of expression.
Personalization over mass production.
Be inclusive, accepting, open-minded.
Conversation over conflict.
Utilize ethical business practices.
True Merchant Can Keep Up with Gen Z
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For more information on how True Merchant can help you as an independent contractor or business owner, please contact us today for a free consultation.
