By Abhay Singhal, Co-Founder and CEO of InMobi Advertising
Generationally speaking, Millennials are currently at the height of their purchasing power. They’ve bypassed the Boomers and even Gen X in terms of influence but, if all trends continue as they are, their reign may be limited. Gen Z is right on their heels, with the help of the Zillennials, those on the cusp of the generations, gaining influence at a breakneck speed. While the dollars spent have not quite overtaken Millennials as the core purchasing group, their influence on tone, brand selection and media consumption is very strong. And brands need to take them seriously, now.
Gen Z is the first generation to grow up completely online and see social media before they were even allowed to create an account. They’re far better suited than previous generations to navigate and influence the economy quicker and with wider ramifications than their predecessors and this will all take place completely online. Just a peek at recent numbers is all you need to see the growing influence. More than 60% of Gen Zers used their mobile phone to make 2021 holiday gift purchases, significantly more than any other age range and e-commerce is expected to represent more than 40 percent of digital spending by consumers in 2022, according to eMarketer.
Gen Z will widely expand upon Millennials’ interest in co-creation. They head to live video and influencer content before making a purchase and will be the generation that will be the most aggressive to press brands to be better global citizens, drive sustainability and authentically communicate with (not just talk to) their core audiences.
While Gen Z consumers are still years away from maximizing their earning and spending potential, democratization forces such as Web3 and cryptocurrency, threaten to remake the economy. If this year’s slate of Super Bowl commercials was any indication, now is the time for brands to prepare their Gen Z strategy. And if they haven’t started already, they are at serious risk of falling behind the competition.
Here are some ways for brands to get started:
1) Widen Your Lens: While the pandemic has caused every consumer age group to become less brand loyal, this has always been a core component of Gen Z. The first generation to be born social natives and mobile first, it has a wealth of brands at their fingertips, regardless of country of origin. Global influence now reigns supreme. South Korea has produced one of the biggest international pop acts (BTS) and streaming shows (Squid Game) on the planet., English-language singers are routinely collaborating with Spanish-speaking acts, and innovations in social made born in China. Our efforts to create an innovative lockscreen offering called Glance was greatly influenced by our learnings across the globe. The walls that previously siloed the culture and products of different countries have been made invisible by the internet.
2) Embrace new platforms: We know all how important TikTok has been to Gen Z. More than half of Gen Zs are on the video-sharing platform, by far eclipsing the 39% of Millennials who use it regularly. But TikTok is just the tip of the spear. The platform that will dominate Gen Z’s time online by the time they reach full purchasing power has not made it to North American audiences. Innovation being churned-out in Asia will continue to influence Gen Z culture in North America, culture, perhaps even more so than the culture of their home country.
3) Micro-influencers: While millions may hang on the words and recommendations of the various Kardashians and Jenners and other large-audience influencers, the rise of Twitch, TikTok and other platforms has led to a larger variety of micro-influencers or those with millions of followers that focus on specific niches. Smart brands not only target and create partnerships with established micro-influencers in their target group but also use monitoring platforms to identify the new crop of micro-influencers to build relationships before they make it big (and before the competition discovers them). Micro-influencers are representative of a larger trend that no two Gen Z consumers are alike. Gone are the days when you could place your product in the summer blockbuster or with the right global pop star and count the purchases rolling in. To succeed with the various, fractured Gen Z audience, you need to identify and target with a holistic omnichannel strategy.
4) Fluency with new concepts: Nearly 60% of Gen Zs investing in various cryptocurrencies believe it will make them millionaires. While this rapidly moving space can create a lot of uncertainty and many could lose a lot of their money, it is nonetheless exciting and top of mind for many Gen Z consumers. While the shape and influence of Web3 is uncertain right now, the momentum behind it is based on the idea that ownership will be more decentralized where experiences will be interconnected.
5) The future is not platforms but experiences: Though the pandemic temporarily paused the experience economy, it is expected to return with force as the pandemic becomes endemic. While there are many calculations that go into both Millennial and Gen Z’s interest in experiences over physical goods, it is most strongly tied to the environment. This is not to say products will have no place in Gen Z’s world but it does mean it’s not enough to just talk about a product’s features; you need bigger and better content development to tell the authentic origin story behind the product and the brand. In other words, brands will need to invest in sticky content that cuts through the clutter.
While the Gen Z story is still being written, brands should not wait any longer to prepare for their cultural and spending dominance. Because it is not as easy as identifying what makes them tick and planning accordingly. The ubiquitous connection to online experiences means they will influence and be influenced by culture in the upcoming years and it will take real dedication and skilled analysis to track their behaviors and better understand, identify, engaged and acquire them wherever they are most active.