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Gen Z is coming of age — happy 24th to the oldest among them. At 48 percent non-white, they are racially and ethnically more diverse than the exceptionally diverse Millennials at 44 percent. While Millennials are the first generation of digital natives, we challenge you to find a Gen Zer who remembers life before smartphones.
Gen Z represents an estimated $143 billion in annual spending power. This doesn’t even include the $127 billion spent on their behalf each year. Although it’s difficult to predict the effect of the pandemic on future earnings, a study by Oxford Economics and reported by Bloomberg projects that Gen Z’s future earnings will reach $2 trillion by 2030. So you’ll definitely want to include them as part of your marketing strategy.
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If you’re not targeting Gen Z this holiday season, or worse, hoping your Millennial strategy will do, we’ve got tips for you to reach this group successfully. But before we get to that, who are Gen Z, and what do they want?
Gen Z: The CliffsNotes
As the eldest Gen Zers accepted their first professional job offers, along came Covid-19. As the virus lingers, it’s still hard to see the long-term implications. Gen Zers’ lives will be shaped by the social and economic impacts of a virus and disease like no other generation before them.
On the positive side, Gen Z seems poised to be a more financially-literate generation than the Millennials. For one thing, they’re investing at an earlier age. Also, having watched their parents struggle with burdensome debt, they are careful with money. They’re a pretty frugal lot, but that doesn’t mean they don’t spend. You just need to know how to reach them.
Gen Z are more likely to be on TikTok than Instagram, but in addition to these places, they hang out on YouTube as well. The numbers vary widely, but one credible study by Joy Ventures and getWizer says 20 percent of Gen Zers spend five hours a day on TikTok alone. Gen Z swapped older generations’ television viewing habits for mobile devices, and they tend to be always connected. Most got their first smartphone at age 12.
Capture Gen Z Loyalty Early
Gen Z is expected to have huge spending power by 2026. Just as with Millennials before them, brands must cultivate brand loyalty and start building those relationships early. As already mentioned, Gen Zers are mindful of how they spend money, so brands must be value-driven. Although not persuaded by a logo, data indicates Gen Z will invest in a wide variety of products and services when you build trust with them.
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How To Build Trust Among Gen Z
Roughly half of Gen Z adults get their news from social media, including YouTube and TikTok. They care about the news and what’s happening in the world, but they have more faith in social media sources than they do in traditional media. Plus, social media is where they hang out.
Gen Z is a skeptical group and they want to trust the brands they buy from. They expect their favorite brands to stand for the values they believe in. They don’t expect your brand to champion every cause. But what’s “good” about your company?
• Are your manufacturing practices ethical?
• Do you use images of real customers in your ads?
• Are you stewards of the environment?
• Do you give back to the community?
• Do you respect your employees?
• Do you stand up to social injustice?
Leading companies use social media to build online communities and demonstrate what their brands stand for. Gen Z seeks authenticity. But because they are young, they are in no rush to build brand loyalties. If they find what they value in your brand, you can capture their hearts and a share of their business. If you’re not giving Gen Z what they want, your competitors will.
How To Reach Gen Z This Holiday Season
Here are some tactics you can use right away to reach Gen Z during this upcoming holiday shopping season.
• Personalize Your Messages: Adjust to Gen Z wants and buying habits to meet them where they are. We can generalize about a demographic, but Gen Z is a collection of highly diverse individuals. If you understand and target Gen Z in a personalized manner based on culture, values, attitudes and lifestyle, you’ll likely outperform your competition.
• Use Influencers: Gen Z buys from people they trust and many of them follow influencers on social media. You don’t have to use expensive, big names. We’re witnessing the rise of micro-influencers — those who have less than 50,000 followers — who can be as or more effective than big names. When they authentically represent your brand, influencers allow you to leverage your marketing spend in a significant way.
• Shut up and Let Gen Z Talk: Create ways to connect with Gen Z customers and gather feedback and comments from them. Gen Z wants to be heard. Be agile and incorporate their insightful suggestions. Gen Z will appreciate and give their business to brands that hear them and continually provide value.
• Stand for Something: Be bold about your company values. You don’t have to be a superbrand to fight for something just. Neither do you need to have all the answers or be absolutely perfect in your response to, say, supply chain issues. Transparency is best. Share with Gen Z your triumphs and your challenges. They appreciate knowing you are trying while so many other companies do nothing.
Gen Z is poised to be the next influential generation of shoppers. Speak authentically to this generation and they will reward you with their business. Connect with them in a genuine way and hire Gen Z creatives. Brands that are able to do this successfully will foster connections with loyal Gen Z customers this holiday season and beyond.
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