What you’ll read:
- Gen Z will soon have more purchasing power than ever–here’s what to know about this generation that’s about to come of age.
In 2022, the average age of Generation Z will be 18 years old, finally entering the age of majority. That means we’re rapidly entering the era where Gen Z will influence everything from mainstream pop culture to election polls. As marketers, many of us are scrambling to find out how this will affect advertising, shopping, and more. Here are some facts about Gen Z that will be important to keep in mind.
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Gen Z has immense purchasing power
There are many differences between boomers and Generation Z, but one of the most significant applies to their wallets — where boomers like to save money, the youth are happy to spend. According to one comprehensive study, Gen Z’s direct and indirect spending power reached a staggering $148 billion in 2018, where it was projected to rise even further. But, of course, this was before COVID-19 and the Great Resignation, which experts feared would curtail the purchasing trend.
In reality, the opposite happened — Gen Z spending accelerated. One 2021 review of millennial and Gen Z buying habits revealed that spending was 125% higher than 2019 figures. As most of the population remains hesitant to go shopping again, these demographics might be the most important for brands to pursue.
Gen Z is always online
Gen Z is highly educated, technologically savvy, and well-versed in navigating online spaces. On average, they spend at least three hours on social media every day — more than boomers, Gen X, or even Millennials — and that number likely increased in the wake of the COVID-19 pandemic. In short, the internet is a normal part of life, and a de facto source of information, entertainment, and social interaction. So, if you want to meet Gen Z “where they are,” you’ll need to visit these online communities.
The implications of Gen Z’s connectivity have an enormous impact on brand strategies. For example, if you don’t have a social media presence, you might as well be invisible to the demographic. A less obvious consideration is that Gen Z favors a diverse range of online payment options — including services like Venmo and Cash App — as they turn away from cash and physical credit cards. If these considerations don’t inform your brand marketing strategies, you’re almost certainly going to miss out on large swathes of the Gen Z market.
To Gen Z, diverse marketing matters
Gen Z is, without question, the most diverse generation in the United States. Over half of all Gen Z children belong to minority groups. In terms of total population, only 50.9% of the generation is white. In addition, approximately 29% of the market are either immigrants or the children of immigrants. So when it comes to marketing strategy, Gen Z absolutely expects brands to account for that diversity in their campaigns.
So what does that look like? According to recent studies, 76% of Gen Z believes diversity and inclusion are important to marketing, while 51% want more diverse casting. On a deeper level, the brands that resonate with Gen Z tend to advocate for social justice issues such as LGBTQ rights. If marketers can authentically represent this diversity, they can gain a far larger audience than offering a “neutral” product.
Every generation represents a significant shift in how marketers target audiences, and Generation Z is no exception. By accounting for their online connectivity, high purchasing power, and diversity expectations, brands will be well-equipped to reach these young adults in the years ahead.