It might be hard to remember now, but back in 2009, the Old Spice brand was fading into retirement. Its customer base was, like the name, old, and shrinking. But then, with a single absurdist Super Bowl ad that spoke directly to the newest generation on the block—millenials—the brand was reignited. It's now the second-highest selling deodorant brand in the country and 3rd highest selling bodywash.
Now, more than 15 years on from that ad and the marketing campaign it kicked off, businesses find themselves grappling with a new generation. Generation Z, Gen Z, Zoomers, the names go on. Whatever you call them, Gen Z buying habits will profoundly shape the economy in the very near future, as they're projected to have $12 trillion in global purchasing power by 2030.
Regardless of industry or location, a sizable portion of your customer base is about to consist of Gen Z shoppers. How confident are you in your ability to effectively market your offerings to them? If there's any doubt, let CMG Local Solutions guide you on all things Gen Z, starting with Gen Z shopping habits.
Who Is Gen Z?
One of the few characteristics all Gen Z consumers have in common is that they were born between 1997 and 2012. Another is that they've grown up with smartphones. If Millennials are defined by their digital native status, we should highlight their smartphone saviness. They don't remember dial up as well as older generations. As far as Gen Z is concerned, they've only known an environment with instant access to just about everything, all in their pocket.
Beyond that, Gen Z is one of the most diverse generations in the United States. There are over 71 million Gen Z consumers in the United States, spread across every corner of the country. So to truly understand Gen Z, businesses have to understand this diversity and all the forms it takes.
Where Gen Z Lives
Location is a powerful driver of Gen Z purchasing behavior because—as we'll discuss below—they aren't online only shoppers. Again, what stands out for Gen Z is how hard they are to generalize, they aren't confined to big cities like New York or LA. An equal share of Gen Z lives in small towns, medium-sized towns, or large cities, 24% for each. Particularly noteworthy is that they are more likely to live in small towns and less likely to live in cities over 1 million people than the average for all Americans. So if you're a business owner in a small town, Gen Z will be an outsized portion of your potential customer base.
Gen Z's housing situation is similarly impactful. Currently, Gen Z is more likely to live in an apartment and rent their housing than the average population. However, there's reason to believe that will change in the near future.
The most recent data shows 30% of Gen Z are actively saving to buy a home while 25% say they're planning to buy a home in the next 12 months. That figure represents a higher total than the trend for all adults in the US. Financial institutions and home services companies will soon find themselves catering to Gen Z buying habits more than any other generation.
What Makes Gen Z Tick?
Gen Z may be spread amongst small towns, rural communities, and big cities, but that doesn't mean they don't agree on anything. The overwhelming majority place an emphasis on their mental health and personal well being. Only 1% of Gen Z believes mental health and personal well being is not at all important.
Perhaps that emphasis on mental health is paying dividends. Substantial pluralities of Gen Z take a more optimistic lens towards their economic situation than the average adult and are more likely to say that being successful is one of the most important things in life than other generations.
How Gen Z Spends Their Time
Another critical element shaping Gen Z spending habits is where and how Gen Z spends their time. Gen Z is used to having it all, so they like to spend their time just about everywhere, including with their digital time. Large numbers of Gen Z consumes digital video content, TV, movies, digital music, and radio in the last four weeks.
Marketing to Gen Z means understanding which members of this generation are using which platform and when. There's no one-sized fits all or one platform for all in this generation. Zooming in on audio, we see that Gen Z continues to be a generation that spreads its time considerably. There's no one audio listening platform that receives a majority of their listening time.
Instead, they split their attention between streaming music, music videos on YouTube, and listening on the radio. Having a sound radio strategy that can reach both the radio audience and the streaming music audience offers one of the best methods for reaching Gen Z where they are.
The Gen Z Customer Journey
With a foundational understanding of who Gen Z is, we can begin to better understand Gen Z shopping habits. Their ability to instantly access whatever they want profoundly shapes their customer journey, frustrating traditional marketing methods. For starters, Gen Z tends to be always shopping in some sense or another, largely because of their media ecosystem.
How Information Sources Shape Gen Z Purchasing Behavior
No generation spends as much time consuming media per day as Gen Z does. On a typical day, Gen Z is flipping between YouTube, Instagram, TikTok, and Snapchat, often while watching streaming or traditional TV or listening to a podcast. At first you might think that this divided attention span would diminish the utility of marketing towards this group, but that isn't the case.
Part of the reason Gen Z shopping behavior is so constant is because they're consuming so much media and information each day and these are driving them into purchasing behaviors. 72% of Gen Z was receptive to social media ads and 47% were receptive to ads on streaming TV, especially if it meant free content. Meanwhile, 61% of Gen Z goes to a company's website or wants to purchase a company's product after hearing an ad for them on a podcast.
The result of Gen Z's varied media diet is a customer journey with numerous touchpoints for marketers to tap into. But, there's some real concerns here too. Marketers need accurate data to segment customers and target the members of Gen Z who will actually purchase. Because Gen Z is consuming information and advertisements just about everywhere, marketers face a challenge in finding where their potential customers are.
Gen Z Shopping Habits Go Beyond Online Shopping
Millennials were the first generation to experience and adopt online shopping. As they've grown, started companies and families, they continue to enjoy the convenience of online shopping. Understandably, companies came to believe that online shopping should be the primary focus. But Gen Z has upended this conventional wisdom by preferring the in-store experience at higher levels than Millennials.
When it comes to buying beauty products, home and garden, jewelry, leisure, and groceries, sizable portions of the Gen Z populations prefer the in-store experience. Gen Z online shopping is best described as online fashion shopping, as only apparel and shoes get a majority of Gen Z to prefer online over in-store buying.
However, just because Gen Z is at a store, doesn't mean they're there to buy. While marketers might want to imagine a journey from product discovery online to purchase at the store, Gen Z demonstrates it's not that simple. While podcasts are the top product discovery channel for Gen Z, ads seen at movie theaters and public transport rounded out the top 5 product discovery channels.
Stores can also kick off a new customer journey when Gen Z sees a product in a store for the first time. Only 63% of Gen Z purchases at least occasionally on impulse; lower than almost any other situation. That means Gen Z shopping habits aren't all about getting them into the store either. For Gen Z, they're more likely to start researching your brand online after seeing it in stores than purchase right there in store.
Get Your Business Ready for Gen Z Purchasing Behavior
If you want to avoid playing catch up to Gen Z's shopping habits, get started on a Gen Z marketing plan today. As this generation pursues unique interests and desires, your business will need access to impeccable data and effective strategies to capture their attention. You don't need a massive marketing department, just a dedicated partner like CMG. We can create custom solutions to put your business in front of the exact Gen Z segments likely to buy. Contact CMG Local Solutions today to get ready for Gen Z.
