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by Infegy Research Team on November 21, 2023
When it comes to consumer behavior, Generation Z or Gen Z is unlike previous generations. This demographic wields significant purchasing power, with an estimated $360 billion in disposable income. As a brand manager or marketer, it’s important to understand Gen Z’s unique needs and preferences in order to successfully target this important demographic.
Gen Z typically refers to those born between 1997 and 2012. There are approximately 65 million Gen Zers living in the United States. This generation has been largely impacted by digital media, climate concerns and the COVID-19 pandemic. Although some in this generation are too young to earn and spend their own income, they still have a significant impact on their households’ buying decisions.
So what values, specifically, drive purchasing behavior in Gen Z consumers? We turned to the social listening power of Infegy Atlas to find out. Here’s what we discovered.
Digital reliance
As the first generation that has grown up solely in the digital age, Gen Z is known for its heavy online presence. Gen Zers tend to work, date, shop, and make friends primarily online. In fact, 54% of Gen Zers reported spending at least four hours a day on social media, and 38% spend more than that. This number represents a significant generational divide, as only 18% of overall U.S. adults spend that much time on social media.
To give us an idea of Gen Z’s buying habits, we looked at online shopping trends.
Figure 1: Post volume analysis related to online shopping trends by age group; Infegy Atlas data, July through October 2023.
In a comparison between online and retail shopping among this demographic (Figure 1), it’s clear who the winner is. Online shopping dominates the younger generations, while older consumers are more likely to visit a brick-and-mortar store.
Figure 2: Interest analysis of various online retailers among Gen Z; Infegy Atlas data, July through October 2023.
When we look specifically at Gen Zers’ social posts related to online shopping over a three-month period, we find that TikTok experienced a 109% increase in posts, Starbucks was up 177% and Amazon was up 50% among this demographic (Figure 2). Starbucks isn’t traditionally thought of as a digital brand. However, when we dove a bit deeper, we found a large portion of Gen Z conversation centered around Starbucks’ mobile app.
Figure 3: Post volume comparison of various online retailers by age demographic; Infegy Atlas data, July through October 2023.
Figure 3 shows the age distribution in posts surrounding three major retailers, Starbucks, Amazon, and Walgreens. As you can see, our target Gen Z demographic is much more likely to be talking about Starbucks than the older generations.
Another interesting trend in this demographic has to do with how Gen Zers pay for purchases. With the rise of services such as Klarna, Affirm, and Afterpay, more young Americans are engaging in buy-now, pay-later (BNPL) behavior.
In a modern twist on stores’ layaway programs, which allow consumers to claim an item and make incremental payments in order to take home that item at a later date, today’s buy-now, pay-later programs allow consumers to receive an item immediately by committing to a series of future payments.
Figure 4: Post volume comparison of various buy-now, pay-later providers; Infegy Atlas data, July through October 2023.
Figure 4 shows a stark contrast in the number of conversations surrounding BNPL services between Gen Zers and older generations. This shows that members of Gen Z are much more open to using BNPL to make purchases.
Figure 5: Gender and sentiment trends related to buy-now, pay-later services; Infegy Atlas data, July through October 2023.
A deeper dive into those using BNPL (Figure 5) shows a skew toward females (possibly due to BNPL’s integration with the fashion industry), who both discuss the topic more frequently and have a higher positive sentiment surrounding these services, with 74% positivity compared to 52% positivity among their male counterparts.
Bottom line – In order to successfully target Gen Z consumers, brands should consider boosting their online presence, especially across social media platforms where this demographic spends significant time.
Access over ownership
Another characteristic of Gen Z consumers is that they tend to value access over ownership. In other words, this generation is glad to borrow, stream, and share goods and services, rather than possess them. For example, where older generations may be interested in owning their own copy of music or a movie, Gen Z is more likely to seek access through streaming services.
Figure 6: Post volume comparison of various popular streaming services by age demographic; Infegy Atlas data, July through October 2023.
Figure 6 illustrates this access-over-ownership trend. As you can see, the younger generation is much more likely to talk about subscribing to streaming services than its older cohort.
Figure 7: Sentiment analysis regarding streaming-related keywords; Infegy Atlas data, July through October 2023.
A sentiment analysis of keywords surrounding streaming services shows overwhelming positivity regarding streaming-related topics, as illustrated in Figure 7.
Bottom line – To successfully target Gen Z consumers, brands should offer products and services that prioritize streamlined access over ownership.
A focus on sustainability
Another recurring theme among Gen Zers is a focus on making sustainable purchasing decisions. In a recent study, 62% of Gen Zers reported a preference for buying from sustainable brands, and 73% said they would be willing to pay more for sustainable products.
A great example of Gen Z’s focus on sustainability can be seen in conversations surrounding Allbirds, a footwear manufacturer committed to making shoes from sustainably sourced materials, such as sugarcane, tree fiber, and crab shells.
Figure 8: Conversation cluster analysis regarding Allbirds footwear; Infegy Atlas data, July through October 2023.
Figure 8 illustrates social media conversation surrounding Allbirds among Gen Zers. Notice the cluster surrounding words such as “emissions” and “climate.” This conversation cluster shows that Gen Zers are interested in brands that manufacture products with sustainability in mind.
Independent research further supports our finding that Gen Z is drawn to Allbirds due to its focus on sustainability, as the majority of the brand’s sales come from consumers between the age of 25 and 34.
Figure 9: Post volume analysis of conversations regarding thrifting and resale by age demographic; Infegy Atlas data, July through October 2023.
An increase in conversations among Gen Zers around resale and thrifting further reflects this generation’s commitment to sustainability (Figure 9), as this demographic is more likely than older generations to demonstrate an interest in thrifting and resale.
Figure 10: Gender and sentiment trends related to thrift and thrifting; Infegy Atlas data, July through October 2023.
A deeper dive into conversations surrounding thrifting shows that women and men are interested in different types of second-hand purchases. While women are more likely to discuss clothing, men more frequently discuss resale games and movies (Figure 10). Among both men and women, the sentiment surrounding thrifting is overwhelmingly positive across Gen Z.
Bottom line – Brands and retailers targeting the Gen Z market should consider prioritizing sustainability in order to meet this consumer group’s demands and remain competitive within this demographic.
Using social listening to understand and target the unique needs of Gen Z consumers
What does all this mean for your brand? By using social listening platforms, such as Infegy Atlas, to monitor conversations among Gen Zers, you can more effectively target the unique needs and preferences of this key audience. Ultimately, these insights can give you a leg up against the competition in developing products and services that speak to Gen Z.
Given the increasing purchasing power this audience commands, social listening insights could mean the difference between successfully tapping into the next generation of consumers or not.
To learn more about how Infegy Atlas’ social media intelligence can help your brand successfully target Gen Z, request a custom demo.