What Marketers Should Know About Generation Z

The first generation of true digital natives is growing up – and marketers are paying attention to their priorities and habits.

People in Generation Z – born after 2000, following millennials – are unique in that they have never known a time before technologies such as smartphones, social media platforms and streaming media services. And according to a new study from IBM and the National Retail Federation, this experience has shaped Generation Z’s expectations and behaviors as consumers. Here are some of the most interesting highlights and takeaways from the research.

How Important is Generation Z?

According to one report, this group made up an estimated 26% of the global population in 2015 – and that percentage is expected to reach its height in 2020 at 33%. In the United States, that share was 19% in 2015, and is predicted to rise to 25% in 2020.

In the U.S., consumer spending on Generation Z totaled $829.6 billion in 2015. Gen Zers report having a considerable influence on household spending; 77% say they influence their families’ food and beverage purchases; 73% for household goods, 66% for travel, and 60% for clothing and shoes.

This group has access to $44 billion in buying power; 75% say they spend more than half of the money that’s available to them each month.

Surprisingly, 67% of Gen Zers shop in a brick-and-mortar stores most of the time. Another 31% shop in-store sometimes.

How Generation Z Uses Technology

The IBM/NRF study found that 74% of respondents spend their free time online – with 25% online five or more hours a day. Mobile devices are the most popular way Generation Z goes online (75%), followed by laptops (45%) and desktops (30%).

While 73% of Gen Zers use their phones mainly to text and chat with friends and family, many are willing to open up their conversations to include brands:

• 36 percent would create digital content for a brand
• 42 percent would participate in an online game for a campaign
• 43 percent would participate in a product review

Most respondents are cautious about sharing personal information with brands, however:

• Less than 30% are willing to share health and wellness, location, personal life or payment information
• 61% say they’d feel better sharing personal information if they knew it would be securely stored and protected

Gen Z’s High Expectations

When it comes to how they spend their time and money, Generation Z is savvy, demanding and impatient. The study found 52% of respondents will switch loyalty from one brand to another if a brand’s quality isn’t adequate.

When deciding which brands to support:

• 66% say product quality and availability are the most important factors
• 65% focus on value
• 45% choose socially conscious and eco-friendly brands
• 46% say friends’ recommendations and opinions matter

Generation Z also has little patience for a poor user experience:

• 62% won’t use apps or websites that are hard to navigate
• 60% won’t use apps or websites that are slow to load

62 percent will not use apps or websites that are difficult to navigate and 60 percent will not use apps or websites that are slow to load.

The study also found that Generation Z consumers like to engage with brands online, particularly when it’s in an interactive environment. Gen Zers like to shape their own experience – smart marketers will find new ways to offer products and services that do just that.