The harder that marketers look at Generation Z, the more apparent it is that this group of young people in their teens and twenties is staring right back. As DMN reported, Gen Z immerses themselves in video, engages heavily with specific social media channels (not Facebook), and expects more from brand messaging in the way of purpose-driven, cause-oriented propositions. Many from this generation are born marketers. As was pointed out to us by Marie Adolphe of Marketing EDGE, “for the first time in history, business tools are consumer tools.” For convenience and effectiveness, brands take their message to these informal, social outlets to speak with digital natives in their homegrown dialects.
As Gen Z comes of age, the stakes get higher for brands trying to reach this demo. Not only do they have their own unique characteristics, but they influence the other generations – this according to a new study released by Epsilon, “Age matters: a guide to cross-generational marketing.” Looking across the U.S. population, Boomers command the purchasing power. Meanwhile, Gen X and Millennials continue to increase their income, which is also a natural development as they transition into a later life stage. So too with Gen Z members who move out of the house and become responsible for more and more purchases. Epsilon used transactional data to analyze the 12-month spend of 85 million consumers, as well as surveying over 3,000 individuals through their “Shopper’s Voice” proprietary consumer panel, which measured attitudes on shopping methods, privacy, media usage, technology and other attitudes.
“The more we know about consumers, the more we can help brands we work with deliver personalized messages,” said Stacey Hawes, President, Data for Epsilon. “This year, we asked how important it is to fully understand consumers’ habits based on how old they are and what channels they prefer. We set out to do a study looking at generations and differences to help the brands we work with to improve their messaging. We think it’s important not just to find the right audience, but for the messaging, imagery and positioning of brands as well – how they are talking to consumers.”
In past studies, Epsilon zeroed in on a specific generation like Millennials, according to Gillian MacPherson, Vice President, Data Products. But no age segment is “all one group.”
“Everyone within a generation isn’t exactly alike,” MacPherson said, adding that the study looked at household spending around some homes that included Gen Z minors, although they don’t recommend or support the targeting of minors. They asked, does this generation affect the spending and other behaviors of parents and grandparents in the household, which is precisely what the study uncovered. “If you look at the household findings of Gen X or other generations, their behaviors are different with Gen Z in the household,” MacPherson added. “They are earlier adopters of the Internet of Things, and voice assistants like Alexa. If you are looking at the data of a Millennial with a Gen Z in the home, chances are they are more actively using [this technology].”
The study found that Gen Z, by the numbers, had fewer active buyers overall than other generations in the population. But for those who were active buyers, they spent more annually, with more transactions. (The study considered Gen Z as anyone born in 1994 or later, with Gen Z minors born in, or after, 2000.) Since many live with their parents, Gen Z spends what they have and are frequent shoppers. They purchase items online, but also go to the mall for the social experience, like young people in previous generations once did at a similar age. Gen Z also spends more of their money through digital disruptors like Uber, Netflix, Spotify and Airbnb, according to the study.
“Generation Z shows they are more in control, with usage of Uber and other disruptors,” MacPherson said. “What they like about going into retail locations is the social experience and the immediately gratifying, holistic experience. Where they showed their difference [at the mall] was in their use of their mobile devices – taking an on-the-spot price check or taking a picture of their parking space. Screen time comes into play, while they are still enjoying the in-store experience as well.”
Households with Gen Z members are more likely to make online purchases, while Boomers with kids are more likely to use a tablet. Gen Xers without kids stay away from the malls. Millennials are the biggest users of Amazon. The Epsilon study found that Gen Z minors consider themselves more loyal to shoe brands than older generations, while Gen Xers and Millennials with kids are more loyal to restaurants, clothing brands and other categories, than those without kids. This is why a crucial recommendation by the study encourages brands to adopt a tech-forward approach, even with older generations. A younger Gen Z could be living in the house and influencing their family.
“I think the message is that regardless of the channels the marketers utilize, brands need to be smart about the data behind who they’re trying to reach,” Stacey Hawes said. “Leveraging data gives brands a better picture of who the consumer is and how to tailor the strategy, determine which markets to target, know who consumers are and how they behave differently by generation. Around branding and message, using data can inform the creative as well.”
Just remember when communicating with Gen Z not to forget, also, the older generations who are paying the bills – Gen X and Boomers. This complicated relationship and transfer of influence makes any current study cross-generational.