| Jan 31, 2019

From A to Gen Z: The Next Generation of Shoppers (Part 2)


In our previous post, we introduced you to Gen Z, a generation that has grown up with smartphones, social media, Google and Amazon. Numerator OmniPanel™ and Ad Intel data tells us that trying to appeal to Gen Z’ers as if they’re younger versions of Millennials would be a mistake, given the differences in cultural diversity, technology usage, and response to advertising when compared to Millennials.

  • Gen Z is more culturally diverse and unacculturated.
  • Gen Z is less concerned about healthy eating and exercise.
  • Gen Z is more likely to use Tumblr, Snapchat and Twitter and less likely to use Facebook and Reddit. 
  • Gen Z is more likely to use social media to make friends and as a discovery tool.
  • Gen Z shops online less frequently, spends less per trip, and builds smaller online baskets, which could be tied to life stage in many cases.

Gen Z is expected to be the largest generation of consumers by next year, so retailers and brands need to gain a better understanding of Gen Z and what’s driving their shopping behavior. Let’s continue our comparison of Gen Z and Millennials by looking at preferences when dining out, how this is reflected in grocery shopping behavior, and whether the current creative mix used by retailers and brands to attract Gen-Z shoppers is on-target.

Fast Food? Gen Z Is Lovin’ It! 

Nearly one in five (19.4%) Gen Z’ers dine out at least four times per week, indexing 111 to Millennials. Gen Z is also more likely to choose fast food than Millennials. Among fast food restaurants, McDonald’s is the top choice for both Gen Z and Millennials, while Taco Bell has jumped into the number two spot for Gen Z.

For Gen Z shoppers, dining out is more about indulgence. Their decision to dine out is driven by the desire to satisfy a craving or treat themselves. Millennials are more likely to dine out because they’re crunched for time and too busy to cook. This indicates that Gen Z would be more receptive to marketing messages that focus less on convenience and more on the enjoyment of dining out.

The Food Channel? Not as Engaged.

Gen Z’s preference for fast food and dining out is reflected in their grocery shopping behavior. Gen Z is less engaged than Millennials in the Food channel, with less frequent grocery shopping trips, lower spend per trip, and smaller baskets.

When it comes to grocery shopping, Gen Z seems to focus more on value (Food4Less, Stater Bros.) and less on natural or organic items (Whole Foods, Sprouts) when choosing a food retailer. They’re also less likely than Millennials to shop at retailers with a significant private label presence (Aldi, Trader Joe’s). 

A Disconnect Between Retailer Creative and Gen Z Preferences

Gen Z is all about the experience. According to Numerator Insights data, Gen Z is far more likely to engage with and be influenced by in-store and special event experiences than Millennials. When it comes to advertisements, Gen Z also prefers social media and mobile over emails, texts or desktop ads. 

Even though Gen Z is clearly a mobile-first generation, most retailers seem to be shifting to online display advertising, often at the expense of mobile and social media. As top retailers like Amazon, Target and Kroger invest more in online display than mobile and social, they miss out on targeting the Gen Z shoppers, and it shows: Gen Z’ers aren’t spending as much as Millennials in those those retailers.

On the other hand, we see that brands that are making social media a bigger part of their creative mix, such as Wrigley Gum, Cheetos, Powerade and Kit Kat, are generating more sales from Gen Z.

Gen Z Preferences & Practices

Private label brands in particular have some catching up to do when it comes to product perception with Gen Z. Private label brands are winning over Millennials, but Gen Z is more skeptical of private label product quality and less likely to associate a private label purchase with being a smart shopper. 

According to Numerator Insights, Gen Z’ers aren’t as likely as Millennials to plan purchases in advance, use coupons, or check store ads. Because Gen Z tends to make impulse purchases, the right in-store experience combined with a well-timed, well-placed mobile ad could lead to more sales.

The importance of the in-store experience to Gen Z speaks to the value of a sound omnichannel strategy. For example, Gen Z is more likely to shop at Walmart than Millennials, but less likely to shop at More dollars continue to shift online, but brick-and-mortar is still responsible for the lion’s share of sales.

The Next Generation of Shoppers

Brands need to start building loyalty with Gen Z now. This begins with using psychographic data to understand the attitudes that drive shopping behavior and developing marketing strategies that align with media consumption habits. 

Where is Gen Z shopping? What are they buying? How can you reach and resonate with them to influence their purchases? 

Let Numerator help you answer these and other questions for your product categories. Contact us to find out how we can help you build holistic customer profiles for your campaigns, briefs and media plans.