Gen Z is ready to buy from brands that align with their needs and values. Of course, that means market researchers need to understand this generation and what their needs and values are. Even when Millennials still sometimes hog the headlines. Understanding different generations at the right time for a business can be a challenge. But certainly it’s a challenge that can be overcome. When done well, it can be a dealmaker.
Hana Ben-Shabat, author of “Gen Z 360: Preparing for the Inevitable Change in Culture, Work, and Commerce” told us she saw many clients over the years struggle with understanding Millennials and wanted to help them get ahead of understanding this new generation. Gen Z are people born between 1998 and 2016
“In 2018, when Millennials were 38 years old I still encountered clients who were telling me they needed to understand Millennials better,” she said, sharing why she is focusing on explaining Gen Z to businesses now. “I realized this has been going on for 20 years and we are still struggling. There must be an opportunity to do something very differently with Gen Z and not make all the mistakes that were made with Millennials. Mistakes that were pretty costly.”
Brands that understand consumers – of any generation – can build stronger products, services and relationships with those consumers.
With that in mind, this article covers:
- What’s the definition of a generation anyways?
- Who is Gen Z?
- What can we learn from mistakes made understanding Millennials?
- The Gen Z consumer
- Why are brands struggling to understand Gen Z?
- The four characteristics of Gen Z
What is a generation and why this is important to understand for researchers?
In broad terms, a generation is a group of people, born in specific years. For example, Gen Z was born between 1998 and 2016. Millennials were born between 1981 and 1996. The next generation up – after Gen Z – is called Gen Alpha.
But generations are defined by much more than that, Hana explained. That includes:
- cultural events
- the political landscape
- social influences
- and more that happens during their formative years – the first few years of their lives.
“That context has significant influence on the beliefs and then behaviors of a generation,” Hana explained. “What happens during your formative years that shapes your view of the world. In the past it was very easy to define a generation by a few landmark events.”
For example, the Baby Boomers were defined by the Vietnam War and the Civil Rights Movement. Gen Xers were influenced by the fall of the Berlin Wall, the Stock Market crash of 1987 and the AIDS epidemic. Millennials grew up in the shadows of the Sept. 11, attacks and everything that came after.
The life experiences of a generation also influence their buying decisions.
“It has to do with brand loyalty,” said Jamin Brazil, host of the “Happy Market Research Podcast” and co-founder and chairman of HubUX, on an episode of “Reel Talk.” “There are major milestones that happen in a person’s life at which time your brand loyalty can be disrupted.”
How is Gen Z different from previous generations?
“Gen Z is a very different story,” Hana said. “Think about all that has happened since 1996. They have witnessed so many events that you would consider landmark events.”
- The 2008 recession
- Barack Obama becoming the first Black president of the United States.
- Gun violence and school shootings in the United States
- The election of Donald Trump as president
- Black Lives Matter movement
- The COVID-19 pandemic
“This is the thing that makes this generation different,” she said. “They grew up in a period of constant change. And that has a huge effect on their psyche, their values and their behaviors.”
Millennials in general are risk-averse. They save more in cash. They delayed home ownership, children and other such life experiences that other generations dealt differently with.
Gen Z on the other hand is active in investing, buying homes and some are already saving for retirement, Hana said.
“That’s astonishing if you think how young they are,” Hana said. They save and put their money into things that can secure their future.
Their spending is often very pragmatic.
“It’s not about not spending money,” added Jenn Vogel, vice president of marketing at Voxpopme and host of “Reel Talk.” It’s about being smart.”
Gen Z also has more access to activities to monetize their time – especially through side hustles that can be done on their time, Jamin said.
“That is completely different from how previous generations have thought about things,” he said.
Surrounded by brands
Access to brands has been very different for Gen Z as well when compared to previous generations.
Previous generations didn’t have that. They were exposed to brands when they watched TV, read the newspaper or flipped through a magazine.
“It’s imperative that brands have that conversation with Gen Z right now,” Jamin said. “And that connection needs to happen on the platforms where they are and in the context of that platform.”
What can we learn from mistakes made understanding Millennials?
“When Millennials arrived they presented a shift in thinking and aspirations to the previous generation,” said Hana on an episode of “Reel Talk: The Customer Insights Show.”
Millennials started talking about work-life balance, for example, something the Baby Boomers didn’t talk about at all.
“There was just that misunderstanding of who they are and what they really want,” Hana said. “That kind of shift created a lot of confusion. They simply did not fit what the previous generation expected from them.”
Who is the Gen Z consumer?
They started early, Hana said. They didn’t wait until age 18 or 20 to start consuming.
“This is a generation that grew up with technology,” Hana said. “And they started making purchasing decisions at a very young age. Downloading apps. Downloading games. Paying for small purchases on the internet. They are already from a very young age making purchasing decisions.”
Gen Zers don’t know a world without mobile phones, search engines or social media. They can access information at their finger tips and do.
“Eighty-seven percent of Gen Z had access to a cell phone by the time they were 18,” Hana said. “As a result, Gen Z – at a very early age, started to question things. They want to take action, which makes them more activist than generations before.”
With their knowledge to find information, products and even organize online, Gen Z could become one of the most disruptive generations, Hana said.
That access to information is very different from how their Gen X parents grew up.
“My knowledge was limited to the public library and think about the access in a public library in a smaller municipality – it’s very isolated from larger cities,” said Jamin. “I was probably dealing with content that was years – if not decades – old. And then I would only get a chance to access that content when I would go to the library – which was maybe once a month.”
Diversity and struggles
Hana explained the way Gen Z consumes is a direct result of their upbringing and the context of their childhood.
“First and foremost, this is the most diverse generation to live in this country,” she said. “Forty-eight percent are minorities. And this is something that has had a huge influence on how they view the world and also what they expect from companies and brands.”
Many Gen Zers saw their parents struggle during the 2008 recession and that affected them.
“How do I secure my financial future and how am I making sure not to end up in that scary place?” Hana said.
Why brands struggle understanding Gen Z
“To many marketers, what Gen Z wants seems contradicting, which is not always the case,” Hana said. “It’s really important to understand the main characteristics. The attributes sometimes require drastic changes from how business was done traditionally.”
The four characteristics to understand include:
- Value and values
- Navigating seamlessly the online and offline experience
“This gets thrown around so often that it has become kind of meaningless,” Hana said. “But it’s important to remember that this is an important concept for Gen Z.”
Gen Z believes that you have to be true to yourself and this is a reaction to the world around them, which includes social media influencers and connections.
“They basically reject the overly polished and overly idolized images,” Hana said.
Gen Zers question the portrayed success and realness of how people portray themselves on social media.
“The Gen Z mantra is ‘be yourself,'” said Hana. “If you are true to yourself and trustworthy it means that I can trust you. And I think they bring the same expectations for brands.”
Members of the generation want to stand out rather than fit in.
“That’s also a reaction,” Hana said.
Life is competitive and there’s so much going on. Standing out can be a competitive advantage in being successful.
“To some extent they see themselves as brands,” Hana said. “Which now brings another question: Are brands marketing to people or to mini-brands? That requires completely different thinking on how we actually do marketing.”
But it’s not just about themselves either, Hana quickly added.
“The ‘we’ is just as important as the ‘me,'” she said. “They believe that everyone should be individualistic and everyone should be celebrated. And then we recognize the ‘we.'”
Value and values
Gen Z is cost-conscious and is looking for affordable products, Hana said.
“To provide good value for money is key to attract these consumers,” Hana said. “But I also think Gen Z will pay and support brands that align with their values. Brands that are doing good in the world. And take a stand on issues that matter.”
Read next: Is brand activism right for your brand?
Gen Z might even ask brands what their stand is and expect an answer. For some brands, that can be a difficult conversation as they traditionally didn’t take stands on certain happenings in the world.
“I think that’s going to be challenging for marketers who want to stay away from that sphere,” Hana said. “But I think this is something that Gen Z will continue to demand.”
Also keep in mind to not just take a stand on anything and especially if you don’t believe in that stand. You have to believe in the publicly stated opinion.
“Unless it’s aligned with your brand values it’s better not to do it,” Hana said.
That includes offline and online. Previous generations lived without the internet and then the internet came around. Hana explained that for Gen Z it’s much more seamless. Online and offline all go together.
“That separation just does not exist for them,” she said. “There is one brand and they access that brand through all these different touchpoints.”
“If it’s more fun to scroll and shop in an Instagram feed why would anyone go to a store?” Hana said. “You have to make sure your store can deliver that kind of discoverability and excitement that you get when you are on social media. That also includes personalization. And that’s easier said than done.”
How can researchers understand Gen Z better?
Hana said that one of the biggest things might be to mirror how they currently engage in their daily lives. That includes reaching them on their cell phones. That includes making it easy.
“You’ll get their responses and a good level of engagement,” she said. “Surveys that are designed in short bursts work.”
Keep in mind that Generation Z likes to share. They are after all a generation of creators. But you do have to dip into that in a way that they want to participate.
Jamin said it’s also about understanding their disrupt-able moments. When do they make decisions and how can brands influence those decision points before they get there?
Communication styles and preferences
Ultimately, to understand Gen Z we have to reach them in their preferred way. And the way people want to communicate with brands changes.
Back in the day, researchers used random digital dialing strategies: Get out the phonebook and start calling numbers. Many people today aren’t even listed in the phonebook. Or even if we have their numbers and call, they won’t answer.
I, for one as a Gen Xer, have silenced all unknown numbers that ring to my cell.
“Researchers hate when I say this but you just can’t expect a Gen Zer to participate in a standard brand tracker,” Jamin added. “You are not going to get them to sit down and give you thoughtful answers over a 20-minute period of time.”
Previous generations grew up typing things on a keyboard. Today, we have selfie-videos and even voice-dictated responses. Keep preferences in mind of the people we are trying to reach. How do they want to communicate with you?
At the end of the day if your brand is trying to reach this generation they have to understand them. Hopefully this article shines the light on some of the issues affecting Gen Z and how market researchers can reach them in a better way. One final thing to remember is that Gen Z might also influence other generations. Understanding them helps us understand the context of the entire consumer base.