Generation Z (or Gen Z for short) is a new generation of consumers.
Social media is part of Gen Z’s daily life, so it’s no surprise they share everything on social media, including their purchases. As a result, many companies have realized the significance of having an online presence.
Gen Z’s buying behavior shows they like both in-store and online shopping.
But that’s not all.
If you’re looking for more information on Gen Z shopping habits, you’ve come to the right place.
I wrote this article to give you an insight into Gen Z’s buying behavior. I’ll discuss Gen Z spending habits, consumer trends, purchasing power, and more.
Table of Contents
Generation Z is known for being socially responsible outspoken, unique, and possessing significant buying power. Many Gen Zers are independent, competitive, and open to new experiences.
Gen Z is the most diverse generation and cares deeply about environmental protection, climate change action, inclusivity, and social equality. They question habits and power structures, and they desire change.
Younger generations like the Gen Z Generation want to make a difference.
The question is: how do all these qualities figure into spending habits?
Gen Zers differ significantly from other consumers like Baby Boomers and Gen Xers.
Companies that want to reach younger age groups, such as Gen Z, must implement non-traditional marketing strategies.
For example, Generation Z prefers browsing through photos and watching short videos over reading text (ex., a blog post). As a result, brands now use platforms like Instagram, Snapchat, and Tiktok more than ever to promote their products.
Here are other key findings about Gen Z buying behavior.
Gen Z is an age group that values brand loyalty.
Based on this statistic, brands should focus on building long-term relationships with younger age groups like Gen Z instead of short-term sales or discounts.
Gen Z shoppers aren’t hesitant to try new brands—it’s part of their identity. This age group is much more open-minded to new brands than Gen Xers or Baby Boomers.
Many Gen Zers will try a new product from a no-name brand a friend recommended. However, they will still likely use social media to research products further before buying.
Gen Z grew up surrounded by technological innovations. As such, it’s unsurprising that many of this age group prefer shopping online instead of in-store.
Gen Zers also look for new ways to shop online and try products, such as virtual reality (VR) demonstrations at stores like Best Buy and Amazon Go.
Companies offering these experiences are likely to attract younger consumers like Generation Z.
There are many new technologies (VR headsets, smart mirrors, etc.) retailers with brick-and-mortar stores can use to improve the Gen Z customer experience.
These technologies can help retailers create an engaging experience for their target audience.
Young people like Gen Z are likelier to buy from brands that show social responsibility, such as Toms (a UK footwear brand) and Patagonia (an American clothing company).
Image source: Toms
According to one poll, 85% of Gen Z respondents would pay more for an eco-friendly product than a non-eco-friendly one. 75% also stated they would pay more for an ethically made product than a non-ethically produced one.
Generation Z grew up with ecommerce already existing. They adopted it much earlier than previous generations. As such, Gen Z shoppers often use their smartphones or tablets to shop online.
The typical Gen Zer will use their mobile device to order food through delivery apps like Grub Hub and Seamless. When they need a ride, they use mobile ride-hailing apps like Uber or Lyft.
Friends’ recommendations influence the spending habits and purchasing decisions of Generation Z.
Gen Z shoppers trust their friends more than advertising because they’re often from the same age group and thus have similar values and interests.
Social media plays a significant role in the lives of Gen Zers. It makes sense that they use social media to research products and online stores before buying.
They also use social media sites like Snapchat and Instagram to share photos and videos with friends who are likely making similar purchases.
When younger consumers like Gen Zers have questions or issues regarding a brand’s product or service, they expect a prompt response.
Gen Zers also have high expectations regarding quick delivery timeframes when shopping online.
This generation also looks for product information and reviews online before purchasing.
Generation Z never knew a world without the internet. As such, they expect companies to have a significant online presence and use digital channels like social media to communicate.
These channels give them more control over how they and the brand representative share information.
Many from this generation don’t consider phone calls or face-to-face interactions viable communication with brands. They are so accustomed to communicating through email or text messaging.
Gen Zers would rather interact with brands on their terms than a brand’s imposed terms.
Any brand manager, marketer, or entrepreneur meeting with a Gen Z customer to discuss a potential partnership should try meeting at a neutral location instead of an office.
Generation Z is well-versed in technology and keenly aware of so many brands.
Gen Zers don’t value advertising or marketing strategies targeted to previous generations. They have different perceptions of traditional marketing strategies targeted to other adults.
Today, everything can be personalized or customized, including clothes, shoes, and art. As a result, Generation Z consumers expect personalization from their favorite retailers. If a store doesn’t offer at least some personalization, Gen Zers will likely shop elsewhere.
Personalization entails more than just adding your customer’s name to an email and sending birthday messages. It’s about ensuring the brand tailors every action with Gen Zers according to their specific needs.
With the correct customer information, you can make better product recommendations and have more meaningful engagements with Generation Z.
Companies offering personalized experiences are more likely to build brand loyalty with their Gen Z customers.
If you haven’t already, now is the time to consider how you can use technology to offer personalized experiences to Gen Z shoppers. You can seek inspiration from companies that are already successful in doing it.
Here are some Gen Z consumer habits and trends you need to know.
Generation Z has distinct influencer marketing preferences that should guide your strategy.
Compared to other generations, Gen Z is likelier to seek genuine suggestions from individuals they know and trust rather than companies or advertisements.
Members of this generation want products that speak to their values, interests, and lifestyle choices. This unique characteristic makes them the ideal audience for influencers with similar values.
Social media influencers have significant followings on platforms like Instagram, YouTube, and Tiktok.
Brands today turn to social media influencers because they’re more affordable and often more authentic than traditional celebrity endorsements.
Generation Z prefers guidance and recommendations from people they trust, like friends and family. They’re likely to trust influencers who are also Gen Zers because these influencers look like them and share similar interests.
Companies should partner with young influencers with significant followings. These individuals can help spread the word about your brand through social media posts and video product reviews.
Generation Z grew up having information at their fingertips. They like interacting with brands online through social media platforms.
Gen Zers prefer to learn about products through social media instead of traditional advertising platforms such as television or print media.
When traditional advertising says a product will make you look happy and youthful, younger generations like Gen Z will be skeptical. They will likely look for social proof online before deciding whether or not to believe such a claim.
Generation Z wants their favorite brands to impress rather than sell them.
Brand authenticity is vital to Gen Zers. They want companies to be unique and authentic and to tell stories that resonate with them and their values. They don’t want to be bombarded with repetitive ads or pushed into buying products they don’t need.
Gen Zers care about the environment.
They are willing to pay more for sustainable products and green businesses.
This preference for sustainability or eco-friendliness isn’t just a passing trend. It’s part of a more significant “green” consumption trend that has been going on for years but has only recently gained momentum among this younger generation.
Green brands should show how they produce sustainable and environmentally-friendly products. They should communicate their methods to Gen Z, whether it’s by reducing waste or using renewable energy sources.
Thanks to the internet, Gen Z has a wide range of information on how companies operate and what material they use for their products.
This information makes Gen Zers more conscious than other generations regarding what they buy, where it comes from, and how the brand made it.
Gen Z considers a brand’s positive societal impact (if any) when deciding whether or not to purchase from that brand.
Generation Z consumers care about their purchases’ impact on the environment and culture and are willing to pay a premium for companies that share their values.
Gen Z opposes slavery, child labor, and other unethical practices in manufacturing products or harvesting materials.
Gen Z shoppers are different, not just because of their significant spending power. They care about social causes and use that spending power to further good causes.
Gen Zers won’t hesitate to spend their own money on products or brands they believe can benefit the world (ex., a product from a brand with a feeding program).
Generation Z is growing up in an era of widespread economic uncertainty, environmental collapse, and global terrorism. As a result, Gen Zers have strong feelings on social issues like poverty and climate change.
Members of Gen Z want companies to make a societal, environmental, or cultural difference.
Research suggests Gen Z buyers prefer brands that give back to the community over those that don’t.
You can build your brand around topics vital to Generation Z, such as diversity, animal rights, and environmental issues.
Generation Z is tech-savvy.
Gen Z buyers use technology to shop more than any other generation. Online shopping is a massive part of Gen Zers’ buying experience because they don’t like to shop in-store.
Since they prefer online shopping, brands must focus on Gen Z’s online habits to remain competitive.
Generation Z is more likely to share opinions about products and services in online communities.
Here are strategies to help companies can better connect with this generation online.
Gen Zers do everything on their mobile devices, including shopping. As such, you must ensure your website is mobile-optimized. You should also develop a mobile app if your brand has the budget.
Create accounts on social media platforms that Gen Z consumers use, such as Instagram, Snapchat, and Tiktok. Doing so allows you to communicate directly with Gen Z audiences.
Your website, mobile app, and online stores should be simple and easy to navigate. Remember that Generation Z wants everything to be fast and straightforward.
Generation Z is known as the frugal generation because they tend to be more careful about spending their money than other generations. They are also less materialistic and don’t mind buying used or refurbished high-quality products.
Gen Z is willing to spend money on experiences instead of products. They want lasting memories they can share with friends and family on social media platforms like Instagram.
Here are the most popular categories for Gen Z buyers.
- Experiences (concerts, sporting events, broadway shows, etc.)
- Video games, apps, and other digital media
- Online streaming and entertainment subscriptions (Netflix, Hulu, Xbox Live, PlayStation Plus, etc.)
- Digital music streaming subscriptions (Spotify, Apple Music, etc.)
Note: About 48% of Gen Z shoppers subscribe to music streaming services compared to only 35% of older generations.
- Gadgets (Smartphones, VR Headsets, Virtual Assistant Devices, etc.)
- Beauty products
Parents of Gen Zers exposed their children to financial products early. Many members of Gen Z started saving money as children and had bank accounts, helping them develop crucial money-saving habits.
The financial exposure made these young people more financially literate than previous generations.
In turn, being financially literal gave them more purchasing power and disposable income when they became working adults. As a result, Generation Z has approximately $360 billion in disposable income.
Although Gen Z represents only a segment of the population, their spending influence will dramatically increase in the coming years.
Therefore, retailers need to focus on learning about Gen Z to implement the ideal marketing tactics.
Knowing the size of Gen Z’s collective wallet is just the first step in creating strategies that will capture the attention of these young shoppers and turn them into lifelong customers.
As I mentioned earlier, Gen Z customers are loyal. However, they’re not overly loyal.
Gen Zers tend not to stick with one brand or product line for more than a year due to the wide range of product options available.
They’ll choose products based on quality and benefits instead of loyalty.
However, if your brand can demonstrate why your product is better than the competition, you’ll likely get long-term Gen Z customers.
Gen Zers value integrity and transparency in their favorite brands. They expect brands to be honest with them and want companies to do what they claim to do.
They also want businesses to provide genuine interactions.
Gen Z consumers dislike manipulative advertisements and marketing strategies that come across as manipulative. They don’t like advertising that tries too hard to sell a product or service.
They’re also more skeptical about marketing than older generations.
While Gen Zers tend to be price-sensitive, they’re still willing to pay more for products and services from companies that support worthy causes.
For example, Gen Z buyers would be ready to buy clothing from an expensive brand if it proves it doesn’t use child labor to manufacture its products.
Here are the four stages of the Gen Z consumer journey to help you understand this segment of your audience.
Gen Zers have a keen awareness of various brands and love higher-quality items. They like being part of an exclusive group and want to be fashionable, so they often closely follow trends.
Gen Zers like looking for products online on Google or social media platforms like Instagram. They don’t rely on the marketing spiels of salespeople in brick-and-mortar stores or ads in magazines and billboards.
Many brands fail because they either don’t have an online presence or don’t use it effectively. If your brand doesn’t have an online presence, you’re losing out on Gen Z customers.
Gen Z consumers decide which brand to buy from after carefully considering all options.
They’ll purchase after reading reviews and learning what other customers say about the products they’re considering.
After purchasing, Gen Z customers will likely continue shopping with other retailers, either online or in physical stores.
I hope my insights in this article have helped you understand Gen Z spending habits and brand and product preferences.
Based on the information I discussed, it’s clear that businesses must implement new ways to attract their Gen Z audience. Use that information to better target your Gen Z customers.
You can also visit my blog for more business and ecommerce tips.