Generation Z Are Not The Same As Millennials

The retail experience has changed. To stay relevant, brands must adapt their marketing efforts. Both the change itself, as well as the pace of it, is driven by the expectations of each subsequent generation. None more so than Millennials and Generation Z.

At UNiDAYS, student marketing is our expertise. Working with our 8.5 million student members we’ve gained insights into their lives — specifically when, where and how they shop. Through this research, we’ve found that students spending habits differ from Millennials, as they are often spending more money than brands think.

Generation Z, those born post 1995 (although the exact year varies by opinion) currently makeup 25.9% of the US population and contributes $44 billion to the American economy. By 2020, they will account for one-third of US population, so it is imperative that brands pay attention to this generation or else they could be the next retail casualty.

Today, brands are focusing on Millennials, but the truth is that Generation Z, and specifically the college student population, is where their focus needs to be. But there are fundamental differences between these life stages that brands must know to adapt their marketing strategies.

1. They’re in college and not the workforce.

There are many debates about the birth years of Generation Z and Millennials. But most can agree that the Gen Z generation is the direct cohort of Millennials. Millennials are one of the last generations to know what life was like without the internet, whereas Gen Z was born with a mobile device in their hand.

Another difference between these two generations is that Millennials are 2 to 3 years into their careers and Gen Z are in the thick of their college years. The college years are a time in a person’s life where they move from parent dependent to independent life, thus forming lifelong affinities with brands and services.

By engaging with a student at this point in their lives, not only can brands get in early, but they have an opportunity to gain a customer for life.

2. They have more money than Millennials.

Millennials entered adulthood in a time of recession and a crappy job market. Thus they are likely to spend less on items that aren’t necessities. Because Gen Z saw the hardship Millennials experienced, their spending behaviors have changed too. While they are more likely to spend their cash on dining out, apparel and entertainment, 75% of students today say they use a coupon when they shop.

Gen Z typically has an average monthly income of about $1,200, 40% of which is discretionary — whereas Millennials’ discretionary spend is around 20%. Students living expenses (rent, utilities, groceries) are less than Millennials, therefore they don’t mind spending frivolously.

Gen Zers are ready to try products, want to form relationships with brands and then share their experiences with their friends. Major retailers should consider offering a student discount program to gain this audience as their new customers, influence repeat purchases and boost their overall revenue — everything a brand needs to do to survive in this changing retail landscape.

3. They are more entrepreneurial.

Think about it; this generation was born right when Mark Zuckerberg was founding Facebook. They’ve grown up watching TV shows and movies like Silicon Valley and The Social Network. These shows display what it’s like to work for yourself and profess that with a lot of hard work and a great idea, your business could be the next Unicorn. I don’t recall a film or show in the late 80’s early 90’s entitled Rise of Microsoft, do you?

Gen Z has seen what someone can accomplish at a very young age, and they are thirsty to educate themselves as quickly as possible. They desire an independent work environment, one where they have flexible hours or they are their own boss, and hope to gain that early in their careers. In fact, 72% of students say they’d like to start their own business someday with 61% expecting to start one right out of college.

4. They love authenticity.

Gen Z can tell when a brand isn’t being human or does something contradictory. When this occurs they question their loyalty to that brand. They view brands and services, much like a relationship, and if they stop feeling appreciated then they move on.

They also expect brands to be more ‘real.’ The younger generation today is more accepting of natural beauty and doesn’t adhere to traditional marketing images of the past. They have high expectations that brands must display a more realistic portrayal of life inclusive of everyone.

Gen Z also expects to receive great customer experience, be it online or in store. When deciding to make a purchase, it’s about more than just the product. Gen Zers want a full shopping experience, something tangible, often preferring to shop in a store where they can touch products. They want to share these experiences with their friends — positive or negative. Retailers who can deliver distinct experiences will be most loved and favored by Gen Z.

5. They are always connected.

Think Millennials are social media obsessed? Well, Gen Z takes it to a whole new level. According to a study conducted by CNN, this generation spends about 9 hours a day using social media — checking their accounts over 100 times. And this data doesn’t count the media consumed while completing assignments.

The most cited reasons why they are always connected were that they enjoyed the satisfaction of receiving likes and comments on their posts and they worried about ‘FOMO,’ the fear of missing out on events or activities that friends may be doing without them.

This generation will continue to define the social media landscape, so brands must keep their finger on the pulse of shifting expectations of Gen Z. Understanding which social media channel they utilize the most and the language they use on each channel is crucial. Brands should provide platform-tailored content that is genuine, engaging and inspires a younger audience.

Whether generation categorization is legitimate or, another marketing trick is unknown, but it’s hard to deny that the way we shop and consume media changes with our life stages. As we enter and exit certain phases of life, our demands and needs evolve. Brands must adapt, or they will be yet another casualty amongst the list of fallen giants.

Here at UNiDAYS, we believe that brands must find new customers, and the best source of customers of the future are the students of today.

Gen Z is one to watch, and we hope you’ll follow us along our journey to provide brands access to this hard to reach generation. This article originally appeared here and you can learn more about UNiDAYS by visiting our website at corporate.myunidays.com.