Young generation, Generation Z, tends to spend their money, but what exactly are their spending habits?
In the ever-evolving world of marketing, understanding the consumer habits of different generations is crucial. One such demographic that has captured the attention of businesses worldwide is Generation Z, also known as Gen Z.
Research shows that for Gen Z, authentic marketing is more valuable than relying on influencers with a high number of social media followers. This generation values genuine and relatable content, preferring unique products over well-known brand names.
When it comes to spending habits, Gen Z wields significant influence over the money-spending decisions in their households. Clothing/shoes, eating out, groceries, and personal care products are among their top monthly expenditures. Interestingly, studies suggest that over 50% of Gen Z have purchased a product or service they saw in a paid social ad.
However, Gen Z's approach to advertising is unique. They are not primarily interested in well-known brands like Lululemon or Adidas. Instead, they prefer brands that align with their values, such as sustainability and digital well-being. When doing paid ads, it's important to keep in mind that Gen Z wants to see something positive, something that makes them feel good or laugh, not something that makes them self-conscious.
Social media plays a significant role in Gen Z's shopping journey. Most of the time, they use it for inspiration and research, not direct purchases. In 2020, 72% of Gen Z said they are more likely to buy from a brand if they follow them on social media.
In terms of influencer marketing, micro-influencers are proving to be the most effective for Gen Z. These relatable everyday voices, often found on platforms like Instagram, TikTok, and YouTube, focus on authenticity, eco-consciousness, and niche interests. They create localized, targeted content that resonates with Gen Z values such as sustainability and digital well-being, especially in DACH regions where trust and personalization matter greatly.
It's worth noting that only 15% of Gen Z feel represented in the ads they see. This highlights the importance of creating content that is real and relatable, not perfect and idealistic.
Interestingly, despite their digital nativity, Gen Z prefers shopping in person rather than online. This preference might be due to their desire for real-life experiences and the ability to touch and try products before buying.
Gen Z's spending power, when combined with Millennials, is nearly 3 trillion dollars in 2020. In the US alone, Gen Z spends about $35 billion annually. This makes them a good audience to target for new or unknown products, as long as the product's value aligns with their preferences.
Another fascinating fact about Gen Z is their financial literacy. Studies show that Gen Z has opened savings accounts before turning 10 years old, with 21% of Gen Zs having done so. This financial acumen could shape their consumer behaviour in the future, making them a valuable demographic for businesses to understand and cater to.
