The line used to read: By 2020, Generation Z will make up 40% of all consumers in the U.S. and influence nearly $4 billion in spending. Well, 2020 is here and those numbers are no longer projections. Whether retail is ready or not, it’s time to add Gen Z to the roster of fresh-faced consumers impacting the market.
While sharing similarities with its millennial counterparts, this cohort (born after 1996,
according to Pew Research), has its own unique needs and objectives that have the potential to impact the go-to-market strategies of the flooring industry for years to come. Both a consumer in need of engaging and a new workforce member in need of hiring, retailers looking to bring their operations into the new decade need to set their sights (and marketing strategies) on this up and comer in the market.
Meet Gen Z
Gen Z already makes up a quarter of the population in the U.S., or roughly 65 million, according to published reports, compared to millennials at 73 million strong. Their powerhouse numbers so early in their development equate to powerful market influences that will resonate now and into the foreseeable future.
But who exactly is Gen Z, and do they really differ that much from their millennial brethren with respect to their impact on the retail strategies of today and tomorrow? Millennials have been touted as digital know-it-alls, the most ethnically diverse group of the age and today overshadow baby boomers in size and nearly in spending power. Turns out, Gen Z is all of the above and then some.
For example, while this cohort is also labeled digital savants, it takes on a different meaning when you consider they are the only generation to be born with immediate knowledge of and access to the Internet. “Millennials grew up with technology, whereas Gen Z hasn’t known a world where we can’t order pizza, FaceTime our mom and text a friend at the same time,” Madison Bregman, a member of Gen Z and founder of youth marketing firm GirlZ, told FCNews. “The intuition we have with technology is different, and we figured it out very quickly.”
Gen Z is also projected to surpass millennials as the most ethnically diverse group in generations. In fact, Gen Z is on track to be the best educated and most diverse generation yet, according to Pew Research, with nearly half (48%) being racial or ethnic minorities.
Pew Research also shows that roughly six-in-10 Gen Zers—like millennials—say increased racial and ethnic diversity is a good thing for our society. For comparison, Gen Xers are somewhat less likely to agree (52% say this is a good thing) and older generations are even less likely to view this positively. Experts agree these views can have implications for successful marketing and advertising campaigns in the future.
While Gen Z has not overtaken millennials as the powerhouse in spending, their ability to influence their parents is above and beyond that of any generation before them, therefore making them viable access points to market dollars. “Young people have had increasingly more influence on their parents’ decisions from the beginning of millennials until now,” said Gregg Witt, co-founder and chief strategy officer at Engage Youth Company. “What you find is there have become, interestingly enough, a lot more similarities than differences. Their influence is often peer to peer, and that’s a big shift. I love my parents, but there was no peer-to-peer influence. And, that influence is happening at an earlier age.”
Bregman noted Gen Z’s access to and understanding of information as a possible driver for their influence. “In the past, parents were the decision makers and didn’t really care what their kids thought. But we have so much access to different things that our opinions are very good or at least taken into consideration. That family dynamic has changed as we’ve gotten more access to different information and become more aware.”
Impacts on marketing
The inherent differences between Gen Z and those generations before them will have some lasting impacts on future marketing strategies. For example, with their “digital native” status, it’s impossible to reach a Gen Z consumer today using the same tactics used to reach their parents.
Digital advertising and marketing as a key strategy for growth is a no brainer in 2020. Social media marketing, however, is no longer just an option or something left for tomorrow to learn. “You need to be findable,” Witt said. “You need to have a presence on the social platforms that matter. You need to be active, and that’s a very, very tricky thing for some established companies that are not necessarily big companies with large marketing teams. They’ve just ‘got the best stuff.’ This generation wants that best stuff, too, but you’ve got to sell it to them.”
The generation’s deep understanding of technology and messaging also impacts those digital and social strategies with as of yet undetermined and vast implications. “They have grown up with such an innate understanding of usage and creativity with technology that they’ve become knowledge managers—very astute knowledge managers,” Witt said. “That’s not limited to Gen Z—you and I may be just as good at doing that—but the difference is they are all like that. The impact on brands is that [Gen Z] knows how to look at, sift through and organize information very, very quickly. There are a lot of implications on that.”
Experts agree, that ability means brands need to be more transparent and authentic to turn a Gen Zer’s head. “I don’t love the word authenticity, but that’s what it comes down to more than anything,” Bregman said. “A lot of people talk about the six-to-eight-second attention span of Gen Z, but in reality, we call it a BS meter. We’re able to determine within the first few seconds whether something is worth our time. And the biggest turnoff is if something is very obviously inauthentic, fake or trying too hard.”
While changes may be needed as this generation grows into adulthood, experts agree it doesn’t mean those looking to tap this cohort’s potential need to run themselves ragged. “It’s not that you need to be on a new social media platform when you can’t even get the Instagram going,” Witt said. “It’s hard if you’ve finally figured it out and then someone comes in and says, ‘Now you have to Tik Tok.’ No, you don’t have to. But, figure out the social platforms you’re going to do and do them well. And, make sure you’re tuned in.”