Generation Z is coming into its own, and according to new research, it will account for 40 percent of all shoppers by 2020, reported USA Today.
Engagement Labs, the data and analytics company that assists marketers, says the group of people born between 1997 and 2016 are 86 million strong, and influence $600 billion of spending by families. This group is also big on conversations – both online and offline – with Engagement Labs finding them to drive 19 percent of purchases.
"You see an advertisement, people know it's a paid endorsement,'' says Brad Fay, Engagement Labs' chief commercial officer. "It’s only got so much credibility … the most powerful messages are ones that come from someone you know.''
Engagement Labs surveyed 6,736 teens during the course of 12 months about what they talked about in the previous 24 hours, and found that those topics included gadgets, drinks and snack foods. Fay noted that they found Generation Z to be a very social group of people. As a result, digital devices from the likes of Apple and Samsung are going to be popular with this group, as are food and beverage brands.
"Coca-Cola, McDonald's and Pepsi are all brands you typically consume with other people face to face, so they, too, could be thought of as social brands," said Fay. He noted that young people aren't too keen on unhealthy products like soda. "Both Coke and Pepsi are taking significant declines, and I think that is symptomatic of a shift away from the more sugary types of beverages toward a wider diversity of healthier types of beverages."
Recognizing the buying power of Generation Z, reports surfaced in May that Target is rolling out three new house brands geared toward the retailer’s teen and young adult customers. Two brands will focus on clothing, while another will focus on electronics, retail news source Chain Store Age reported. “The introduction of these new brands provides us with a really exciting opportunity to create stronger relationships with the next generation of guests and show them, authentically, the role Target can play in their lives now and into the future," said Rick Gomez, executive VP and chief marketing officer of Target.