Business Insider published an article this summer about industries and brands who are at risk because they’re losing ground with Generation Z compared to their Millennial customer base. At YouthBeat, our data generally supports their conclusions that many brands are starting to lose ground with Gen Z consumers due to their focus on millennials. And we’ve got a solid theory about why. Every generation likes to forge their own path in discovering brands that they feel, when they’re young, match the needs that their parents’ brands are too stale to address. It’s part of building independence—exploration and early adoption.
Millennials broke the mold adopting new brands that technology made available; registering for “The” Facebook as college students, signing up for Pandora, and embracing other first-to-market new media services like MySpace. In the world of shopping, they flocked to Abercrombie & Fitch, and later, to fast-fashion pioneer H&M. They were willing to spend money on brands that connoted affluence, and that everyone else in their peer group used.
Generation Z is no exception to this quest for their own brands that meet their not-so-subtle different needs. This generation was fully aware of the Great Recession as it unfolded, perhaps watching parents lose jobs and even homes. Plus, they saw older siblings suffer backlash from their public social posts (getting in trouble for posting images of partying when they should have been studying or being cyberbullied for a publicly-posted opinion). What does all that mean? Generation Z is much more money-savvy and private than their Millennial counterparts. And that impacts the brands they use, including their social media and retail preferences.
Just this week, Commonsense Media released an infographic about the social media habits of Generation Z. Their data focused on the emotional impact of social media on teens. At YouthBeat, our questionnaire is a little different, but we concur that Instagram (63% of teens with an account) and Snapchat (61% of teens with an account*) are far more relevant to this generation than Facebook was to Millennials. For Snapchat in particular, teens are more interested in sending amusing filtered photos and videos to friends they know in the tangible space (and maintaining their streaks) than making public posts on another media and possibly attracting trolls.
In terms of shopping, the Business Insider article called out that Generation Z is less likely than Millennials to be shopping department stores, and more likely to be engaging directly with brands online, in search of the best deals. Our data support that too. Amazon is now teens’ favorite place to shop overall—above any brick + mortar store. Old Navy is one of their Top 5 brands of clothing, while Abercrombie & Fitch is absent (Hollister, an A&F brand, is just below Old Navy).* Stay tuned, though, as A&F has a new CEO as of last year, and is overhauling its retail to appeal to younger consumers.
Successful brands are the ones who meet the changing needs of each generation, based on a deep understanding of what drives those needs—beyond life stage. At YouthBeat, we’ve declared Generation Z “so over,” because Generation Alpha, born 2010-present, are the ones to focus on now for a solid longer-term strategy. Reach out to us for our Generational Spotlight infographic for a head start.
*Source: YouthBeat® Jan-June 2018