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New General Market: Gen Z emerges as influential digital-first segment

The youngest consumer group, Generation Z, is beginning to make a name for itself with a unique set of behaviors and attitudes that set it apart from the generation before it, according to Larry Levin, executive vice president of consumer and shopper marketing and thought leadership at research firm IRI.

“They are not mini-millennials; they are a population unto themselves,” Levin said in a presentation at the recent New General Market Purpose-Driven Summit presented by Drug Store News and Mack Elevation.

Generation Z, the oldest of whom are now about 21 years old, represent about 23% of the U.S. population — about the same as baby boomers — and already are having an influence on how their households shop. Nearly 50% of those aged 18-to-21 years old are participating in their household’s grocery shopping, according to IRI research.

They are keenly aware of value, and Levin said that 66% buy products based on price.

“That doesn’t mean it is the cheapest, but the best value for their money,” Levin said, noting that Gen Zers, whom he called the Zeneration, define good value as something that makes their lives better.

Levin described three significant forces shaping the attitudes and behaviors of these young consumers — their diversity, their tech savviness and their awareness of the dangers of the world around them.

Diversity as the Norm

These young consumers have grown up expecting to live amid cultural and ethnic diversity, and are predisposed to expect variety. This is leading to more targeted product development from CPG companies, Levin said. He also said that brands would be challenged by the willingness of these consumers to experiment with flavor and ingredient combinations.

Gen Zers are, however, interested in brand names, with more than half — 52% — saying they buy products largely based on brand names, which is more than any other generation. They also are highly comfortable with online shopping. Fifty-one percent of older Gen Zers said they prefer shopping online, rather than in brick-and-mortar stores. This generation also is comfortable using social media to recommend products to their friends, and to look for product recommendations from others on social media.

They are so attached to their phones, in fact, that fewer and fewer see a need to hang out in person with their friends, Levin said. They also are less likely than previous generations of teenagers to have an interest in driving and dating.

Gen Z also is acutely aware of the threats in the world around them, ranging from online bullying to school violence and terrorism, which may be influencing some of these behavioral preferences.

Gen Zers’ attitudes about success are in some ways similar to the oldest generations, according to Levin. About three fourths — 74% — of the Zeneration defines success as “being happy,” and a majority also said that “always doing your best,” “doing good in the world” and “being healthy” are definitions of success.

These young consumers also have a broad, holistic view of health, defining it as feeling good about themselves and having a positive mental attitude, for example. They also increasingly associate eating well with good health, and many have grown accustomed to quantifying their health goals regularly through wearable devices.

“It’s a paradigm shift from being healthy to being well — living a well-balanced lifestyle,” Levin said. “This is a healthcare generation, not a sick care generation.”

This story is part of a Special Report on the New General Market Purpose-Driven Summit — to read more insights, click here
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