Clarkston Consulting https://www.facebook.com/ClarkstonConsulting https://twitter.com/Clarkston_Inc https://www.linkedin.com/company/clarkston-consulting http://plus.google.com/112636148091952451172 https://www.youtube.com/user/ClarkstonInc
Skip to content

What Companies Need to Know About Generation Z Consumer Behavior

Members of Generation Z – “Gen Z” – have now entered their early twenties and are already a bold force in the modern workforce and society at large, with an increasing number of them working full-time jobs or making money with side hustles.  Gen Z holds the keys to  $360 billion in purchase power and has significantly more influence over the consumer market than their actual spending power would suggest. That’s because they have a strong influence on their parents’ buying decisions and wider product trends across other generations as well as their own.  Companies that understand Generation Z’s consumer behavior and trend shifts will know how to strategically market to one of the most powerful generations of consumers. 

Generation Z Consumer Behavior

As the generation most likely to discover new brands on digital channels, from social media platforms to ads on websites and apps, Gen Z has become notably less loyal to brands as a result. This generation tends to be informed consumers and will often research and weigh options before making a buying decision. They are also inclined to save earnings, holding up their reputation as thrifty consumers who’ve been shaped by economic uncertainty and learning early on how to find deals online.  

Because of the emphasis on value for their money, Gen Z purchase behavior is highly influenced by reviews and word-of-mouth through media. With access to a larger list of brands than ever before, Gen Z tends to be much less attached to specific brands, instead preferring to shop around for the best deal.  

Compared to older age groups, Gen Z shoppers are less likely to trust companies. Instead, they choose to follow influencers on Instagram and YouTube, who are seen as more relatable and trustworthy than online advertisements or celebrity ambassadors. The most successful brands take advantage of this by making the switch from traditional digital marketing to influencer marketing strategies.  

Purchase Criteria

In our increasingly connected world, consumer awareness is on the rise – including what, how, and where we consume. Gen Z places high importance on brand ethics and corporate social responsibility, even more so than Millennials. They favor brands that ensure sustainable sourcing, production, and labor, and are willing to spend more on brands that uphold strong ethical values. In fact, 75% of Gen Z believes sustainable purchases are more important than brand names and are willing to pay more for sustainable products.  

Gen Z isn’t just buying a product, they’re buying into a brand, and they want to feel a deeper connection to that brand through their shared values. As such, companies looking to win over Gen Z need to create an authentic brand voice that can be easily researched and reached by socially conscious consumers. 

The Where & How

Digital marketing experts estimate that most people see about 6,000-10,000 ads per day. As the most prominent group of online users, Gen Z is definitely on the higher end of this range of daily ad exposure. They are highly responsive to social media and website ads, and 88% say they prefer an omnichannel shopping experience. One consideration for brands looking to appeal to this demographic is to tie personalized offers and rewards into social media.  

Driven by a strong sense of individuality and the need to reflect their values, preferences, and interests with every purchase, Gen Z seeks a personalized and authentic shopping experience. Methods typically used to win over and retain customers, such as discounts and rewards programs, are less popular with younger consumers. Brands need to show a mixture of value, quality, and ethical practices to tap into the Gen Z wallet. 

Additionally, Gen Z consumers demand a seamless buying experience and have high expectations for the appearance, functionality, and security of the online stores they shop at. With a hunger for instant gratification, convenience is one of the biggest drivers in Gen Z’s purchase behavior. Ease of checkout, fast delivery, and easy returns are not only favored, but expected by shoppers. The emphasis on convenience also manifests in payment methods, as Gen Z grows increasingly reliant on alternative options like “buy now, pay later” (BNPL) services, mobile wallets, and peer-to-peer payment apps, like Venmo. 

Gen Z knows exactly what it is they want: it’s high convenience and reasonable prices for value. Consequently, even the most eco-conscious generation can fall to the allure of fast-fashion brands like Shein, Amazon, and FashionNova that offer fast shipping and unbeatable low prices. Although viral trends and affordability pose a challenge to the impulsive purchase behavior of Gen Z, these younger customers remain a very conscious consumer and will shift their loyalty if brands don’t meet their needs.  

Summary

Gen Z is one of the most influential demographics to market to, and companies must understand how to appeal to their preferences. Gen Z shoppers know what they want and are strong in their demand for high-quality, speedy, and seamless shopping experiences with companies they can trust and feel good about supporting.  

In a world where information has never been so available and accessible, consumers are making very specific and predictable purchase decisions. In response, companies must make regular adjustments to their strategy to capture the interest and buying power of each newly ascendant generation of consumers to stay relevant in today’s fast-paced market. 

Subscribe to Clarkston's Insights

  • I'm interested in...
  • Clarkston Consulting requests your information to share our research and content with you.

    You may unsubscribe from these communications at any time.

  • This field is for validation purposes and should be left unchanged.

Contributions by Julia Hoffman

Tags: Customer Experience, Consumer Products Trends
RELATED INSIGHTS