Have you met the Z Generation yet?
It is the largest ever teen population and they will eclipse the Millennials with new trends.
Each new generation to the market brings its own set of attitudes, beliefs and behaviors, which can sometimes make them feel mysterious or elusive to marketers. While new to the scene, Gen Z does not need to fit this bill. Rather, they are resolute, smart, pragmatic and hard-working, among other characteristics. It’s a result of growing up in an environment shaped by economic instability and social change, not to mention rapid digital innovation.
This is not to say that reaching Gen Z won’t be as demanding, if not more so, than reaching Millennials, but it does point to an enlightening and rewarding time in the market as they venture onward to change the world. And change the world they will. Gen Z is already on track to become the largest generation of consumers by the year 2020, and they account for $29 to $143 billion in direct spending. But their impact on the market doesn’t stop there. Ninety-three percent of parents today say their children influence family and household purchases, according to a report by CASSANDRA, meaning a significant portion of overall market spend is because of these youths.
I spoke with Steph Wissink, managing director and consumer research analyst at Jefferies, and Joe Cardador, PhD, VP of consumer intelligence at Barkley, to learn more about Gen Z’s influence on spending in today’s modern household and what it means for brands.
Jeff Fromm: Why do marketers need to understand the accurate financial impact of Gen Z?
Joe Cardador: Based on our research, Gen Z is on track to become the largest generation of consumers in just a few short years. They already represent up to $143 billion in buying power – and that’s without accounting for the influence they have on household spending. Marketers should focus on understanding Gen Z and the power they have in the market today to build loyalty for tomorrow.
Fromm: When it comes to direct spending, where are Gen Zers dedicating most of their earned funds? What inspires their purchases?
Cardador: According to Mintel, for Gen Zers age 16 to 21, spending most frequently falls into the following categories: Car (including gas, insurance and taxes), Groceries, Entertainment and Hobbies, Studies (including textbooks, tuition and school fees), Mobile Phone, Bills, Appearance (hair appointments, clothes, cosmetics, etc.), Savings, Restaurants, Fast-Food, Debt Payments, and Public Transportation.