Remember the hype years ago when the Millennial generation consumed every ounce of a brand’s marketing and research budget? Well get ready because it’s happening again— this time with Generation Z. Marketers are estimating Generation Z will have approximately $44 billion in spending power as they reach adulthood. With such a large impact on the marketplace, it’s no surprise that the rush towards understanding these up and coming consumers is taking hold on the industry.
To understand the potential impact on brands that Gen Z may have, we first need to understand the differences between Millennials and their younger counterparts. Only then can brands slowly shift market research activities to prepare for the inevitable rise of Generation Z.
Differences Between Millennials and Generation Z
The obvious difference between Millennials and Generation Z is the distinction in age. Millennials are characterized as being born between 1978 to 1998 give or take a few years, while Gen Z are those born between the late 90’s to 2010. While there is some overlap in the characteristics and behaviors between Millennials and Gen Z, as the younger group ages, they’re beginning to develop their own unique generational markers.
One of the first areas of distinction has to do with social and cultural attitudes. While each generation through history has seemingly become more culturally diverse, Gen Z will be the most racially diverse in history. In addition to diversity, Gen Z is less inclined to be defined by their differences. Taking down gender stereotypes and becoming blind to differences in race and sexual orientation, this generation may be our hope for peace in a socially tumultuous time.
Another difference that is significantly becoming clear is the impact of technology on the next generation. Millennials show great aptitude for the development and adoption of technology but many are categorizing Generation Z as the true “digital natives.” Generation Z, while similar, are anything but adopters, not even knowing a world without such technology. In fact, many likely can’t remember a time before smartphones or social media. Even more, they’re far more adept at analyzing information online. As a result, marketers will only have 8 seconds to capture attention and deliver their message before this generation moves on.
The most interesting, and possible influential marker of Generation Z is still making itself known. Psychology and generational experts are beginning to understand the general approach to the world of Gen Z as being quite polarizing to that of the Millennial generation. While Millennials are categorized as coddled, adventurous group thinkers, Gen Z appear to be non risk-taking pragmatic individuals. What might be causing such a vast difference in generations? Well, just look to the fact that Millennials entered a world in a time of peace and economic stability, where Gen Z immediately entered into a world of war on terror and the Great Recession, and it’s not hard to guess why.
So what impact on market research do all these dissimilarities between Millennials and Gen Z have? While we won’t know the full scope until more of Gen Z become consumers, we can start to understand how to position market research efforts to prepare for the next generation.
How the Differences Will Impact Market Research
Generation always has an impact on attitudes, behaviors, usage, and buying behavior. When it comes to Generation Z’s impact on market research though, we’ll see three major areas of impact emerge on
- Data collection
- Purchase behavior
Targeting a diverse group of people in any market research is important, but in the future, gaining an accurate representation of Gen Z will prove increasingly pivotal to understanding them as consumers. A brand that is able to accurately reflect the level of diversity among Gen Z in their market research will gain the insights to appeal to a larger set of them early on. National representations will change and having the right research partners with the most up to date sample will be critical for understanding Gen Z.
Let’s not forget that it only takes 8 seconds for Generation Z to lose focus, particularly on social media; however they are engaging far more with brands online— particularly those they recognize as “real.” In order to successfully support marketing in gaining awareness and engagement among Gen Z, market research teams will need to learn more effective ways of analyzing behaviors and brand interactions on social media. Utilizing market research tools that either allow for integration of social media data or testing among particular social channels will increase the success of social advertising.
The impact of Gen Z’s values will lie mostly on their financial or purchasing behavior. Since Gen Z is far more pragmatic, it’s likely they’ll have a different approach towards their finances. Generation Z values work ethic, success, and a realistic approach to life. As a result, market researchers can assume their buying behavior will be similarly affected. While they still shop in store, brands will have to appeal more to Gen Z through intrinsic values or functional needs rather than aspirational needs—as is the case with Millennials.
It may be awhile before Gen Z shifts control of the marketplace; but those brands that begin their research into these up and coming consumers now will surely have an advantage into taking a piece of that $44 billion in spending later. To learn more about what attracts Millennials and Generation Z to mobile apps, check out the executive summary below.