IRI research suggests it may be time to reckon with Gen Z.
Millennials are a focus of many observers in business and beyond. Baby Boomers need constant attention given their continuing spending power. Gen X sometimes gets lost in between, but most thoughtful observers understand that they are at the earnings peak and have weight in those trends that interest them.
Gen Z has stood just offstage in the marketplace, but it’s stepping out and will be significant. Already, some retailers and vendors are exploring non-gender fashions specifically for their appeal to Gen Z, a group that has expressed some skepticism about gender roles. Brands such as IJJI and Olderbrother have emerged to serve the market for fashions that are less gender specific than has been typical. In IRI research breaking down gender barriers is a stronger factor in brand relevance, cited by 35%, than any other demographic.
IRI notes that the oldest members of Gen Z are just graduating from college, while its youngest members are still in grade school. The group already accounts for 20% of all U.S. consumers, with an estimated direct buying power of $143 billion. On the international front, they represent about 32% of the global population.
Gen Z is digitally native and was born into a world of seismic social change on the economic, political and social fronts. IRI pointed out that, critically, Gen Z sees itself as having a responsibility to use its power for good. As a group, Gen Z focuses on diversity. It also is experiential in that it embraces discovery in play. It is digital and connective, but it isn’t exclusionary.
As IRI points out, the most likely way Gen Z consumers learn about a product that they wind up wanting to buy, at 59%, is a recommendation from family or friends, next being seeing family or friends use a product. Third, however, is from watching TikTok videos, at 39%. TikTock videos are more influential than in-store displays, 38%, television advertising, 31%, or Instagram ads or the social media channel’s influencer posts, 23% and 22%. In an interesting note, IRI research indicates that having a product feature in an in-store circular or ad, 21%, is more influential than Facebook ad, 19%, digital ad on a website, 19%, print/magazine ad, 14%, Twitter ad, 11%, or Facebook influencer post, 9%.
Although not yet a big purchaser of housewares and home furnishings, Gen Z is noteworthy in that women in the demographic stated that they purchased personal care products, at 74%, in the preceding three months, more often than clothing/accessories, 71% and just after food at 84%.
Still, individuality and sustainability are critical for Gen Z. Beyond taste and price, 38% of Gen Zers say they take sustainability into consideration when purchasing product such as food and beverages, with 34% saying they think about how a brand understands what they need. “Feels authentic” is the next factor under review at 24%.
