Via The Boston Globe : Move over, millennials. Gen Z is new target audience
Believe it or not, millennials are aging out of their privileged position as the nation’s most sought-after consumers, the ones advertisers want to influence. Their replacement? The nation’s teenagers, also known as Generation Z.
The Gen Zers, loosely defined as those 20 and younger, are starting to spend their own money and are developing habits that could influence their buying through adulthood. As a result, companies from the video streaming service Netflix Inc. to retailer Target Inc. to athletic shoe maker Converse Inc. are trying to get on the Gen Z radar.
“It’s the new, next hot thing,” said Amanda Fraga, director of strategy, insights, and innovation at C Space, a Boston market research firm.
Thus begins a shift away from the 20- to 34-year-old millennials, and the emergence of a new effort aimed at understanding just how Gen Zers think.
Research firms like C Space say they are seeing increasing demand for information from companies that are looking to understand what makes members of this generation tick and how best to reach them. Over the past year, for example, C Space has held several daylong sessions with companies and Gen Z focus groups, with another scheduled for Tuesday that will bring together 34 executives and teenagers. C Space declined to name the companies but said they include banks, retailers, restaurant chains, and investment firms.
So what’s so special about Generation Z?
To start, Gen Zers already have some $44 billion in purchasing power, according to the New York advertising agency Sparks and Honey — and that buying power is only expected to grow.
And there are roughly as many Gen Zers (82 million) as there are millennials (83 million) and baby boomers (76 million).
This increasingly attractive demographic, however, poses greater challenges for marketers than previous generations as media grow more fragmented and reaching young consumers requires more precise targeting. Unlike so-called millennials — the oldest of them born in the 1980s — the entire Gen Z population has known nothing but an Internet-connected world.
From their earliest years, they have been shaped by social media, e-commerce, and on-demand services, using technology to customize the information they receive, the products they buy, and the interactions they have, said Ian Cross, director at the Bentley University Center for Marketing Technology.
At the same time, they are conservative in their spending, less likely to expect financial help from their parents, and more wary of the future after witnessing their parents or friends’ parents lose jobs in the Great Recession.
All this means marketers need different approaches to gain the attention of Gen Z — and turn traditional advertising models on their head, industry analysts said.
In the past, most ad dollars went to paying television networks, radio stations, and newspapers. But to reach Gen Z, companies will need to spend more to create videos and other content that provides useful information, entertains, and otherwise impresses them enough that they share with families, friends, and followers, industry analysts said.
And in today’s media environment, where something more interesting is just a click away, marketers will have to grab their audiences fast — in about eight seconds, said Tom Gerace, Skyword’s chief executive.
“It used to be that companies spent a little money making the advertisement and a lot of money distributing it,” Gerace said. “Now, brands will spend a lot more money to create the stories and spend less on distribution.”
One example is Sperry Top-Sider Inc., known for its Top-Sider boat shoe. The Lexington company, in its “Odysseys Await” campaign, is posting a combination of videos and still photos of sailing, kayaking, and cliff diving to connect with Gen Z’s desire for adventure.
Converse’s “Made by you” campaign aims to appeal to Gen Z’s preference for customized products. It emphasizes personalizing white sneakers with paint, stencils, and jewels.
The goal, analysts said, is not only to get teens to buy and decorate sneakers, but to photograph them, post the photos, and share the pictures with friends — ultimately influencing the friends to do the same.
Carolyn Carlisle, a junior at Nauset Regional High School on Cape Cod, said her friends like the marketing of Ivivva, an athletic wear brand of lululemon athletica Inc. of Vancouver, B.C. Girls upload photos to the Ivivva website of themselves wearing the brand’s clothing while doing an activity, and the best photos are posted on Ivivva’s Instagram account.
“You can obviously connect to those people because they are just a regular person who you might know,” said Carlisle, 16. “You are going to pay attention to what they are wearing because you feel you are similar and live the same life, rather than a model.”
To the older consumers, it’s more obvious a product is being advertised when brands post content on social media. But teens do not see it this way, said Northeastern University communications professor Brooke Foucault Welles, who researches high schoolers’ social media habits. Gen Z sees the content as experiences they want to remake.
“They really like video experiences and tutorials and actively seek those things out,” Welles said. “Kids are doing identity development work, coming up with their own brand preferences.”