We all know the saying: “Money makes the world go ‘round.” That’s why consumers’ attitudes toward money is something that all brands need to account for and factor into their marketing strategies. However, consumer outlooks can vary widely across different demographics–especially when it comes to the newest generation of consumers.
Meet Gen Z. They were born 1995 or later, are 2 billion strong worldwide, comprise about 26% of the U.S. population, have $44 billion in purchasing power, and are the most ethnically and racially diverse generation in U.S. history. They’ve grown up in an all-digital world, and they want brands to know how they think about money.
C Space, a global customer collaboration consultancy, invited a group of 27 Gen Zers, ages 13 to 20, and six executives from the banking, retail, electronics, and apparel industries to participate in a full-day interactive session, “Gen Z and the Future of Money.” It was out of this session that it became evident that Gen Zers have a contradictory relationship with money.
To them, money not only represents freedom and independence but also recklessness and uncertainty. Why? Consider this: Gen Zers’ formative years intersected with 2008’s global depression. Many saw parents lose jobs, college funds disappear, older Millennial siblings forced to move back home post-college, and they were possibly directly affected by harsher financial realities. They know financial situations can change radically at the drop of a hat.
At the same time, they’ve only experienced an on-demand digital world where money is more abstract than tangible. “If you use a credit card, you’re more apt to spend,” said Zack A., 15. “You’re going to spend 12% to 18% more money on a credit card versus cash. The physical motion of getting rid of a dollar bill is harder than just swiping a credit card.”
This dichotomy makes Gen Z a little bit more thoughtful and risk-averse than previous generations in how they approach the topic of money.
What else did we learn? Here are three ways Gen Z thinks differently about money–and why CMOs should take note in order to stay relevant.
They Make Informed Purchase Decisions (They Do Their Research)
Given the young age range of Gen Z, most of them only have access to limited funds. So what many older adults might perceive to be minor purchases might carry more weight for Gen Z. One male participant in the session summed it up: “I feel scared to spend more than $500 online.”
This generation has so much more criteria for regarding what they buy, as well as their spending behaviors. Additionally, while online shopping makes for an easy experience, it also adds an element of uncertainty about the product–its condition, size, fit, quality, etc. Gen Zers research products continually (sometimes moving beyond a specific brand), and at all stages of the buying process, in an attempt to get the best market value.
They Need Brand Assurance Before They Buy
When buying expensive items, Gen Zers will likely stick with mainstream brands that are recognizable because of an inherent trust in the familiar. They are considerate with their spending and are cautious about pouncing on a better deal or steal from an unreliable, often third-party vendor. That said, they do tend to turn to independent sellers and stores (e.g., Etsy or eBay) for more personalized purchases to ensure uniqueness or high quality. Again, this speaks to their risk-averse approach to shopping and spending.
On a more tangible note, sometimes it’s less about brand assurance and more about assurance in general that will steer Gen Zers toward a buy. Brand reputation isn’t always enough–having safeguards such as return policies and warranties in place is sometimes a deal-breaker. As one session participant said, “Having a solid return policy is key, especially if you’re buying something and you’re not sure of the quality or the maker.”
They Seek A Digital Connection (Reviews Or Help)
Despite their reputation for being all-digital, all the time, Gen Z still values the brick-and-mortar shopping experience. However, even before they enter the store, they almost always seek the opinions of others digitally before committing to buying something. That doesn’t mean random online reviews, either (Gen Zers are a skeptical crew). It means immediate person-to-person help online, friends’ opinions via social media, or even the thoughts of a YouTube channel personality they identify with. Technology gives Gen Z instant access to an abundance of real opinions from real and trusted sources–not just anonymous critics.
Brands need to change with their consumers, and Gen Z underscores the urgency. This youngest generation treats money differently from previous generations and will eventually inspire new frontiers in finance and retail. Brands need to create products, messaging, and experiences that will mitigate risk for Gen Z consumers. CMOs can do this by helping them navigate their purchase journeys in ways that make them feel secure and assured in their choices, all while maintaining a digital–yet human–connection with them.