Difference between the Millennials and Gen Z in terms of marketing and consumer behavior
For marketers, one crucial step in marketing is defining their target audience or customer demographics. Understanding your audience is critical to creating great marketing strategies and winning amid a high competition level in the global market. The demographic composition of the global population has changed a lot. In the US, too, demographic changes have required marketers to alter their marketing strategies to suit modern generations' needs. The pandemic has also brought some changes that are going to have a lasting impact on businesses. The pandemic has particularly shaped consumer behavior in new ways as more and more millennials and Gen Z is shopping online. These changes will remain for some time until the impact of the pandemic is ultimately brought under control.
Marketers need to understand the differences between the consumer behavior of two key customer demographics including the Millennials and Gen Z, currently the two most important customer segments for them. Apart from some differences in their buying decision-making process, the taste of these two generations also differs. These differences matter for marketers who want to target the two customer segments more efficiently.
Millennials versus Gen Zers
According to Pew Research Center, Millennials are the people born between 1981 and 1996. The Gen Zers are the people born after 1996 (1997 to 2012). Millennials fall in the age range of 25 and 40 in 2021 whereas Gen Zers fall in the age range of 9 and 24.
While both are young generations, they differ substantially in the way they interact with brands, their shopping habits, and how they think of money.
The focus of Millennials is higher on customer experience
Millennials tend to focus higher on the customer experience. For a large part of this demographic segment, the experience that a company offers matters just as much as its products and services.
According to research carried out by the popular CRM platform, Salesforce, in April 2019, 66% of millennials have higher expectations from businesses in terms of customer experience compared to 53% of Gen Zers. In the same survey, 76% of Millennials said they were willing to pay more for a superior customer experience as compared to 71% of Gen Zers.
Gen Z wants higher innovation
When compared to millennials, the Gen Zers are more likely to expect faster innovation from the companies they purchase from. Since the pandemic, they are also more likely than the millennials to want new products and services. According to the research by Salesforce, 55% of Gen Zers were more likely to want new products and services compared to the Millennials. They are also more likely than millennials to want digital experiences. According to the same research, 76% of the Gen zers were more likely to want the companies to translate their existing products and services into digital experiences.
The most likely reason behind the Gen Zers wanting more innovation from companies is because they have grown up in an era marked by rapid innovation. The era they grew up in is an overwhelmingly mobile era when the mobile computing technology proliferated and they grew up watching YouTube, TikTok and Netflix. This era is also marked by rapid digital transformation and the growth of cloud technology. As a result of these factors, the Gen Zers are more likely to expect and accept rapid innovation.
Gen Z trusts companies less.
Millennials tend to trust companies more than Gen Zers who are less likely to trust a company easily. According to research carried out by Salesforce in 2020, while 50% of millennials tend to trust companies only 42% of the millennials tend to do so. However, their trust has also decreased significantly since 2018 (both millennials and Gen Zers trust companies less than they did in 2018). The report by Salesforce also highlights what the two generations think of how companies are using their personal information. According to the report, 59% of Gen Zers and 57% of millennials think that they have lost control over how companies are using their personal data. The latest data shows that the trust of these two generations in companies has been declining. Apart from that, Gen Z is less trusting compared to the millennials and there is not much that companies can do to earn their trust back.
Gen Z grew up during a recessionary period:
While marketing to Gen Z, it is also worth considering the period in which they grew up. Gen Z’s childhood was shaped by the economic pressures of the recession. It was a time when their parents and their communities were struggling with financial pressures and unemployment. While marketing to Gen Z, it is important to consider these factors and focus on long-term value and smart investments. The difficulties during their childhood had affected their decision making.
Gen Z focuses on saving money:
The focus of Gen Z is on saving money more than the millennials did when they were kof the same age. Millennials are more interested in the entire experience rather than just buying the product. On the other hand, the millennials will only make purchases that maximize the value of every dollar.
Gen Zers are conservative spenders. It is the result of their growing up during a period of economic turmoil. So, they are not attracted to conspicuous consumption. They are more interested in saving money and fear that their money might run out. However, they love deals and bonuses. So, when marketing to Gen Z, it is a good strategy to emphasize high-quality investments and offers lots of deals and freebies.
Gen Zers love brands that mirror their ideals:
Authenticity is also a key concern for Gen Zers, even more than the millennials. In the Salesforce survey, while 61% of millennials thought that companies were generally authentic, only 53% of Gen Zers thought so. It is why brands need to be authentic at every stage. Millennials liked the brands that championed transparency and shared their values. Compared to the millennials, the Gen Zers are even more obsessed with brands that mirror their ideals. It also applies to the type of promotional material that companies use when promoting before a Gen Z audience. The type of imagery that works with the millennials will not work with Gen Z in every case. Understanding Gen Z’s taste and what appeals to it is critical for brands promoting their products to this audience.
For example, Gen Zers love the Dove’s beauty campaigns featurign real women. They love to see content that presents diversity in terms of color, shape and size. They can easily identify overpolished content. They want authenticity and content that is attainable instead of being over polished. Influencer marketing works in the case of the Gen Z audience. You must try reaching out to influencers or trendsetters that this generation trusts and respects.
Gen Z could return to instore shopping
Online shopping is a convenience for the millennials they do not like to miss. They would exploit it at every turn whenever they have a chance. They have watched the world move from the internet to 5G internet. So, whenever they have a chance, they will just pull out their smartphones or laptop and order something online. Due to the pandemic, both the generations are shopping more online. The pandemic has brought some lasting changes to people’s buying behavior and the trends are expected to continue even after the pandemic. What is the difference between the impact on Millennials’ and Gen Zers’ consumer behavior. While 67% of millennials believe they will continue to shop online even after the pandemic, only 61% of Gen Zers think so. The Gen Zers are expected to return to the stores faster than the millennials. Once the physical stores have opened and the economy is flourishing again, Gen Zers might get back to the stores faster than the millennials for shopping.
Store owners need to think about how they can attract more teens to their stores after the pandemic. They need to create experiences that are worth sharing on social media to attract and retain the Gen Zers. Gen Z will obviously be more eager for unique experiences like exercise classes in an athleisure apparel store.
Gen Z is more independent and less bound by brands
Brand names used to be all the rage at the time that the millennials were in schools and colleges. Now that the millennials have grown adults, they are still more willing to pay for their referred fashion labels. They feel a stronger brand connection as compared to the Gen Zers. 60% of millennials feel emotionally connected to brands compared to only 57% Gen Zers.
Gen Z on the other hand is more fiercely independent. It is not defined by any single brand. They love to celebrate their independence. They search on social media to find communities where they feel they belong. So, in the case of Gen Z the regular approach will not work. You need to celebrate the individual rather than prescribe a specific or narrow image. You can let them be whoever they are or whatever they want to be.