Projected Shopping Habits: Millennials vs. Generation Z
As a familiar sight on the marketing landscape, millennials hold a lot of buying power. Loosely defined as being between 21 and 34 years of age in 2016, millennials are coming into their own in the workplace, creating families, and becoming entrepreneurs. They’re also one of the biggest demographics for target marketing, given the fact that their buying habits are currently outspending baby boomers, and their influence is much larger.
Yet, there’s an even bigger demographic on the horizon: Generation Z. Defined as being born anytime from the mid-1990s to 2015 (which makes them around 21 years old and under), this group of young people have truly grown up in a digital era, and they’re just reaching the point where their dollars and influence matter. In fact, according to the International Business Times, Generation Z is worth an estimated $44 billion a year. It’s no wonder marketing companies and ad agencies are gearing up to shift — or at least equal — their focus from millennials to Generation Z.
Here are a few differences in the shopping habits between millennials and their counterparts in Generation Z:
According to a piece at Business Insider, both millennials and Generation Z are frugal in their spending, looking to find the best deals and the most value for their money. There’s even a shared love for do-it-yourself crafts and creations, supported by numerous online marketplaces where individuals can sell their wares — making money and saving it at the same time. (This might end up being even more powerful for Generation Z, whose worldview can be shaded by the recession and so they feel the need to save as much money as they can.)
Another similarity is the love of storytelling. You only have to look at the success of different viral ads to know that young people enjoy a good story, especially if it’s convincing and authentic. Given that they prize transparency in the brands they choose, they’re going to shop with a company that they feel they can interact with. Both millennials and Generation Z want to connect to brands and companies they can believe in, and brand stories that they can contribute to. Their buying habits are not so much about the product, but also about the participation.
Also, both generations place a lot of value on the opinions of their peers. They’re more likely to look at online reviews or websites such as Yelp before making a purchase — which means more investment in social media for companies, says an article at Knowledge@Wharton, adding that “[companies] will have to put more resources toward managing and influencing opinions online to build exposure, brand awareness and loyalty.”
The thread that connects both generations is, unsurprisingly, digital access. But while millennials still do some of their shopping in physical locations as well as buying online, Generation Z is far more comfortable doing the majority of their shopping on their smartphones. Another Business Insider piece adds “this generation likes to interact with the brands on their social-media channels for research before purchasing items in physical stores,” which means you can’t rely strictly on e-commerce for Generation Z dollars.
Millennials can remember a time before the internet connected everything and everyone; they might remember dial-up modems and an era without smartphones. Because of this, they’re less likely to stay connected constantly, making marketing sales and deals more valuable to Generation Z; they’ll spot it right away, while millennials may miss a chance to save (and spend). Also, according to Digiday, it’s important to consider app purchases and in-app sales — given that Generation Z spends more time online, it’s smarter to market app sales to them.
Lastly, there’s a huge disconnect in the types of social media they use — for millennials, it’s the old standbys of Facebook, Twitter, and even LinkedIn; Gen Z is using Snapchat and Instagram. Knowing which platforms to target for specific audiences should be of utmost importance to advertisers and marketers.
Same Yet Separate
Although millennials and Generation Z have similarities in some of their shopping habits (such as reliance on peer reviews and a desire for frugality), the split really appears when you start to look at online connectivity, where they see the majority of advertisements, and shopping from a smartphone. Some marketing and advertising can maintain a crossover between both generations, but it’d be wise for agencies to begin targeting millennials and Gen Z as separate entities for the sake of successful marketing campaigns.