Generation Z: What Drives Their Purchasing Decisions?

Generation Z is the first group to be born into a world where technology is already prevalent. Their preferences influence their brand loyalty in shopping and advertising.

The generation known as Generation Z or Zoomers, who were born between 1997 and 2012, are now starting to join the workforce and have a considerable influence on the consumer-packaged goods (CPG) market with their purchasing power.

On average, households belonging to Generation Z spend 12% more on consumer-packaged goods than other households, according to purchasing data analyzed by consulting firm NCSolutions. It’s worth mentioning that 25% of this group has Latino origins.

The Main Influences Behind the Purchasing Decisions of Generation Z Are:

A Social and Sustainable Mindset Drives Brand Loyalty

Gen Zers prefer brands whose missions align with their values and are more willing to support and be loyal to purpose-driven brands.

Thirty percent of Gen Z values brands that prioritize the environment, compared to 15 percent of Baby Boomers, and 27 percent will stick with brands that use sustainable packaging versus 18 percent of Baby Boomers.

In contrast to previous generations, Generation Z is less focused on brand loyalty towards products that offer superior quality or value within their budget.

“Undoubtedly, Generation Z will raise the bar for CPG brands, as they differ from previous generations in some significant ways. Having grown up with the Internet, not next to the Internet, they are accustomed to having instant access to information, products, and services. They bring to the marketplace a fully informed and defined point of view about advertising and brands,” said Alan Miles, CEO of NCSolutions.

“That presents both an opportunity and a risk for brands, which is why we conducted this analysis. The findings will help brands consider how best to connect and build relationships with this generational force,” Miles added.

Related Article: Marketing to Third Generation Hispanics: It’s More than Speaking Spanish

Discreet, Fun, and Social Ads Connect

Compared to other generations, Generation Z is more likely to respond positively to humorous or entertaining advertising. Most (58 percent) do not appreciate ads that interrupt their content.

Additionally, over half of Gen Z (52 percent) prefer creative and entertaining ads. This preference is shared by 42 percent of baby boomers, 44 percent of millennials, and 40 percent of Gen X.

Social Media Influences Decisions

Zoomers are more receptive to advertising on social networks, much more so than ads on cable or broadcast television.

Nearly three in four members of Generation Z (72 percent) say they are open to seeing ads in their newsfeeds versus 28 percent who say they are receptive to ads on cable TV and 20 percent who say they are open to TV advertising.

Zoomers Love Convenience

The analysis also found that the younger generation values convenience in several different ways.

Fifty-five percent of Generation Z have frozen meals on hand compared to 49 percent of previous generations.

Twenty-two percent of Generation Z shop for groceries at convenience stores, and 18 percent look for food products at drugstores. At the same time, only eight percent of Generation X shop for groceries at a convenience store, and six percent look for food products at a pharmacy.

The economic impact Generation Z will have in the coming years “drives the need to understand them better as this understanding will be particularly important for brands’ long-term marketing strategies,” Miles said.