In the last few years, the marketing buzz has been all about the burgeoning, unstoppable force and buying power of the Millennials. But that’s soon changing, as Millennials are being eclipsed by Gen Z. If you’re scratching your head and starting to confuse the Gen Zs with the Gen Xs and wondering why these generational cohort definitions matter so much, hang in there. We’ll explain. Gen Z is an age group that your brands and products definitely need to have in mind. Before we break down why market research with Gen Z is so important, first, a few definitions.
Definition of Gen Z
There are varying definitions of what exactly defines the Gen Z cohort, but a more commonly agreed-upon age range is those who were born between 1997 and 2012. These are kids/young adults who grew up with smartphones and social media, and who were likely raised in households affected by the 2008 crash and subsequent recession. They were born tech-savvy, and whether or not they engage daily with tech, their demographic has been deeply affected by the changes the social media world and constant-on nature of smartphones has wrought.
Why you need to pay attention to Gen Z – whether for marketing or product development
In the last decade, marketers have had to shift their attention from, what was the biggest demographic – Baby Boomers – to the Millennials, who eclipsed the Baby Boomers in size – to now, the latest cohort with buying power: The Gen Z Generation. Gen Z now comprises 25% of the U.S. population, making them the largest age-group demographic. Additionally, they are the most diverse of all the age groups, as well as the most tech-proficient, having been essentially raised with smartphones, tablets, and social media influences.
As you might have guessed, Gen Z buying power is also quite a force to be reckoned with, and this will continue to increase as they graduate from college. However, this is also a generation that has concerns over the mounting debt-crisis of college, and they’re growing up around a Gig, sharing-economy, where many are deciding to do things such as forgo car ownership, and instead rely on services like Uber or Lyft. They don’t have the same economic opportunities as the Millennials did, but this doesn’t mean they don’t matter when it comes to their economic force.
In particular, the Gen Zs are the ones to pay attention to when it comes to how they are shaping new products, trends, and purchase habits. True, they may be more inclined to buy vintage or recycled clothes over new, expensive brands, but this doesn’t mean they don’t pull the same economic weight. In fact, because they don’t have the same means as generations older than them, they have tremendous power to inflict damage economically if brands are not paying attention to their tastes. This is where market research with Gen Z becomes particularly relevant. Here’s why.
Why market research with Gen Z is so essential
To illustrate how much brands are missing the boat by not paying attention to Gen Z, let’s look at the automobile industry, as an example.
Gen Z is the first generation to have the lowest number of drivers licenses, for those who are old enough (mostly in urban/suburban markets). Car ownership is not a primary goal, though easy ways to get around are paramount. Established, legacy brands such as GM and Ford, however, are still charging forward, making cars as usual. True, they are making big investments into autonomous vehicles and EV technologies, but overall car ownership is expected to decrease, not increase with Gen Z. In contrast, companies such as Lyft, Uber, and even Tesla, have heavily invested into market research with Gen Z and see the writing on the wall. Their shift is on making transport adaptable, on-demand, and shifting away from more car ownership to transportation flexibility. Ten years from now, this approach will start to pay off, as the larger, more traditional car companies start to see decreases in traditional car demand, in countries with large middle classes. Investors may not be pleased with more forward-thinking cut-backs and pivotal business shifts in the short-term, but long-term, this strategy will show its merit.
Market research approaches with Gen Z
Gen Z is a captivating, and actually very easy market to study. Hopefully the case is becoming clear on why they’re also an essential demographic to understand and invest research dollars into. Market research techniques such as mobile ethnographies, where Gen Z participants use an app to track their behavior over a set period of time, are one example of how we’re getting up-close-and-personal with this age group. Participants in a study are given an app with questions throughout the day to respond to. They reply with short, selfie videos, pictures of their environment, and text replies. For a generation that was essentially born with a phone in their hands, this research technique feels natural to them and we’ve found they’re far less-self-conscious sharing moments from their everyday life than older generations are. In addition to mobile ethnographies, we can also study Gen Z using social listening tools (qualitatively compiling written comments/trends across social media), and using traditional techniques such as focus groups and in-depth interviews.
We determine the appropriate methodology based on the questions we’re trying to understand and custom-design a Gen Z market research approach that gives us insights into the daily habits and preferences of this somewhat fickle and unconventional generation. These insights then guide brands in how to prepare and pivot to accommodate Gen Z preferences, both in product design, marketing strategy, and brand philosophy.
It’s not too late to start – why you need to incorporate Gen Z insights, now.
If your company has been slow to get on the Gen Z market research and insights train, that’s okay. There’s still time to start. It’s critical that your company understand this demographic’s changing tastes, and to do that, making investments in qualitative research is a sure-fire approach to success. Statistics and surveys show us (often alarmingly) how much they’re affecting brand popularity, but it doesn’t tell us why or how their tastes can change so quickly. With qualitative research, a neutral firm spends time following, having conversations with, and capturing online moments with this essential cohort. These insights can then inform teams with enough data to make confident choices on shifting strategies so that a brand can become more relevant, and not less relevant, to the Gen Z generation.