Marketers talk all the time about Gen Z purchasing power. Gen Z’s age currently ranges from 10 to 25 years old. Just as they were with Millennials and Gen X, brands are obsessed with Gen Z’s shopping behavior as they come of age.
Their influence on household purchasing decisions, the trends they favor, and how they’re leading their cohorts to be more discerning have been hot topics since the first members of this generation hit their teens. But all that glitters isn’t gold.
Let’s take a look at the myths surrounding Gen Z purchasing power, the factors impacting their ability to spend, and how retailers can use this information for effective engagement.
Gen Z is the current powerhouse in the retail space, but brands are already sizing up the next generation of shoppers. With Gen Alpha, it's a chance to start early and win customers for life.
After more than two years of lockdowns due to a global pandemic, they’re grappling with an inflation rate that’s reached historic, 40-year highs. They’re paying huge sums for housing and gas while trying to pay off their student loans.
While one study found that they steer the lion’s share of family household purchasing decisions, those who live alone have far less purchasing power than their predecessors.
Some sobering stats:We need to start looking at the realities of marketing to Gen Z –– they’re a financially strapped and stressed demographic that want to see real value in any products they consider purchasing.
Millennials are actually the largest customer group, while Baby Boomers have the most spending power.
But rather than trying to assess the worthiness of marketing to a specific age demographic based on the size of their disposable income, retailers’ should look at what demographics align with their existing offerings.
It’s a lot easier to expand inventory or marketing campaigns to target groups with similar priorities once you’ve already homed in on a core customer base. Once the core customer is understood, it’s easier to find copycat shopping priorities that drive customers towards the brand base.
A demographic’s attributes, purchasing history and behavior can tell us a lot more about how to market to them with the right message than creating campaigns based on generation alone.
73 percent of digital natives are involved in B2B product or purchase decision-making, and about one-third are sole decision-makers. Learn how to win their trust.
Instead, retailers need to target sub groups based on shared behavior. Here are two examples:
Gen Z doesn’t lead in terms of spending power, but that doesn’t mean it’s safe to discount this frugal powerhouse of a generation. Savvy retailers will learn to broaden their appeal by customizing their messaging across generations.
