Generational Research: Gaining New Insights into Millennials and Gen Z
It has been a turbulent ride for Millennials (ages 26–41) and Generation Z (ages 10–25). Their lives have been impacted by the rise of the internet and personal computers, 9/11, the 2008 financial crisis, geopolitical instability, accelerating climate change, and social movements. And now, they’ve been rocked once more by the Covid pandemic. Without question, these highly transformative periods have shaped these two generations. It has given them unique ideas, values, and buying preferences. For businesses and marketers, understanding Millennials and Gen Z should be a top priority. After all, as of 2022, Millennials and Gen Z account for 140 Million Americans and over $1.8 trillion in disposable income (watch out, Baby Boomers!).
We’ve identified some of the principal factors influencing Millennial and Gen Z consumption – and the key takeaways for businesses and marketers.
For much of their adult lives, Millennials and Gen Z have faced widespread layoffs (e.g. during the Great Recession and Covid pandemic) and sky-high prices (for education, housing, etc.). As a result, these young generations have struggled to gain a financial foothold. Today, almost half of Millennials and Gen Z live paycheck to paycheck. About one-third state the cost of living as their most significant concern. And according to the Federal Reserve, Americans aged 23–38 hold only 2.9% of total U.S. household wealth.
Millennials and Gen Z are responding in a multitude of ways. Some have scaled back their spending, opting for cheaper or fewer purchases. Others have eschewed ownership, giving rise to companies like Uber and Zipcar. Over 30% have taken on second—or even third—jobs. Finally, many lean heavily on credit, subscribing to the “buy now, pay later” mindset.
Takeaways for Businesses/Marketers: To appeal to this cohort, offer low prices and flexible payment options.
Takeaways for Businesses/Marketers: Go green and embrace sustainable practices and products as much as possible. Then, be sure to clearly communicate your environmental values and efforts to the Millennial and Gen Z audience.
Takeaways for Businesses/ Marketers: Publicly acknowledge the importance of diversity and the role of businesses. Then walk the talk- be inclusive in your adveritsing, hiring, and offerings.
Takeaways for Businesses/Marketers: Ride the wellness wave! Consider offering products or services that promote wellness either directly (like meditation or exercise gear) or indirectly (e.g. by helping clients save time or energy, like meal kits or dry shampoo).
Despite their similarities, there are also some key differences between Millennials and Gen Zs. Among other examples, Gen Zs are more conservative in their spending, as many observed the devastating impacts of the Great Recession on their parents. They are more inclined to seek “what’s new and buzzy” in digital technology, while many older Millennials have found what works for them. They are the most diverse and progressive generation, having come of age during the Obama administration. Moreover, though hooked on social media, Gen Z is sadly the loneliest and most socially isolated generation. The younger generations are not a monolith. In order to appropriately target Gen Zs and Millennial, businesses must first understand the critical differences between these generations. To this end, businesses should invest in market research, segmented by age group, with a reputable research company like Op4G.
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