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Update: Generation Z and Covid-19

four people taking a picture of mona lisa with phones

A few years back, in 2018, Seller Accountant did a mini series on the blog about how to harness the spending power of Generation Z (born between 1996 and 2010). While those articles (here and here) were very informative, a lot can change in two years – or in six months, as we’ve all seen with the ongoing Covid-19 pandemic. With that in mind, let’s take a look at some updates on how to best connect with Gen Z as consumers and get the most out of your marketing budget.

Spending Power

Gen Z currently accounts for about $44 billion in annual spending, and with the older half of the generation entering the workforce and earning more disposable income, it’s more important than ever to understand their spending habits. In a 2017 IBM survey, 59% of Gen Z said they received an allowance, while 46% worked part time or made money online. While many of these young adults are aging out of earning an allowance, those young enough to still live at home believe they have major sway over their household and family spending. Over 70% of Gen Z says they influence their family’s purchases of furniture, household goods, food and beverages, shoes, and clothing. This has important implications for advertising to Gen Z – they’re not just buying for themselves, they’re paying attention to family needs as well.

Gen Zers have significant influence on family spend

Source: Uniquely Generation Z


Online Experience

Gen Z, as the first group to have grown up surrounded by tech, has no patience for sites that are slow to load or difficult to navigate. Therefore, user experience on the web is more integral to reaching Gen Z than any other generation. If you are seriously considering revamping your brand’s storefront site, it may be useful to hire a UI (user interface) design firm to audit your current site and figure out what to change. This could be something as simple as placing clear call-to-action buttons within product pages or optimizing search function or category search on your site. As most members of Gen Z prefer to use a smartphone over any other type of device, it’s even more important to optimize the mobile version of your site. This means having a dedicated mobile site, not just a tiny unreadable version of your desktop page. Many out-of-the-box web services like Squarespace have built in mobile optimization, but any web design firm should be able to make your site look great on a smartphone.

Ad Reach

As a group of young people, Gen Z is still developing brand loyalty – 38% of those surveyed by analytics firm CrowdTwist said that their idea of brand loyalty involves the ability to shop around for lower prices and higher quality. Gen Z is also heavily involved in social media, and is strongly swayed by influencers and affiliate marketing. While they value the opinions of friends and family, they also connect with strangers on social media in a way that makes their opinions just as valuable. As an implication for social media ads, this means that product endorsements and sponsorships are just as important as in-feed ads on Instagram and YouTube, as these types of marketing make brand connection feel organic.

Which social media platforms Gen Z checks on a daily basis

Source: The most popular social media platforms with Gen Z

As far as which social media platforms to concentrate on, YouTube, Instagram, and Snapchat are the way to go. Short-form video platform TikTok is also on the rise with Gen Z, and while some Gen Zers do use Facebook, most prefer other platforms and don’t check Facebook every day. Gen Z also responds well to humor in ads – one survey claims that 72% of Gen Z consumers are more receptive to ads that appeal to their sense of humor. Gen Z asks a lot from its ads – a fifteen-second Instagram ad that’s funny and showcases a product in an appealing way is not always easy to come by – but payoff comes in the form of getting in on the ground floor with a new generation of consumers.

Shopping Habits

While we like to think of Gen Z as a tech-obsessed generation, a huge percentage of shoppers surveyed by IBM stated that they prefer to buy from brick and mortar stores 98% of the time. During this time of limited access to in-person shopping, it is important for brands to optimize their online experience by including multi-angle product photos and videos, opportunities to leave and read reviews, and transparency about sourcing, production, and sustainability. Sixty-five percent of Gen Z shoppers also expressed that they feel valued by brands that offer them discounts and rewards programs for customer loyalty.

Gen Z is also an extremely socially conscious group. They know how to “vote with their dollar,” and they won’t hesitate to abandon a company that has been involved in a scandal. They want to know that their products are sourced ethically and sustainably, and they favor small, independently owned companies over large corporations. For these reasons, it is more important than ever for companies to have multiple sales channels off of Amazon; Bezos may make running your business easier, but Gen Z is wary of filling his pockets, especially during such an economically unstable time. In general, Gen Z is more distrusting of and more skeptical towards companies than Millennials.

Implications for a Post-Covid Economy

Due to business closures and social distancing, Covid is poised to bring about an even bigger shift in our economy than your typical seismic cultural event. E-commerce saw a bigger growth in two months of the 2020 pandemic than in the previous decade, now accounting for 27% of all spending compared to the previous 16%.

Boston Consulting Group recommends the following for businesses and marketers to make the most of this new economic era:

  • Reset their view of the world.
  • Lean in on digital, including mobile, at the bottom of the funnel.
  • Don’t miss out on brand strategy and the top of the funnel.
  • Add new capabilities to their arsenal.

It is important that businesses take a detailed look at their ad spending and focus on the SKUs that are most in demand, as overall spending has changed dramatically in several categories in just a few short months. Digital and social media ads are more likely to influence Gen Z and Millennials since the jump from awareness to purchase can be more accessible on these platforms. BCG also found that consumers in younger demographics have been more likely to purchase new products and brands during quarantine, so this may be a good time to focus on brand awareness as well. Times of heightened emotion (like a global pandemic) make consumers vulnerable to brand messaging, especially to those brands that prove to align with their core values. It’s a good time to focus on building out a brand strategy in addition to marketing specific products.

As an entrepreneur, it is natural to want to focus on past data to drive marketing decisions, but when the economy has undergone a seismic shift in a short time, old data no longer applies. A focus on digital and social media marketing will catch the most eyes from a demographic whose spending will affect the economy for decades.

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Uniquely Generation Z: What brands should know about today’s youngest consumers – IBM
Generation Z Spending Habits for 2020 – Lexington Law
Redesigning Retail for the Next Generation – Accenture
Why Gen Z Is on the A List for E-Commerce Marketers – Forbes
The most popular social media platforms with Gen Z – Business Insider
How Marketers Can Win With Gen Z and Millennials Post Covid – Boston Consulting Group
Gen Z vs. Millennials: The Changing Landscape of Loyalty – CrowdTwist

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