Gen Z girls like experiences, guys like products… and more insights for new report
Gen Z is smarter with money than the Millennial generation although these current 14-to-21 year-olds do like to spend their disposable income on products and experiences with a clear split between the genders, says anew US study by The Center for Generational Kinetics (CGK).
CGK found that Gen Z is a “throwback generation,” already working, saving money, and determined not to end up like Millennials. In fact, 77% of Gen Z currently earn their own spending money through freelance work, a part time job, or earned allowance. This is an interesting number given that this is around the same percentage of Millennials surveyed, who are 10 years older and have more access to work opportunities.
When it comes to spending their earned money, it turns out that Gen Z males prefer to spend more on products and Gen Z females want to spend more on experiences. Not that Gen Z makes purchasing decisions in a vacuum. For them, shopping is a ‘social’ activity in the true modern sense of the word, beyond the mere act of meeting up with friends to shop. Most Gen Zers (78%) have used ratings and reviews to purchase an item in the last 30 days and almost half frequently ask the opinion of friends or family before making a purchase.
After speaking to around 1,000 Gen Zers and the same number of Millennials, the researchers found that the former are primed to become even more influential than the latter, due in part to a more realistic mindset at a very early age.
So how do these ‘realistic’ consumers spend (and plan to spend) their money? CGK said one of the more compelling insights of the study was that Gen Z guys prefer to spend more on products than Gen Z girls, who prefer experiences. Products were defined as such items as clothes, electronics, jewellery, technology, and experiences were defined as activities such as eating out with friends, going to the movies, attending concerts.
This makes them very similar to Millennials and CGK said that as both generational groups align here, companies should be thinking in gender-specific (rather than generational-specific) ways as they market to these emerging adults. For example, airlines and hotels might consider tweaking their marketing to more directly align with teenage women and in doing so will end up creating the opportunity to align with Millennial women too.
As far as purchasing decision influencers are concerned, online ratings, reviews and other user-generated content sources are not the key. In fact, 48% of Gen Z say they often or always get input from friends and family before making a purchase.
Millennials are only slightly less likely than Gen Z to ask for input on purchases (44%) so companies need to understand the huge importance that both Gen Z and Millennials place on purchasing input from friends and family.
The study also found that 30% of Gen Z prefers to get information on a brand from a real customer of the brand and 19% from an online influencer, meaning a well-known blogger, YouTube or internet personality. But Millennials are even more likely to say they want to hear from a real customer and less likely to say they want information from an online influencer.
And 30% of Gen Z believes YouTube ads are more trustworthy than any other source of advertising, including TV, print, radio, and social media. Considering how much time Gen Z spends watching online videos, this makes sense.
Millennials, on the other hand, are more traditional, viewing TV ads as most trustworthy. In typical Millennial fashion though, social media isn’t far behind, chosen as the second most trustworthy source of ads.
Understandably, ratings and reviews can close the sale with Gen Z. When asked whether they used online ratings and reviews in the past 30 days to make certain purchases, their customer pathway is clear. Whether it’s to buy a product online (72%), purchase an item (78%), pick a movie (69%), decide not to purchase an item (66%), or eat at a restaurant (53%), Gen Z has strongly integrated online ratings and reviews into the fabric of their consumer decision-making (immediately after the influence of friends and family).
Some 52% of Gen Z even uses ratings and reviews while shopping at a retail store to comparison shop or price match online while physically in the store and they hardly make a purchase without getting feedback from other customers, who they trust implicitly.