Four things brands need to know about Gen Z

They make up a quarter of the American population. They are the first true-blue digital natives. And they learned how to play with phones and take selfies before they learned how to swipe, which was some time before they knew how to walk.

Move over millennials, we’re talking about the latest generation that’s on all the marketers’ minds: Gen Z. With new research on this age group  — those born between 1998 and 2008 —  however, marketers may be able to get a decent head start on figuring them out.

The latest edition of digital agency Deep Focus’ Cassandra Report demystifies Gen Z, highlighting new data about this group’s behaviors, habits and attitudes as they relate to money and spending, brands and social media. Deep Focus interviewed 901 Gen Z consumers aged 7 to 17 and also surveyed 500 of their parents.

Here are the four things marketers need to keep in mind when catering to this new wave:

They swim in technology.
If you’re a brand looking to target the generation that will usurp the millennials, you better pull up your technology socks and not only make your way to their smartphone screens but also get acquainted with all the burgeoning platforms they inhabit. Fifty-one percent of these tweens already have some form of a social media account, and over 70 percent regularly use their personal smartphones to take photos, text,  email and take videos in that order.

They also live in this virtual world far more than their millennial counterparts, spending an average of 10 hours a week online. What’s more important from a brand point of view is that 14 percent of the respondents admitted to having made a purchase within an app-based game, and this number is likely to rise.

In terms of the platforms, 29 percent think that Facebook isn’t “cool” anymore, but they still find it useful for information on a variety of things. They have a preference for “creative” platforms like Instagram, and over 56 percent also regularly use ephemeral and anonymous messaging apps such as Snapchat.

“What we know about them is that they were born with phones in their hands, and laptops for them will at most be educational or work devices,” said Matt Rosenberg, svp of marketing at 140 Proof. “If you want to get personal with them, you’re going to have to reach them through their personal devices.”

They value money.
The 2008 Recession characterized the childhood of a majority of this generation, which is one of the factors that makes them very savvy about money. Thirty-nine percent of respondents said that they would rather “save money than spend,” and 60 percent also regarded money as a sign of success as opposed to 44 percent of millennials who hold this view.

Moreover, the study also found that Gen Z also carries significantly more influence on household purchases than previous generations. Parents corroborated this finding too, with 93 percent of them saying that their children have at least some influence on their family’s spending and household purchases.

They also value the finer things in life: with 45 percent of them saying that they considered being well dressed synonymous with being successful and 32 percent also considering a nice car as a symbol of success.

“Gen Z is a big influence on what their parents are buying, especially in terms of food, technology and entertainment-related purchases,” said Jamie Gutfreund, CMO at Deep Focus. “They regard money and clothes as important signifiers of success not because they’re entitled, but because they are practical and are willing to work hard for them.”

They seek utility and quality.
Gen Z’s practical bent of mind extends to their expectations from brands, with 44 percent saying that they were not averse to advertising as long as it is relevant to them. Sixty percent of the respondents said that they seek cool products from a brand, whereas 40 percent sought cool experiences.

Interestingly, a majority sought some kind of utility from a brand, whether it involved helping them acquire a new skill or introduced them to new music or trends. Eight in 10 respondents said that they wanted their favorite brands to help them gain new skills — with the males wanting help with learning graphic design skills and females wanting help with making music. Additionally, 34 percent have tried to find music they’ve heard in an ad that they’ve liked, and 21 percent have tried games recommended by brands on social media.

“This generation is going to be much more expressive and will try to find new ways to stand out,” said Megan Hartman, strategy director at branding firm Red Peak. “For them, it is not about fitting in but being unique and different so brands need to push the boundaries and be more personalized.”

They don’t hate ads.
Good news for marketers: 55 percent of Gen Zs are captivated by and will stop and watch an ad if it is humorous. A sizeable 45 percent will also pay attention if an ad has great music, and 33 percent will value an ad if it is inspiring.

It seems that Gen Z inherits its love of good storytelling from the millennials, with 67 percent of the respondents saying that they are more interested in narratives and content that have realistic endings. Further, they are nearly twice as likely to want to see “real people” rather than celebrities endorse products and brands — good news for all the aspiring Michelle Phans and influencers on other platforms.

Gen Z is also more likely to visit YouTube than any other social site, with 85 percent declaring their preference for it, with 40 percent also saying that they would prefer interacting with their favorite brands on YouTube than any other platform.

“Gen Z is used to feasting on content regularly and this is the age group that has given rise to MCNs,” said Matt Smith of integrated TV platform Anvato. “Brands like Marriott that are creating specialized content already are the ones that will resonate with them.”