Each generation is different in its buying behaviors, or the way it values and purchases products. Many factors shape buyers, including the economy and world events. It’s common for the behaviors and traits of members of every generation to differ, especially in how they spend, interact with brands and save.
For a small business, it is critical to understand these younger generations. Doing so could help to make better decisions, whether in stocking products or creating marketing plans. Here are some examples of what to expect from the millennial and Gen Z generations that could help small business owners prepare for the future.
Who Makes Up These Generations?
Millennials are a generation made up of about 75 million people. It’s larger than any other age group today. Today, millennials are between the ages of 26 and 41. By comparison, Gen Z makes up about 68.2 million people between the ages of 9 and 24.
Breaking Down the Spending Habits of Millennials
Millennials spend about $47,256 per person each year. How they spend is much different than older generations. That’s because as much as 86% of Millennials are digital buyers. Furthermore, about 36% want to spend less time in brick-and-mortar stores.
Millennials are also heavily influenced by buyers. About 72% of them say that their experiences and interactions on social media fuel many of their buying behaviors. That’s important for small businesses that may not actively engage in online sales or social media marketing campaigns.
Also important to millennials is branding. They heavily favor choosing brands they feel better to align with their beliefs and values, with 83% saying that this influences who they buy from and what they purchase. When millennials decide to buy something more inexpensive than another product, they will choose the product that is more ethical than the company that is lower in price.
Also noteworthy is that 48% of Millennials would choose a product if it offered free delivery over a product that did not. Sometimes they aren’t interested in ownership of a product: Millenials may choose to pay for access to a service or product rather than buy it outright.
What to Expect From Gen Z
Though its members are still relatively young, there is much to learn about Gen Z and its spending habits and belief systems. Together, this generation will represent $143 billion in purchasing power.
What we know about this generation is that product choice, availability, convenience, and value are the most important factors when buying. About 36% of this age group buy products important to their social and political beliefs, which is relatively lower than millennials. They are still passionate, though, with 75% stating that sustainability is one of the most critical factors for buying decisions. Nearly 90% of Gen Z will pay as much as 10% more to purchase sustainable products than they would other products on the market. About 38% of this generation prefers shopping in a physical store to digitally.
As a small business, it may be critical for a company to work to adjust its marketing methods and branding to better align with Gen Z’s demands. For example, utilizing numerous marketing formats across various shopping channels is critical.
A strong focus on eco-friendliness and the societal aspects of products is vital to reach this brand fully. It’s also essential for the branding message to come through properly. When possible, brands should consider a subscription-based model to get the most out of sales to this generation.
Other key factors that support Gen Z’s needs and shopping behaviors include offering a simple and easy return policy and ensuring that free shipping and delivery are an option.
What Small Businesses Can Do to Meet the Purchasing Demands of Gen Z
To meet Gen Z’s demands, companies should work to ensure their supply chains are best aligned with sustainability, as it is one of the most important factors for buying behaviors by this group. These young adults are still very much focused on social awareness and responsibility, like millennials.
Also, consider how products and promotions benefit this customer base. They are looking for real value and do an excellent job of recognizing what does benefit them.
To reach this generation, focus on creating an omnichannel experience so you can reach buyers digitally and in person. This generation isn’t opposed to going to a store to make a purchase. Gen Z is more interested in product information than other generations, so adding plenty of facts about your products and company will add to your appeal.
Need help with eCommerce for your business? The marketing experts at Fisher Green Creative can lend a hand. Contact us today to learn more about how we can help.
Jay Catlin is CEO at AMS Fulfillment, a leading order fulfillment company servicing B2B and B2C clients nationwide. Catlin has been with the company since 2002 and helped grow AMS into a successful business that emphasizes client and employee satisfaction, community involvement, and environmental awareness.