When creating new food and beverage products, it is important for manufacturers to look to the future, and Generation Z is the future. The question isn’t even, «Why does Generation Z matter as a consumer?» Rather, “What does Generation Z want?” Gathered important insights about zoomers to give manufacturers and distributors a deeper understanding of this powerful demographic.
In the spotlight
The Gen-Zs are often talked about. Psychologists talk about who zoomers are, how to communicate with them and gain their trust. Sociologists dedicate research to them, bloggers chase them for interviews. They are talked about at scientific and practical conferences, marketers and HR departments of companies are fighting for their attention.
At the same time, information about modern representatives of Generation Z is sometimes contradictory. Some researchers generally believe that the theory of generations, measured at intervals of 15-20 years, is doubtful and uncertain. Theories of generational models, actively used in sociology, futurology and business, are periodically subjected to harsh criticism.
However, this uncertainty instantly disappears, it is hardly possible to trace the general key phenomena that affect people of a certain age. Product managers have long learned to successfully take into account the basic principles of generational cycles by William Strauss and Neil Howe (the most famous and widely used theory of generations), resulting in hundreds of products and services that we all have long been accustomed to.
It is simply impossible not to take into account the Zetas, Zoomers, Centennials — everyone who was born after 2005 (according to Strauss-Howe). Their life expectancy is growing and without their participation it is already quite difficult to imagine the development of many modern markets.
According to IRI research under the sonorous name “Generation Z”, in the US alone, this category accounts for 20% of consumers with an estimated purchasing power of $143 billion. This consumer audience cannot be ignored! However, it must be approached with care and caution.
Z-opinions
To help manufacturers create products that Gen Z loves, research institutes such as IRI, McKinsey, Mintel, KAM, Deloitte, FMI, Symrise, and dozens of others are conducting a comprehensive analysis of the opinions and views of this generation of consumers.
Such work is being done to identify the buying habits of consumers born in the early 2000s, to make their motives understandable to marketing directors, production technologists and management of food and beverage companies. As a result, this can help the latter achieve great success in their segments.
It may seem strange to some to focus on the younger generation, many of whom do not even have a job. However, various studies show that this untapped market has significant purchasing power and preferences. And its representatives are especially interested in finding new opportunities to purchase goods and services.
One of the important insights: the purchasing power of zoomers is becoming greater than that of millennials. It is surprising, but, for example, in the UK, young people from this generation are able to bring in $44 billion to the economy. For comparison, this is about the same as the entire snack market.
Zeto-economy
How is this possible? The younger members of this cohort are still in their teens, while the older ones are just finishing school and starting their careers.
Increasingly, teenagers are starting to earn money for their purchases on their own from the school, clearing driveways or caring for the neighbor’s cat. And, in general, Generation Z is growing up more thrifty and rational in financial matters.
Their content is increasing. Teenagers receive, on average, about $16 a week from their parents for personal expenses. Some seniors often plan a life with more limited overhead! As the teens mature and enter the job market, moving up the career ladder, the zetas are expected to play an increasingly important role in the food and beverage industry.
And they are not like their predecessors.
The most important takeaway about Generation Z is that they are a completely different type of buyer. They are true digital natives, always in touch, and they are comfortable on the Internet and social networks. They spend more time under the supervision of their parents and are in no hurry to move out from them, they are homebodies and meet friends less. They go on dates less often, behave more consciously in relationships and approach the institution of marriage cautiously.
The Zetas are more likely to suffer from anxiety and depression. The latter, to a large extent, is provoked by a large amount of time spent on the network. In addition, the fact of the negative impact of bright light from screens on falling asleep is known — as a result, the younger generation suffers from insomnia more often and, in general, does not get enough sleep.
Interestingly, even teenagers themselves are aware of their addiction: 60% of Pew survey respondents aged 13-17 indicated that they spend too much time with their phone in their hands, with nine out of ten respondents citing this as a serious problem.
Zoomers pay more attention to health, are less likely to smoke and drink alcohol. Nearly two-thirds of teens and young adults use mobile health apps, according to a study by the nonprofit Hope Lab and the Well Being Trust.
Despite external infantilism, they begin to think about a career earlier — it is very important for them to find an opportunity for self-realization. And much better than their predecessors, they understand fashion trends, being active consumers of «smart» products that make life easier. It remains to find where the «Buy» button in their heads.
Gen Z shopping habits
We recommend that you read more carefully. Some of the early claims about the buying behavior of buzzers have been heavily modified. The information below will help to better understand the younger generation of buyers.
Just because the Zetas feel comfortable with an omnichannel digital platform doesn’t mean they don’t want more traditional ways to shop. They prefer a mix of digital and physical experiences. They are fascinated by technology but enjoy shopping in person.
Buying for Generation Z is often a two-part process that requires a strategy for any food and beverage business that targets this demographic.
Generation Z shopping habits usually start online. They research and discover future purchases either through web browsing or through social media. They have been following brands for a while, participating in peer-to-peer campaigns. And then they make most of their purchases in a regular store. This is especially true for Generation Z women. This is where shopping habits stand out.
Purchases in brick-and-mortar stores produce (Symrise survey data):
— 62% of Generation Z
— 50% Millennials
— 60% of all other generations
Cause? Generation Z has a lower rate of credit card ownership than older consumers. Instead of focusing on the ease of online ordering and shipping, zoomers are predisposed to choosing authentic items made by unique brands. When it comes to marketing, create an ecommerce strategy that will drive in-store traffic.
One way to do this is to use modern digital platforms like Tik-Tok, Twitch, and other video streaming services, especially video games. The latter have the highest engagement rate among Generation Z. Consider: 64% of teenage boys aged 13 to 17 watch and play gaming content like Fortnite. These new platforms offer significant opportunities to deepen the brand’s connection to this generation.
Marketing Tips for Generation Z Consumers
Wondering what we mean when we say Generation Z is always connected? Studies show that 74% of this demographic spend five or more hours a day every day on the Internet. During this time, 46% explore the products they want to purchase on their mobile devices.
When they think about buying something, 63% prefer to get their information not from direct advertising, but through recommendations from both real people and celebrities.
But don’t expect them to be patient as they collect information on everything from shoes to drinks. 60% of Gen Z buyers will not use apps or websites that are slow to load or difficult to navigate. Most will also hang up if not answered within 45 seconds.
Along with the right technology, marketers also need to make sure they’re telling the right story for their product or service.
Brands should:
— Make the world a better place
— Take into account political opinions and environmental protection
— stay positive
— Respect activists
— Focus on realism and authenticity
— Do not forget about the price
And — most importantly — loyalty to ideas, not brands!
This generation is looking for the truth. Bright representatives of Gen Z value individual expression and avoid clichés. They deeply believe in the effectiveness of dialogue to resolve conflicts and improve the world. Finally, they make decisions and treat various institutions in a highly pragmatic way.
This behavior influences how zoomers view their relationship with brands. Companies should consider three implications for this generation:
- Consumption as access, not possession
- Consumption as an expression of individual identity
- Consumption as a matter
And brands need to rethink how they deliver value to young consumers.
Centennials’ main motive for consumption is the search for truth, both in private and in public form. They feel comfortable only in one case — to be themselves. A massive rebalancing, personalization versus mass production, and — more than ever — the brand’s unquestioning adherence to what it preaches, especially in matters of work ethics and marketing.
As food and beverage companies become aware of Gen Z’s taste preferences, remember that members of this demographic don’t like being boxed in. Even newfangled gender-neutral marketing has little effect on their purchasing preferences.
35% of Zoomers say removing gender barriers is important for brands (against 33% of millennials), but at the same time, only 3% consider gender-neutral marketing an important feature when deciding which food/drink brand to buy. The main ones are the taste of the product and its price. (Data from the IRI study).
It can be said that for generation Z it is absolutely unimportant that a brand is positioned as masculine, feminine or gender-neutral — it should be simple, understandable and authentic.
And if you miss, they’ll let you know. 34% of Gen Z youths made fun of brands last year for political reasons, compared to 26% of Millennials.
It is also a mistake to think that they are brand loyal. They certainly tend to believe that brands help shape the world, but only 50% are loyal to a particular brand (in adults, 61% say they are brand loyal).
According to Brand Intelligence, Morning Consult’s flagship brand tracking program, Gen Z’s most loved food brands are:
— Oreo
— Doritos
— Chick-fil-A
— Pizza Hut
— Dunkin’
— Skittles
— Subway
— IHOP
Doritos offers Generation Z flavors. In the manufacturer’s marketing strategy, communication with the Zetas plays an important role: the company has removed its logo from packaging to attract young Z-shoppers who do not like advertising. Instead, the brand offered snack lovers augmented reality Snapchat Lens to transform their faces into the triangular shape of the popular snack.
Bottom Line: Price and Inclusion
Whether or not a marketer is designing for Generation Z, it’s important to focus on price and inclusion to attract the younger generation. Goods and services should be available to everyone who is interested in buying.
For example, Target is introducing three new apparel and tech brands. The lines are highly differentiated in price, but relatively inexpensive in order to attract as many teenagers as possible.
To succeed with Generation Z, brands must leverage social media, direct marketing, digital content, and in-store experiences. Keeping up with global trends such as veganism, sustainability and “entertain instead of sell” will help companies build purchasing power in the future.