Although still not fully into their twenties, Generation Z is already a spending powerhouse responsible for $44 billion worth of expenditures each year. And, according to new research from payments platform provider Adyen, the “digitally native” Generation Z is immersed in social media, influenced by Facebook ads and are heavy users of instant messaging as well as chat bots.
The survey of consumers also revealed Generation Z relies on money from Mom and Dad, but a large percentage is already in the workforce. The survey found that 59 percent of Generation Z respondents “count on an allowance for their spending money” while 20 percent said they work full-time.
“Born between the mid-1990s and mid-2000s, the oldest Gen Zer is around 22 years old,” researchers at Adyen said in the report. “That defines this up-and-coming generation as today’s teenagers, with a firm grip on future purchasing power. But that doesn’t mean Gen Zers aren’t influencing consumer spending today. At 32 percent, Gen Z makes up the second-largest age demographic of tastemakers.”
These Gen Z “tastemakers” are plugged into social media, said Roelant Prins, chief commercial officer at Adyen who told WWD that the results of the survey “supports and backs up the trends being seen in the market today.”
Prins noted that Generation Z is a demographic cohort that was born in the “digital age” and are faithful followers of Facebook, YouTube and Instagram and are heavy users of messaging apps. “Half of Generation Z are on messaging,” he said. “It’s their primary way of communicating. But many brands are not meeting them there. Companies are still behind in this area.”
With social media, the survey found that 41 percent of Generation Z respondents have been influenced by Facebook ads and 30 percent have been influenced by YouTube videos. And 26 percent of them said they have been influenced by Instagram.
“They know the Internet only as a high-speed connection and never had to endure dial-up modems; their idea of a phone has always been mobile,” authors of the report noted. “As they have come of age in this connected world, 3 out of 4 Gen Zers spend most of their free time online, and to many, social media is deeply engrained in everyday life.”
This digital connectedness also transfers to their expectations when shopping. The poll found that 66 percent of Generation Z respondents “would visit a store more if they could check item availability beforehand.” And 46 percent of them said they use chat apps to communicate with brands. The research also found Generation Z to want shopping experiences that involve augmented and virtual reality as well as “web showrooms formats where they shop in a store and items are shipped to them later.
“As the future power shopper, Gen Z brings a new expectation for the retail experience,” Adyen researchers said. “They expect retailers to demonstrate that they’re trustworthy. And it pays to gain their trust now for brand loyalty in the future. Similar to Millennials, Gen Zers also want to be heard.”
The report found that 60 percent of Generation Z “think it’s important for brands to value their opinion, and when they do give feedback, they are twice as likely to provide positive feedback than complaints.” Adyen noted that about half of Generation Z respondents “also expect high-quality, eco-friendly and socially responsible products.”
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