Gen Z: Key Insights for Targeting the Next Generation of Consumers

As the next wave of consumers, Gen Z is shaping up the future of brands, marketing strategies, and consumer behavior. The global Gen Z population (those born between 1997 and 2012) is estimated to be around 2.47 billion as of 2023, making up approximately 32% of the global population.

In India, Gen Z is a significant demographic, with an estimated population of 472 million, representing about 34% of the country's total population. This makes India home to the largest Gen Z population globally. This cohort is not only the largest generation but also one of the most diverse and digitally savvy groups to emerge. That's why we refer to Gen Z as the "True Gen." In contrast, the previous generation—millennials, often labeled the "me generation"—began during a time of economic prosperity and focus on the self. Millennials tend to be more idealistic and confrontational, with a lower tolerance for differing perspectives.

Coming back to these Post-Millennials, they represent a spending power of over USD 61 billion in India, making them an essential focus for brands seeking long-term success. Unlike previous generations, they have a unique set of values, behaviors, and expectations, and their approach to consumption is vastly different. When it comes to fashion, 68% of Gen Z in India prefer brands that emphasize comfort and casual style. In the tech space, 80% of this generation consumers are highly focused on purchasing smartphones, with preferences leaning towards mid-range models and 55% of them are inclined to purchase fresh products from online vegetable platforms.

Market research plays a pivotal role in helping companies identify these evolving preferences and consumption patterns, enabling brands to craft targeted marketing strategies that resonate deeply with them. By understanding the factors that drive their purchasing decisions—such as affordability, sustainability, and personalization—brands can align their offerings to meet Gen Z’s expectations, ensuring long-term brand loyalty and success.

Understanding this Generation 

Unlike Millennials, who grew up during the rise of the internet, Gen Z is the first truly digital-native generation. They’ve never known a world without smartphones, social media, and instant access to information. They are passionate about activism and prefer brands that address societal issues. Growing up during the 2008 financial crisis and the COVID-19 pandemic, they are more financially conservative, prioritizing value for money, affordability, and long-term savings. Their hyper-connectivity, combined with a pragmatic outlook on the future, shapes their buying behavior in unprecedented ways.

Values and Beliefs of Gen Z Consumers

For Gen Z, values and beliefs are crucial and brands that align with these values are more appealing to them. They prefer businesses vocal about societal issues like racial equality, LGBTQ+ rights, and mental health. 

According to Deloitte’s 2024 Gen Z and Millennial Survey, 79% of Gen Z around the globe feel more positively about brands that promote social justice issues. Social responsibility is an important factor for them, as they hold brands accountable for their social impact. Companies like Tata Consultancy Services (TCS) and H&M are actively promoting social responsibility through their work in education, healthcare, and community empowerment, while appealing to Gen Z’s desire for brands that positively impact society. 

Secondly, Inclusivity is also essential for Gen Z, as it is foundational to their interactions with brands. Fenty Beauty and Netflix have both embraced diversity and inclusion in their respective industries. Fenty Beauty introduced 40 foundation shades to cater to diverse skin tones, while Netflix showcased diverse content, appealing to Gen Z's demand for representation in entertainment. 

Thirdly, Personalization is also crucial for Gen Z, as they expect brands to offer tailored recommendations, and product lines, making them feel more connected to a brand. Spotify and Nykaa are some of those companies that utilize data-driven personalization to enhance the shopping experience for them, providing curated playlists and recommendations, and enhancing their products based on individual preferences and user data.

Gen Z’s Shopping Psychology Over Various Channels

Gen Z's purchasing behavior diverges significantly from previous generations, primarily driven by their digital upbringing. They are mainly influenced by visual content and are considered the first generation that prefers visual marketing strategies. To effectively reach Gen Z, a cohesive omnichannel marketing strategy is essential. Platforms like TikTok, Instagram, Facebook, and YouTube as a hub for product discovery and purchasing dominate their attention, making it crucial for brands to focus on visually-driven marketing strategies. Optimizing websites and apps for mobile use also ensures seamless integration between channels. 

In addition to their reliance on digital channels, market research, and data analysis are invaluable for brands in providing data-driven insights and using data analytics tools for identifying key trends, measuring consumer sentiment, and predicting responses to tailor recommendations and promotions across multiple touchpoints. Through social listening, trend tracking, and targeted surveys, brands can assess the most effective content types, monitor emerging preferences, and adjust their messaging to align with Gen Z's evolving expectations.

As research-oriented decision-makers, Gen Z relies heavily on online reviews, comparison tools, and peer feedback to make informed choices. A Google survey revealed that 75% of Gen Z prefers shopping online, but they are more likely to purchase via mobile than desktops/laptops. They also have high expectations for customer service, expecting brands to respond quickly to inquiries, complaints, or feedback. Slow responses or unresolved issues can lead to immediate disengagement. 

Despite their digital-first habits, these Digital Natives still value physical experiences to touch, feel, and try products before purchasing. The tactile and sensory experience that physical stores provide enhances the overall shopping journey, especially for high-value items like electronics and fashion. They are drawn to experiences that combine physical interaction with digital convenience, such as click-and-collect services and QR code integrations in stores, which blend online efficiency with the tangible aspect of shopping. Pop-up stores and experiential marketing events, such as those done by Nike in India, help create immersive, in-person brand experiences that can be shared on social media, amplifying both the online and offline presence.

Pragmatic Decision-Making Style of Gen Z Consumers

One of the most defining traits of this generation is their rational approach to decision-making. They are quick to spot overpriced items and prefer brands that offer durability and long-term value. DMart in India, a popular choice among Gen Z consumers, offers affordable yet high-quality products, similar to Walmart, which prioritizes value without compromising quality.

According to ThredUp Resale Report 2024, 40% of Gen Z shoppers globally have bought second-hand clothing, indicating their preference for affordability and sustainability. OLX and Quikr are popular platforms in India where Generation Z  finds value in second-hand electronics, furniture, and fashion. Brand loyalty is more about consistency, authenticity, and ethical practices. 

Engaging Strategies for Marketers Targeting Gen Z Consumers

Gen Z consumers are more likely to trust influencers than traditional celebrities, with micro-influencers being particularly effective in promoting products authentically. Brands like Daniel Wellington (Swedish watch brand), and MamaEarth have built a billion-dollar business through influencer marketing, collaborating with micro-influencers on Instagram. User-generated content (UGC) encourages customers to create content around products, building community and serving as powerful word-of-mouth marketing. They prefer brands that offer interactive, participatory experiences, such as polls on Instagram stories, TikTok challenges, or augmented reality filters. To meet their expectations, brands must embrace cutting-edge technology. Snapchat, a social Media platform, while investigating the influence of the AR tools on shopping discovered that 92% of Gen Z is more likely to engage with brands that use advanced technologies like AR and VR therefore companies like Lenskart use (AR) for virtual try-ons to enhance their shopping experiences.

Final Thoughts

This modern, hi-tech generation is a unique and powerful force in the consumer marketplace. Brands that wish to capture their attention must go beyond traditional marketing strategies and authentically connect with this group’s values, beliefs, and behaviors. Understanding their digital habits, social consciousness, and pragmatic decision-making style is key to building lasting relationships.

By leveraging diversity, inclusivity, ethical practices, and innovative digital marketing strategies, brands can not only meet Gen Z’s high expectations but also create loyal customers for years to come.

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