Gen Z is looking to become the most influential consumer generation in the near future. Born between 1995-2010, members of Gen Z can be anywhere from 10-22, late childhood to early adulthood. By 2031, as most members are entering adulthood, Gen Z’s income is projected to reach over $2 trillion, a quarter of global income. This will be greater than even the generation before, millennials, at that point.
When it comes to what Gen Z likes to spend on, there is what Gen Z can actually afford to buy, and where they influence their family’s spending. Many members of Gen Z currently aren’t self-sufficient, so must rely on others to purchase. Most of these are practical purchases, furniture, food, clothes, personal care items, to name a few.
Although these family purchases do dip into luxuries as well, things such as eating out, travel, and electronics. These are going to be more expensive and less frequent purchases that many members of Gen Z cannot afford to spend their money on. What Gen Z themselves are usually spending money on are things such as clothes, books, music, apps, outings, and toys or games. Typical purchases for teens and young adults.
This illuminates what Gen Z prefers to spend on, but what about who Gen Z prefers to spend on? Gen Z is a generation defined by their values. This is reflected in a few ways. First, 20% of Gen Z identifies as LGBT+, double the rate of other generations. Also, 48% of Gen Z is nonwhite, again more than any other generation. And finally Gen Z is projected to be the most well educated generation of all.
This all comes together to create a set of values that no other generation holds. Gen Z heavily prioritizes moral brands, and this presents itself in a multitude of ways. On a basic level, Gen Z is conscious of who they’re buying from. Only 36% of Gen Z say they have any sort of brand loyalty, and 65% research a product’s brand before buying. Many members of Gen Z also heavily prioritize friends and families recommendations over any sort of advertising.
Still, when researching, members of Gen Z are looking for a few specific things. Gen Z overwhelmingly prefers brands that promote sustainable business practice, affordability, ethical business practice, inclusivity, and overall shared principles. On the other hand, Gen Z vilifies brands that are sexist, have scandals, are racist, or are homophobic. Any one of these traits being seen in a brand will cause not only a refusal to buy from, but usually public outrage towards a brand.
Looking more specifically at some of these preferences, 73% of Gen Z are willing to spend more on sustainable products, a rate greater than any other generation. While only 25% say they consider the environmental impact of a company before buying, 54% say they would pay more than 10% more for a more sustainable version of a product. The line between affordability and sustainability is heavily considered.
Also, 51% of Gen Z want brands to support more inclusivity initiatives. In certain industries, such as fashion, 87% of Gen Z believe there should be better gender equality and inclusion. 65% also believe that fashion brands should let online searches happen without specifying a gender. This lines up well with the fact that 59% believe online forms should have a non-binary option. Gender inclusivity is an ever growing factor of importance to Gen Z.
Another way Gen Z differs from past generations is in their use of phones. This has created a giant market for mobile-first marketing. Musical artists in particular have been some of the first people to really use this market. Several prominent rappers actually appearing within a video game to reach a younger and more diverse audience. Travis Scott had a virtual concert within Fornite for example.
Even politicians are now reaching out to Gen Z through social media platforms. Sites like TikTok, Youtube, Snapchat, Instagram, and Discord are all massive to members of Gen Z. On TikTok alone 20% of Gen Z spend five or more hours daily. Those who present and advertise themselves on these sites are going to be seen more than anyone by Gen Z.
And while Gen Z is generally more critical and negative towards most brands. Two thirds of the generation are interested in purchasing through social media directly. It’s the ease of access that really influences and convinces many within the generation.
Keeping this all in mind, there are three brands that rule as the most popular to Gen Z, Google, Netflix, and Youtube. These are followed by Amazon, Oreo, Playstation, Walmart, Target, Doritos, and Nintendo. These brands are either unavoidable, practical brands, or well-marketed, relatable brands. The future of brand perception to Gen Z comes in inclusivity, sustainability, relatability, and moral practices. And brands would be wise to promote those values before Gen Z becomes an even more influential generation.