Gen Z, the youngest generation—the oldest of whom are turning 25 this year—is finally taking the spotlight from Millennials. In fact, Gen Z is now exerting its burgeoning influence over lifestyle, work, technology, banking, consumer trends, and much more.
Recently, CGK President Jason Dorsey spoke with Business Insider to share The Center for Generational Kinetics’ research on the rapidly growing influence of Gen Z on consumer spending and consumer trends.
Gen Z is the first digitally native generation, meaning they don’t remember a time before smartphones, the Internet, and social media. This diverse, exciting, connected generation has proven much more difficult to reach and engage than other generations of today’s consumers. Why? Because they eschew traditional advertising, know how to use ad blockers, are benefiting from privacy changes affecting advertising, and expect brands to jump through all of those hoops and still serve up messaging that is personalized to them. No wonder CMOs, marketers, brands, and communication professionals are having to ditch their Millennial playbooks to reach and influence this new generation of consumers at a critical time in their emergence and brand loyalty development.
At the same time, the COVID-19 pandemic hit right in the middle of Gen Z’s most formative years. This generation-defining event will continue to shape how they look at the future, shop digitally versus in-store, pay via text, trust in cryptocurrency, and expect everything delivered to their doorstep on the same day.
Gen Z is already displaying significant signs of consumer behavioral change from trust to loyalty and embracing social causes that will define them for years to come. Our extensive, multi-year national research at The Center for Generational Kinetics has revealed that Gen Z is very interested in saving money. The majority of them have “emergency accounts,” want to know they are getting a good deal on products and services, and they have a very high desire for investing in their retirement and seeking employer benefits (from health insurance to pet health insurance!).
Combining Gen Z’s practicality towards money (which was only strengthened during the Great Recession), their dependence on digital, and the pandemic, it is easy to see why they are already showing their divergence from other generations as consumers and consumer trend drivers.
“They are a really distinctive generation with a different set of parents raised at a different time, that are coming into the world with some different views.” –Jason Dorsey
The oldest members of Gen Z are entering the life stage in which they are exerting enough consumer and trendsetting influence to finally take the mantle as the “it” generation. This is true both for emerging and key consumer trends and even for employment trends and technology adoption. All this is happening right when many leaders report feeling like they finally understand Millennials!
As a result, leaders are now having to switch their focus to this new generation, which is proving to be both very different and with many defining characteristics yet to be discovered. The emergence of Gen Z further into their 20’s has been particularly exciting for all of us researchers at The Center for Generational Kinetics because we have been researching this exciting generation for many years. Our State of Gen Z® study began in 2016, and the next ten years of our work studying Gen Z will reveal many new formative moments and breakthrough trends as the generation further emerges into adulthood!
As a generation born into a world marked by smartphones, the Internet, AI/ML, and ubiquitous social media, Gen Z spends as much more time on their smartphones than many older generations did watching television at the same age. The pandemic only heightened these digitally-dependent behaviors as many parents also gave new digital devices—from tablets to iPhones—to their kids to help them with school as well as entertain them through this socially distanced period.
“With ample time to scroll on their phones, they digitally bonded with one another as many moved back home during the pandemic at a similar life stage.” –Jason Dorsey
During this time of increased digital and social usage, Gen Z’s favored social media app, TikTok, showed extraordinary growth. As of September 2020, TikTok has grown by 75% and filtered into intergenerational use—signaling Gen Z’s influence in leading consumer behavior which has been likened to what Millennials did with Facebook and Instagram. In fact, TikTok was the most visited website in 2021!!!
In 2020, The Center for Generational Kinetics released our annual State of Gen Z® report, where we found that the pandemic has already impacted Gen Z and their bend toward practicality with money. They have begun saving money and investing earlier than previous generations did, and they are seeking good job benefits. More than half (54%) of Gen Zers are saving more since the pandemic began, while 38% have opened an online investment account and 39% have opened an online bank account!
Even with this wise financial sense, it doesn’t mean Gen Z is debt-free. On average, the oldest members of Gen Z carry student loan debt of approximately $15,000, down from previous generations, but still likely to grow as the younger members of the generation age up and more return to both in-person higher education as well as pursue advanced and terminal degrees.
Enter Gen Z’s influence on consumer behavior.
Research shows that in moments of economic turmoil, humans are more likely to feel nostalgia. In Gen Z’s case, nostalgia means bringing back fashions from before the days of social media—and social media is eating it up.
“Thrifting” is booming in part because of Gen Zers’ search for sustainable, throwback fashion—including upcycling fashion—which further speaks to their desire to improve the planet. What’s more, is that this sense of nostalgia and sustainability has also created a lucrative side hustle such as selling thrift store finds on apps like Depop and Poshmark.
Beyond fashion, Gen Z is also taking their views to the workplace by seeking better benefits, higher starting salaries for almost all positions, and scheduling flexibility.
It is an exciting time to study Generation Z as they further enter adulthood. At The Center for Generational Kinetics, we will be closely watching this generation’s influence unfold and share our findings with you. Be on the lookout for our next State of Gen Z® study coming soon!
Thank you for being on this journey of research, insights, and discovery with us and Gen Z.