Gen-Z: What You Need to Know
December 10, 2015
Move over millennials, it's almost Gen-Z's time to shine. A new report by Goldman Sachs and Pew Research takes a look at why this young generation is set to upstage their millennial cohorts in size, economic impact, and influence.
Read more: Engaging With Key Consumer Groups
Gen-Z typically refers to the 69 million people in the U.S born after 1998. This demographic represents 22 percent of the total population, and with the older members of Gen-Z nearing adulthood, businesses are trying to understand what makes this group different than millennials and how they can tailor their marketing messages to reach them.
“To label’s today’s youth as merely ‘Young Millennials’ is not only clumsy but could also prove to be a source of misunderstanding,” says Christopher Wolf, an analyst at Goldman Sachs. “Raised by Gen-X parents during a time marred by economic stress, rising student-debt burdens, socioeconomic tensions and war overseas, these youths carry a less idealistic, more pragmatic perspective on the world."
Gen-Z represents a more diverse and tech savvy demographic than millennials, and they are seen by analysts as being careful and conservative with their finances, aware of the effects of financial decisions, and a group that ultimately will have a huge impact on the economy.
“On top of the [about] $44 billion of their own spending power they already wield, 93 percent of parents agree their Gen-Z children maintain at least some influence on household spending and purchases,” says Wolf.
Marketers are already trying to figure out how to appeal to Gen-Z. A recent blog post by Kevin Cundiff shares three truths when selling to this demographic.
- Leave the pushy sales pitch behind. This generation is used to being inundated with multiple messages at the same time, and they have no problem 'changing the channel' if they feel pressured by an inauthentic, over-the-top sales approach.
- Attract them with technology. These digital natives were raised by mobile technology, so it's necessary to find a way to reach them in this manner. Make sure your marketing includes an app, online resources, or a way to use tech in some phase of the purchase or they won't be interested.
- Highlight leadership and entrepreneurial benefits. Gen-Z has a strong desire to make an impact and change the world. A recent study showed that 61 percent of high school students would rather be entrepreneurs than employees, so make sure to relate what you're selling to their natural desire to make a difference.
Source: "Watch out millennials, Goldman says Gen-Z might eat your lunch," MarketWatch (Dec. 2, 2015) and "Introducing Your Newest Customer: Generation Z," Business 2 Community (Dec. 9, 2015)
Updated: July 14, 2020