Marketers, researchers, and brands alike continually search for consumers to better understand their habits and preferences. Move over Millennials because marketers, researchers, and brands have an eye on Generation Z (Gen Z).
Gen Z is the generation that succeeds Millennials and depending on the source, the age of individuals varies. Generally, individuals who have been born in 1995 or later are considered Gen Z. Some researchers suggest the generation ends between 2007 and 2010. To complicate matters, there are Zillennials, which is a micro-generation or transitional generation born between 1993 and 1998. Urban Dictionary describes Zillennials as “too young to relate to the core of millennials, but too old to relate to the core of Generation Z.” The generation after Z is dubbed Generation Alpha.
Regardless of the age parameters, according to Bank of America’s research, Gen Z* currently earns $7 trillion across its 2.5 billion-person cohort, worldwide. By 2025, that income will grow to $17 trillion, and by 2030, it will reach $33 trillion, representing 27% of the world’s income and surpassing that of millennials the following year. Gen Z contributes approximately $830 billion to US retail sales annually and represents an influential consumer group where wallet size and allocation provide a proxy for category interest, according to Piper Sandler.
Secondary data research as well as current examples of consumer products such as beauty, personal care, food, and beverage, which cater to this demographic, provide a glimpse into Gen Z’s behavior and brand expectations.
What Does Gen Z Expect From Brands?
Gen Z are digital natives with high expectations of brands. Brands that reflect their personal values, which include social and political issues, such as the environment and diversity are top priorities. Below are several noteworthy insights from a variety of sources.
According to Wunderman Thompson’s “Generation Z: Building a Better Normal” trend report of 1,000 US 16-24 year-olds:
- 85% of gen Z’ers believe brands should be about something more than profit
- 60% agree that their choice in brands is an expression of who they are
- 73% want a brand that understands them
Swedish bank Klarna surveyed 15,000 US Millennials and Gen Z beauty shoppers and found that diversity is the most important brand value that impacts purchasing decisions.
- 40% of Millennials and 31% of Gen Z customers will have a higher regard for a brand if it’s inclusive
Kyra’s “Gen Z State of Beauty Report” surveyed 3,500 respondents ages 13-25 and found:
- For online beauty information overall, Gen Z turns to YouTube first, followed by TikTok and then Instagram
- Online reviews were cited as the main influence for purchase decisions, followed by influencer tutorials in second and friends and family in third place
- 53% of respondents said they would stop using a brand that tested on animals, while 50% said they would not purchase a brand if it is not certified as cruelty-free
GlobalWebIndex’s (GWI) “The Kids These Days” report researched behaviors and beliefs of more than 15,000 kids globally aged 8-15 and discovered:
- The 12-15 age group are already making digital purchases, 15% of this group have shopped online in the last week. A quarter among those have a bank account they can access
- A third of teens turn to social media to engage with their favorite brands and prefer funny posts and memes
- 44% say that caring for the planet matters to them, which GWI has labeled the “Greta Generation”
- 15% of 12-15 year-olds are interested in vegan or vegetarian food, with 22% saying they choose what they eat
Piper Sandler’s recent survey of 7,000 US teens on their spending habits and priorities revealed:
- Spending has increased despite the pandemic with a self-reported figure of $2,165 in discretionary spend per person
- Snapchat remains the favorite social media platform (31%), followed closely by TikTok (30%) and Instagram (24%)
- TikTok influencers have “significantly reshaped skincare brand preferences” and 86% of females “use online influencers as a source of discovery for beauty brands and trends”
- Food returns as teens’ No. 1 wallet priority at 23% share up from 21% in Fall 2020
The 2020 State of Gen Z® consumer research study by Center for Generational Kinetics reported:
- 56% of Gen Z are more likely to try a product or service if their favorite online influencer recommends it
- 68% of Gen Z normally look at delivery times and options before completing an online purchase
- Gen Z most respect a company more that supports the causes of racial equality and ending poverty and homelessness
Beauty & Personal Care Products Target Gen Z
As addressed in Oh, Baby & Kids The Clean Products You Will Use trend article, teens and young adults have their own specific needs and brands are taking notice. Brands are creating beauty and personal care products that target Gen Z with a focus on mental health, well-being and diversity.
According to American Psychological Association, 91% of Gen Z suffers from anxiety. Procter & Gamble (P&G) introduced Quiet & Roar, a line of body washes, scrubs and lotions developed to support Gen Z’s mental health and “help free your mind and engage your senses.” The line includes Awaken (peach and green tea), Relax (lavender and spirulina), Renew (lemon blossom and mint), Revive (pineapple and kiwiberry), and Soothe (coconut and banana milk). Bubble, the direct-to-consumer skincare brand, moves to retail and will be sold exclusively at Walmart. The gender-neutral product range is tested by people ages 14 to 24 years old and is formulated with natural ingredients and skin-safe synthetics. Walmart will offer Slam Dunk Hydrating Moisturizer, Fresh Start Gel Cleanser, Level Up Balancing Moisturizer, Bounce Back Refreshing Toner, Break Even Balancing Toner, Wipe Out Makeup Remover, and the Come Clean Detoxifying Clay Mask products. In addition, Bubble donates 1% of its proceeds to nonprofits supporting young people with mental health issues.
Unilever and Sundial debuted Emerge, a new US-based Gen Z-focused textured hair care brand sold exclusively at Target. The six SKU line includes shampoo, conditioner, leave-in conditioner, styling gel, moisturizing butter cream, and a hair mask. The products are free from sulfates, parabens, phthalates, silicones, mineral oil, petrolatum, and dyes and are infused with pequi oil and almond milk.
Pop Culture Limited-Edition Collaborations
Pop culture with a focus on entertainment is an inspiration and a muse for new product launches, many of which are makeup and cereal.
On the beauty side, Makeup Revolution x Bratz collection is a fun collaboration based on the Bratz dolls from 2001. Earlier this year, Reeses + HipDot launched a sweet limited-edition collection and recently HipDot joined forces with Paramount on the Clueless collection based on the 1990’s cult teen movie. Similarly, Warner Bros. partnered on the Powerpuff Girls x ColourPop limited-edition collection as well as The Smashbox x The Suicide Squad collection. Dr. Squatch introduced a Star Wars Collection of four soaps: Dark Side Scrub (chokeberry sand and coconut charcoal), Only Hope Soap (thyme leaf and bentonite clay), Ruthless Rinse (dragon fruit and black sand), and Wisdom Wash (lotus leaf). The soaps are sustainably sourced and formulated with cold processed natural oils. To capture a younger audience, Dior collaborated with social media app Zepeto, on a virtual beauty space where users can create 3D avatars of themselves in nine different looks.
On the food and beverage side, General Mills has been busy partnering on limited-edition cereal flavors. The Jojo Siwa Strawberry Bop cereal includes “strawberry flavored cereal puffs and JoJo-themed marshmallows including yellow and white stars, pink bows, and blue hearts.” The limited-edition Space Jam: A New Legacy cereal is described as “a berry flavored cereal with bunny and basketball marshmallows.” In honor of Disney+’s Loki Series premier, General Mills and Marvel teamed up on the limited-edition Loki Charms cereal. There were only 3,500 boxes available and sold out within minutes of launching. To bring back its limited-edition Lemonade flavor and introduce a new Raspberry Lemonade beverage, SunnyD partnered with musician Johnny Orlando on the Sweetest Summer Yet TikTok Hashtag Challenge and Contest. To participate, fans created a 15 to 45 second video on TikTok showing how they are going to make this summer the sweetest one ever using the #SunnyandSweet hashtag. The winner was granted access to a private virtual concert with Orlando. Earlier in the year, Taco Bell opened a new location in Times Square. However, unlike the chain’s other restaurants, it’s all contactless with digital-only ordering online or at a touchscreen kiosk and pick-up from a secure food locker. For fans who aren’t local, Taco Bell created a dynamic 3D virtual map of the restaurant. A notable development to capture a new workforce is TikTok’s pilot program for users to apply for jobs using the hashtag #TikTokResumes. Abercrombie & Fitch, Chipotle, Target, and Shopify are a few of the several brands participating.
The Gen Z demographic has many facets. Like other generations, one size does not fit all. Gen Z are digitally savvy. Watch as brands get creative and reach them through social media platforms, fun pop culture collaborations, and limited-edition products.
*The report defines Gen Z as those born between 1996 and 2016