Generation Z and Your Online Business - dummies

By Shannon Belew, Joel Elad

Often described as the younger siblings of the tech-savvy millennials, this is the first generation to grow up completely digital. Gen Z kids have never known what it’s like to live in a world without the Internet or without social media. Even the younger side of this market segment, those kids under 10, are comfortable with technology; they have likely been playing video games and using smartphones since starting pre-school.

The older segment of Gen Z has some specific traits that you want to consider when trying to market to them, especially online. The Gen Z teens and young adults tend to share the following traits:

  • They are adept at communicating via social media, but prefer platforms like Snapchat and Whisper — and shy away from Facebook.
  • They are guarded with online privacy, having seen older generations disclose too much online.
  • They are entrepreneurial; this generation prefers to own a business as opposed to work for one, but is still practical when it comes to earning a living.
  • They are risk-averse and generally cautious.

After learning all these traits, you may be curious as to what type of customer an older Gen Z would make. In actuality, they are likely to be a loyal, repeat customer. The caveat is that you must treat them fairly, offer a solid product (or service) at a reasonable price, and respect their privacy when marketing to them online. But what customer wouldn’t you treat this same way? When focusing on the younger side of Gen Z, privacy is also a huge concern. To understand the privacy regulations when marketing to this group, let’s look at the way in which younger children are further divided into three distinct groups, based on age:

  • Kids: Although children who are 7 or younger don’t always have enough independence to shop by themselves, they’re influential in their parents’ final purchasing decisions. Parents want to please their offspring and usually give ’em what they want. And keep in mind that marketers only consider kids 5 and older as part of Gen Z, so this group is a very small segment, but still counts!
  • Tweens: Children between the ages of 8 and 12 are considered a target market unto themselves. These kids have outgrown “baby” items and are starting to emulate the trends made popular by their older counterparts (teens).
  • Teens: Ranging in age from 13 to 17 (some marketers go all the way to 18), this group is typically more mature. Savvy-shopping teens usually have greater decision-making abilities with less adult input. And many teens have hefty amounts of money to throw around, from working part-time jobs or from receiving an allowance from their parents (or both).

All three age groups are adept at using computers. Tweens and teens are particularly comfortable surfing the Internet and embracing technology for multiple purposes — including shopping online, downloading apps and music, and playing online games. According to a 2014 Taking Stock with Teens report from Piper Jaffray Cos, 80 percent of teens (ages 12 to 17, with an average age of 16) shop online. That number breaks out to 78 percent of girls and 82 percent of boys with online shopping habits. Fast forward to the 2014 report, and we get a closer look at overall online habits. Gen Z teens:

  • Shop at specialty stores and boutiques over large retailers and department stores
  • Watch more Netflix and YouTube versus traditional television and cable
  • Plan to buy next-generation game consoles more than in previous years
  • Prefer smaller, independent brands over large brands, particularly with cosmetics
  • Stream music more than listen to broadcast radio

Other interesting take-away points from this niche group of online spenders are the uses of mobile devices and digital streaming. Approximately 55 percent of teens have an Apple iPhone, and 56 percent own a tablet. Mobile devices are an important part of teens’ lives, and they use smartphones and tablets for everything from online research to online shopping. And nearly half of teens are equally passionate about downloading or streaming movies from the Internet.

Similar trends have been identified by Pew Internet and the American Life Project study, including these facts:

  • More than half of teens using the Internet do so every day.
  • When it comes to socializing, 73 percent of teens actively use a social networking site, and prefer Instagram, Twitter, and Snapchat.
  • It’s not all fun and games; approximately 62 percent of teens look to the Internet for news, current events, and political information.

Pew Internet has a lot of good research to help you better understand the market of kids and teens online. You can access more facts about Gen Z teens and Internet usage for free on its website.