When you think of Gen Z vs Millennials, what do you think? Which group do you think is the most frugal? Which is more mindful about where they spend their...
The global pandemic has created a dramatic change in the way consumers shop, but what does your brand need to know about the youngest generations this holiday season?
The combination of economic hardship and reluctance to return to retail stores will undoubtedly play a role in holiday shopping this year, but this doesn’t mean brands should back off. On the contrary, the previous recession showed us that the companies that increased their marketing during the crisis saw almost twice sales growth compared to normal times.
A Salesforce study showed that 62 percent of consumers of all ages are doing less in-store shopping as a result of the pandemic. Not surprisingly, almost three-quarters of digitally native millennials and Gen Zs expect this behavior to continue. As the holidays approach, craft your marketing campaigns to meet Gen Z where they are—online and in local shops.
One trend we can expect to continue from last year: family comes first for younger consumers. A survey from last year’s holiday season showed that Gen Z is the generation that spends the highest percentage of their holiday budget on their parents—almost 25 percent of Gen Z said this, compared to only 12 percent of millennials. On the other hand, millennials with families focused on spending on their kids, but most of Gen Z is too young at this point to do the same.
Millennials were twice as likely to spend on their romantic partners, once again most likely because Gen Z skews so much younger. Their holiday budgets instead went to gifts for siblings and cousins. More than any other generation, 21.9 percent of Gen Z also liked to splurge on themselves while holiday shopping in 2019, but only 5.9 percent of cost-conscious millennials took this self-indulgent approach. Neither generation intended to spend on gifts for coworkers.
As for where they shopped, you may be surprised to learn that Gen Z was actually the group that did the most in-store shopping, although 76 percent are also most likely to use their phones at the same time. About one-third of millennials did the majority of holiday shopping using their mobile phones.
There’s no reason to expect last year’s gift-giving trends to change much, but what about where Gen Z and millennials will be shopping? A BCG/Snapchat report that surveyed 9,500 Gen Z participants from the US, the UK, Canada, and France indicates that both generations have readily adapted to the major shift to online shopping, and this behavior is not expected to change. According to the report:
"In many cases, Gen Z and millennial consumers have altered their behaviors and spending more dramatically than older generations have. And perhaps not surprisingly, given the impressionability of these younger consumers, they expect to stick to many of these newly developed patterns beyond the COVID-19 disruption."
For in-store purchases, there is a clear shift toward supporting small, local businesses (including through online purchasing) in the wake of the pandemic. One global report indicates that 47 percent of millennials intend to shop at small retailers this year. As for what prompts a purchase, price is the primary driver for Gen Z, with 45 percent stating it is the most important factor, followed by shopping locally.
We know about Gen Z shopping habits, in terms of who they buy for and how they shop, but what about how much they can spend this holiday season? Lockdown hit younger professionals especially hard. Gen Z is just entering the workforce, and older Gen Zs in their early 20s had their budding careers interrupted before they had a chance to take off. Older millennials are more established in their careers, but younger millennials in their 20s faced significant layoffs.
A Euromontor report indicates that younger millennials aged 26 to 29 and older Gen Zs up to age 25 will see an almost 50 percent drop in income. Budgets have already tightened to focus on the essentials. Smaller budgets for both generations mean younger consumers will be on the lookout for deals this year as they start gift hunting for friends and family.
Both groups of these savvy shoppers focus on value. They also gravitate to brands that emphasize health and wellness, create a user-friendly online shopping experience, and show what they’re doing to help during these trying times. In addition to having an authentic presence that resonates with Gen Z values, offer incentives such as:
Gen Z shopping habits are evolving rapidly, especially in the face of a global crisis. Is your brand keeping up? The UNiDAYS platform can help by showcasing your brand to Gen Z shoppers who want to stay connected to brands online. Just create an account, set up your brand page, and add your holiday deals to attract and engage new Gen Z customers.
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