Everything You Need To Know About Demanding Gen Z Consumers

Generation Z Consumers
What you need to know about the smart, powerful and highly demanding Gen Z consumers.
Josh Cochran.

They may be labeled as “millennials on steroids,” but members of Generation Z — defined by the U.S. Chamber of Commerce as those born in the year 2000 or after — are forging a path that’s so distinct and potentially disruptive that describing them as an amplified version of their predecessors hardly suffices.

This group of 16-year-olds and under has never known a world without a smart phone, has had an African American commander-in-chief for most of their lives, watched America tackle monumental mass tragedies such as the Sandy Hook Elementary School shootings and is living through the reality of climate change.

The result, experts say, is a group of up-and-comers who represent plenty of opportunities for footwear businesses.

Insiders told Footwear News that brands that offer unique and customizable products, are vocal about civic and environmental issues, and are honest in their advertising should win big with this bunch. And we’re talking a group that is expected to reach around 80 million in size, according to U.S. Census data. However, marketers could also run into challenges.

For instance, Gen Z’s unrelenting need to be unique, coupled with an entrepreneurial spirit, means that they will not simply respond to subpar goods with complaints — they will band together and create the next big thing to replace what didn’t work for them.

Here, we lay out six essential characteristics of Gen Z and how they see the world.

1. Give ’Em a Gadget & They’ll Fly
“We talk a lot about adapting to technology, but when it comes to Gen Z, there is no adapting — they’re natives,” said Tina Wells, founder and CEO of youth-focused Buzz Marketing Group, based in Haddonfield, N.J. Since technology is second nature to them, they are able to skip the learning phase and jump right into consuming massive amounts of content instantaneously, preferring platforms such as Snapchat and Vine, where they can view quick bursts of content from their peers.

While Gen Z spend considerable time online and on social media, they are far less likely than their millennial counterparts to fall into pitfalls related to privacy and oversharing.

“When millennials were growing up, everything was public. There was no filter. There also weren’t a lot of networks that allowed them to be careful about what they were putting out or allowed them to share with just a small group of friends,” explained MaryLeigh Bliss, chief content officer at Youth Pulse Inc., a youth-marketing and millennial research firm based in New York. “Millennials kind of forged the path and stumbled along, making some of the mistakes that Gen Z have learned from. Now, Gen Z are more cautious about the things they post online.”

2. Different Is Not Just Good, It’s Great
For teens growing up in the 1980s and ’90s, the focus was often on “fitting in” and doing everything that the “cool kids” did, but Gen Z prioritize individualism.

“They are constantly in contact with their peers, but at the same time, they don’t have the desire to be exactly like everyone else,” said Bliss. “Being unique and standing out is more appealing to them. They are more likely than those who are 18 years or older to describe their style as colorful, original or unique.”

But don’t assume that breaking away from the traditional teen narrative means Gen Z kids are antisocial. In fact, this cohort bonds closely with peers, but often on the basis of individual differences.

“I describe it as, ‘I want to be different, just like my friends,’” said Matt Powell, a sports-industry analyst with The NPD Group Inc. Powell suggested that athletic companies that offer customizable product will have sticking power by allowing teens to sport the “it” brand of the moment but with creative personal touches.

“Products that give them the option to wear a color that nobody else has or a shoe they can make their own are important to this generation,” Powell said. “And so far, Nike and Adidas are at the forefront of this.”

3. Diversity Is the New Normal
Gen Z are on their way to becoming the first minority-majority generation in the U.S. — but more interesting is the fact that this group already acknowledges and embraces diversity in an unprecedented manner.

“[Gen Z] have grown up not just thinking about differences through the lens of ethnicity, but all across the board,” said Kate Turkcan, cohead of the TRU Youth Monitor at Chicago-based The Futures Co., adding that gender and sexuality have become more fluid concepts.

“[Nowadays] we talk about a poly-cultural society instead of just [talking about being] multicultural. These kids are being raised with a sense of cultural intelligence and an ability to acknowledge differences, talk about them and celebrate them.”

What was once perceived as different is slowly becoming the status quo for these young people. And all around them their classrooms, shopping malls, sports teams and social media spaces are increasingly inundated with a mix of different racial, cultural and sexual identities.

And Turkcan said Gen Z expect brands to follow suit. “In advertising, no longer can you think, ‘If we have a couple different-looking people in our ad, we’ve checked off the box,’” she said. “It needs to go far deeper than that.”

4. If You Build It, They Might Build a Better One
The 2008 Great Recession occurred during Gen Z’s most formative years. In addition to impacting families across the globe, the financial crisis also dashed the hopes of many millennials, who were raised to believe that if they received an education and joined the right social clubs, their career ambitions would be realized.

Gen Z took notice, and they are on a mission to avoid the mistakes of their older counterparts.“The recession has shaped Gen Z’s pragmatic streak and the way they approach their careers,” Bliss said. “Majors in the science, technology, engineering and math fields are going to be more popular with this group. They know they need to go out into the job market with a very well-defined set of skills. They plan for their future at a much younger age.”

Those goal-oriented, hardworking personalities also come with an entrepreneurial spirit. Thanks to all the life hacks and DIY tutorials floating around online, Gen Z members feel capable of solving their own problems and creating their own products.

The popularity of e-tailing has also fostered a belief that the business landscape should be consumer to consumer, meaning that e-commerce is likely to accelerate as this cohort ages.

5. Dolla, Dolla Bills Are a Precious Commodity
In addition, the recession has had an impact on how this group relates to money. Although it’s still early, Gen Z appear to be far more budget-conscious than previous generations. Research by The Futures Co. found that spending on footwear and apparel by teens declined by 35 percent from 2008 to 2014.

“We’re also seeing an uptick in parents’ paying for clothes and shoes for their teens,” noted Turkcan. “Parents have more control these days, so brands have to appeal to teens as well as their gatekeepers.”

Experts pointed out that value-conscious Gen Z consumers — and their parents — often opt for experiences over actual merchandise, like shoes and clothes. For this reason, athletic brands and casual athletic offshoots tend to be top sellers because teens can wear these styles while on the move.

“Steve Madden, Skechers, Under Armour and Nike have product that plays into the experience theme,” explained Jeff Van Sinderen, a footwear- and apparel-industry analyst with B. Riley & Co. LLC. “Skechers is both active and value-oriented. Steve Madden is relatively value-oriented and appeals to that [Gen Z] girl’s sense of unique, fashion-forward, sometimes edgy style.”

6. They Want You to Keep It Real
Authenticity is vital to these new consumers, especially when it comes to marketing.

“[Gen Z] says, ‘I don’t want an ad where everything is airbrushed and perfect, because my life isn’t perfect, and I want to see that acknowledged,’” Turkcan said.
These days, teens and even younger kids have stepped up their call for reality-based advertising. “They are much more likely to think brands should drop things like photoshopping and are asking them — and even creating movements and petitions — to present [people] who are real,” said Youth Pulse’s Bliss.

In the same vein, Gen Z also appreciate labels with a cause. “This generation is very concerned about making the world better and is looking for brands that share those values,” Powell said. “In particular, climate change is a big issue. The brands that are going to work here are the ones that take a strong position on it and talk openly about the topic.”

According to Powell, Nike and Adidas are among the companies taking a stance on issues important to Gen Z. “Adidas continues to win awards for sustainability, and Nike has been at the forefront of new manufacturing techniques to limit waste in the products they make,” he said. “Both brands have also publicly taken positions on topics like marriage equality.”

[Editor’s Note: This story first appeared in print 02/15/16]