Three factors that guide Gen Z’s spending habits » strategy

Three factors that guide Gen Z’s spending habits

Digital and social motivations are just as important as sustainability.

This story was originally published in the 2022 Summer issue of strategy magazine.

By Will Novosedlik

Born after 1995, Generation Z has been shifting the narrative in discussions surrounding diversity, mental health, politics and even consumerism. To appeal to this age range meaningfully and effectively, companies must speak the same language as the cohort. These are three priorities that Gen Z has in mind when it comes to purchasing and brand decisions, according to WGSN.

As the concept extends beyond gaming, luxury retailers are exploring ways to connect with Gen Z in virtual reality. Some luxury brands are moving away from human influencers and experimenting with digital personalities called “synthfluencers.” WGSN predicts that these synthetic humans will gain more traction as the lines between virtual and real continue to blur. As an example, Dior debuted a 2021 collection at Shanghai Fashion Week in collaboration with synthfluencer Angela 3.0, a digital impression of Chinese celebrity Angelababy. Angela 3.0 modeled the collection for 90,000 drop-in fans via Weibo. WGSN advises brands to use synth-humans to position shopping opportunities as virtual experiences, with tiered ticketing, ballots and timeslots, providing new ways for consumers to explore products.

For Gen Zers, commerce is social. A study by Sprout Social noted that 43% of US Gen Zers purchased via social platforms in 2021. In response to the popular hashtag #TikTokMadeMeBuyIt (which has been used billions of times), TikTok launched a platform for retailers and brands so that product bundles can be purchased directly via TikTok. Gen Zers also tend to rely on the opinions of their peers and favorite influencers to make brand decisions. To convert “likes” to purchases, WGSN advises brands to focus on community-building, creating original content, embracing authenticity and leaning into TikTok’s shoot-from-the-hip aesthetic.

Climate concerns color every aspect of Gen Zer’s life, and they’re not afraid to tell us about it. A 2021 Lancet study found that 60% of the cohort are extremely worried about climate change, and 45% say these feelings are with them all the time. As a result, Gen Z is “flocking” to careers that are focused on fighting climate change, says WGSN. In the US, 70% said they are more likely to shop sustainable products. At the same time, they feel completely ignored by corporations. The report advises brands to proactively go “above and beyond” by lobbying for greater change at the top and adopting measurable and transparent initiatives committed to sustainable, systemic change.


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