Businesses are constantly wanting to know what’s the best way to market to the largest audiences. While the Millennials represent the largest group of consumers and the Baby Boomers have the largest buying power, Gen Z's spending power is on the rise.
According to a Bloomberg report from last year, the young students and professionals command $360 billion in disposable income. As that figure increases, businesses are striving to figure out how to market to this generation and many struggle to discover how to get them to buy, especially as their spending habits differ drastically from the previous generations.
Finding out how to appeal to Gen Z will take new perspectives.
If a member of Gen Z doesn't agree with the morals of a company, many of them will boycott the products completely and get their friends to do so as well. What advertisers and brand managers learned in their marketing classes years ago is outdated. The best way to learn what Gen Z is looking for from businesses is to ask them.
I asked Arizona State University marketing student, Madeline Skrovan what her take is on advertising to Gen Z consumers and what brands need to be doing differently.
Jeff Fromm: How can brands best reach Gen Z?
Madeline Skrovan: Not only is there concrete data, but I can personally attest that social media is the best way to reach my generation at this time. Thanks to the simplicity of ordering products online and the fact that most of us Gen Zers have our mobile devices attached to our hands at all times, reaching this generation online is the best thing a brand could do.
I am served ads on my Instagram feed every time I go on the app, and I am guilty of clicking on them even though I know it will have at least two consequences: I will be spending money on something I don’t need and since I engaged, I will be served more ads. If brands could capitalize on advertising to Gen Z through social media, they would be very successful.
There are also many ways to do this. There are actual paid ads embedded into user’s Instagram feeds, but there is also the use of influencers or brand ambassadors. Members of Gen Z like to stick together and are strongly influenced by people they look up to. They like to keep up with trends. Having people they look up to showcasing their favorite products, causes Gen Z consumers to also want those items.
It is also important to look at what Gen Z is passionate about. It’s been found that my generation strives to be socially and environmentally responsible and are self-aware, mental health enthusiasts. We are more demanding, driven to succeed, and ambitious. We value diversity and equality, family and success, and we worry about terrorism, gun violence and the economy. We are a generation for the people, and we tend to gravitate toward brands that align with beliefs similar to our own. If a brand can showcase that they stand with similar things we do, then they’re in a really great spot to reach members of Generation Z and earn our loyalty as consumers.
Fromm: What brands best engage Gen Z?
Skrovan: Brands can do at least two things to best engage Gen Z: reach them through social media and align with their progressive way of thinking. Brands that do a great job of engaging Gen Z online are Nike and Duolingo. Nike is arguably one of the most popular brands in the world. They obviously don’t struggle with reaching consumers, but they continue to engage with my generation online.
I am served a Nike ad on Instagram every single day, like clockwork. As a young person pursuing a career in Marketing, I should know better than to fall into the traps of click-bait and online ads. I’ve studied Cost Per Click, reach and frequency, and I know that I am about to make a decision that will result in more advertisements flooding my page. Yet, I do it anyway because brands like Nike make it hard for us not to engage. They have mastered catering to their audience and strategically push several ads across various platforms consistently.
Nike also engages with Gen Z from a moral standpoint. On their social media platforms they feature top athletes and even “normal people” wearing their products. They showcase that Nike is for everyone, while simultaneously making us “normal people” want to wear the same thing that world class athletes like Lebron James and Alex Morgan are wearing. This is why Nike is genius with their advertising. They push out engaging and motivational commercials that cater to the ambitious and motivated side of Gen Z. They also highlight that anyone can sport Nike, people of all demographics, sexualities and ages.
Another brand doing a uniquely genius job of reaching Gen Z is Duolingo, an easy-to-use language learning application. Duolingo is leading the charge for TikTok advertising. They aren’t even necessarily promoting their brand in these videos. Instead, their giant, green Duolingo bird mascot is participating in TikTok trends that Gen Z can relate to. They now have a huge following of 4.4 million because they are engaging with Gen Z through humorous 15 second videos, causing us to connect with their content and remember their name.
Gen Zers are more aware of their buying habits than preceding generations. We tend to be more careful of what we buy and the effect our actions have on the environment. So, members of Gen Z like to offer their support to brands who are also thinking sustainably. Brands to highlight are Starbucks, Patagonia and Hydro Flask. Many Gen Zers have a reusable water bottle, carry tote bags, and appreciate companies who are vocal about their efforts to go plastic free. Tote bags and reusable water bottles are actual trends that many Gen Zers want to participate in, whether they are doing it for sustainable reasons or simply to fit in with the rest of their generation.
Fromm: How do Gen Zers spend their time?
Skrovan: Gen Z is very social. It might be because a majority of the generation is in a very social time of our lives, specifically the high school to college age range. Young adults depend on human connection at this point in their lives. Gen Z also grew up in a digital world and has a unique opportunity to connect with their peers both digitally and in-person. Previous generations did not have this same luxury.
A huge part of a Gen Zer’s life is social media, specifically with the rise of TikTok in the last three years. Over 60% of TikTok users are in Gen Z. This generation also makes up about 40% of the current global population. Actually, next year 74 million people in the U.S. will be in Gen Z, which will make it the largest generation of all, so reaching them would be extremely beneficial to companies.
It is safe to say that members of Gen Z also spend much of their time educating themselves. These young people are ambitious and eager to learn new ways to better the world around them. They are educating themselves on social issues and taking stances in political conversations, social justice movements, and even organizing rallies for various movements they believe in.
Partially for social responsibility, thrifting has also become popular amongst Gen Z because they can fight against fast fashion while also finding trendy pieces. Gen Z is nostalgic about clothing trends of past generations and frequently are incorporating past trends into their own modern styles.
For example, fashion trends from the ‘70s through the early 2000s seem to have made their way back into the wardrobes of Gen Zers. Showcasing unique and thrifted clothes has become popular with Gen Z because it connects with their values and showcases their personalities.
Fromm: What are some COVID effects on Gen Z behavior and spending?
Skrovan: Living in a pandemic forced us to do everything differently. We behave, think, and consume differently. As a member of Gen Z, speaking on behalf of my generation, I feel like we have lost human connection. I have now spent several of my young adult years living in a pandemic. I was graduating high school when COVID hit, and I lost all my ‘last moments’ of high school like my senior prom and proper graduation ceremony.
My college years were also affected by COVID. I hadn’t stepped into a real college lecture hall until my sophomore year. Right when I was getting a sense of freedom in young adulthood, it was taken away by a pandemic. Gen Z specifically was forced to adjust to a socially distancing lifestyle when we were supposed to be experiencing the vital years of transitioning from teenager to adulthood.
After conducting a small survey of students at Arizona State University, I found that more than half of my peers agreed that COVID had a significant influence on the way they spend money. It is no secret that pandemic life hurt the economy. Many members of my generation lost their jobs, so they had less or no income and therefore spent less. We spent most days at home, spending less money. Living a socially-distanced lifestyle for over a year led to more purchases being made online. Through the same small survey of Gen Zers at my university, 78% say that they buy most of their products online.
Contactless payment has also risen in popularity as a result of COVID. Online banking and paying services like Venmo, Paypal, and Apple Pay are super prominent especially in the hands of young adults. Payments like these make it way too easy to spend money.
Finding out how to appeal to Gen Z will take new perspectives. The way the marketing world has been targeting consumers for the last two generations will not work with this one. Their beliefs and values differ greatly, and they’re willing to stop buying to force change. If businesses want to sell to Gen Z, they have to change first. This includes meeting them where they are — online — and being authentic and socially responsible.