Born between 1997 and the early 2010s, Generation Z is often referred to as the digital generation. This generation has grown up with the internet, social media, and smartphones. Consequently, Gen Z is hyper-connected and aware of the socio-economic conditions as well as the impact of their buying decisions.
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Statistics reveal that 48% of Gen Z is ethnically diverse. Furthermore, this generation has an estimated buying power of $143 billion. Companies must diversify their approach and marketing strategies to cater to this group of individuals whose earnings are said to expand beyond $2 trillion by 2030.
Here is how Gen Z is shaping the future of shopping.
Price and Convenience
It is interesting how generation Z is not likely after the cheapest price instead they want the best deal. Several factors tie into their final decision of investing in a product. These include the consumer experience, product quality, and brand reputation. Convenience is an important factor that affects buying decisions across generations, but more so for the digital generation.
The entire buying process needs to be convenient. From searching information online about a product to the point of checkout, the experience needs to be seamless. Otherwise, Gen Z will turn to the competition. This is forcing brands and companies to step up their game and invest in making the online shopping experience seamless for their consumers.
Unity in Diversity
Almost half of Generation Z is ethnically diverse which creates a demand to be represented in mainstream media. Gen Z has been incredibly vocal about supporting brands that create products for individuals across races, genders, and ethnicities. Reports suggest that more than 60% of the Gen Z population is likely to buy from brands that have ethnic and gender minority representation.
For the longest time, women of color were unable to find foundation shades that matched their skin tone perfectly. When Rihanna launched Fenty beauty with 40 foundation shades, not only did she receive appreciation for inclusivity but also it paved the way for other brands to follow. From creating a diverse foundation range to making clothes for plus-size individuals, there is an expectation for brands to cater to a wider audience.
Sustainability and Social Issues
Generation Z isn’t just actively campaigning for social issues but putting their money where their mouth is. Survey reveals that a majority of Gen Z is likely to support brands that conform to ethical practices. Furthermore, it states that they are willing to pay 10% more for products that are sustainably produced and eco-friendly.
They do not just support brands that appear to be ‘green’ or ‘clean’. With access to a plethora of resources and information online, this generation believes in transparency.
Social Media Presence
It is important to have a strong social media presence currently. A company’s branding and online presence are key aspects that the tech-savvy digital generation takes into consideration before investing.
An online presence can be utilized to convey the company’s standing on social and ethical issues. Furthermore, it plays an important part in customer engagement.
Personalization and Customization
This generation has had access to customization more than the previous generations. They can create customized plans, playlists, skincare products, etc., which have led them to expect a certain degree of personalization from companies and brands.
Gen Z will pay more for a product if it is tailored to their needs. The market offers many alternatives to a product therefore, there is no need to settle for anything but the best. Generation Z prefers brands that can tailor products to meet consumer preferences over those providing a basic experience for all.
In a nutshell
McKinsey finds that the core element which drives most of generation Z’s behavior is a need to find the truth. Where the generational shift poses challenges and calls for a change in marketing strategies, it opens new avenues to explore. Gen Z is the next generation that will influence business growth. As long as brands reflect the values this generation holds near and dear, they will get rewarded with support.