Just as we have become confident in our ability to target and connect with Millennials, it is time for public relations professionals and the industries they represent to look to the future. Today, Generation Z (Zers), young people born between 1997 and 2015, outnumber both Baby Boomers and Millennials. Their size and economic capital mean that it is critical for brands to understand what this seismic demographic shift means for them.
In many ways Gen Z is an exacerbated type of Millennial — they are technological nativists obsessed with social media, who spend more time looking at memes than reading the news. But to assume that this affinity for technology automatically will result in the same consumer behaviors would mean that we fail to understand what truly motivates Gen Z. Given the number of Gen Zers set to enter the workforce in the coming years, they will likely constitute upwards 40% of all consumers and with a firm understanding of their outlook, there are key takeaways for real estate professionals to consider that will result in success.
As the real estate industry begins to think about how to best connect with and sell to Gen Z, it is crucial to understand the historical context in which Gen Z grew up. They have grown up in an unstable world, in which the economy continues to prove fragile. Success and the American Dream are not guaranteed.
The world Gen Zers were born into has baked cynicism into their DNA. Many watched their parents struggle to put food on the table during the Great Recession, and saw older siblings graduate college — buried in debt, without a job. According to a recent Fast Company article, this generation, “has been shaped by the recession and is prepared to fight hard to create a stable future for themselves,” making them far more risk-averse than generations past.
In the midst of this financial instability, Gen Z is also the first generation to be born in a time with social media and near-universal Internet access. Gen Z is also mobile and almost always online. According to Nielsen data, 96% of Gen Z own a smart phone and according to the Global Web Index, spend a daily average online time of over four hours. They are therefore the most tech-savvy generation, unlikely to be swayed by traditional marketing. Social media management company Hootsuite says over 85% use social media to learn about new products, while 88% say they regularly use Instagram and Snapchat, proof that they are moved primarily by visuals. Facebook, while still popular, is used far less frequently, while LinkedIn is largely a mystery. As a result, according to Forbes, Gen Zers have an incredibly short, eight-second attention span (four seconds shorter than Millennials), meaning brands have only a few seconds to capture their attention and sell them something. They are also experts at avoiding ads — with 69% of Gen Zers claiming that they like ads they can skip, according to CNBC. Given their tech-savvy and risk-aversion, it’s no wonder Gen Zers have far more conservative habits with their finances, compared to Millennials.
Gen Zers’ maturity with finances is clear with 21% starting savings accounts before age 10 according to Lincoln Financial Group. They seek out good deals and care more about utility than quality. Mic writes that this “is creating a major impact on brands … Gen Z would rather own something without the logo and spend less….” During the Great Recession of 2007-2009, millions watched as their most important investment plummeted in value overnight. Currently, only 65% of Americans own their own home, and, according to Pew Research, record numbers are now renting. For Gen Zers, however, their aspirations mirror the attitudes seen in their great-grandparents, who placed a high priority on owning a home.
MarketWatch reports that 97% of Gen Zers wish to own a home someday, and 82% believe that home ownership is a critical component of the American dream. This is in stark contrast of Millennials who were likely turned off from home ownership as they saw the impact of the Great Recession. Understanding that Gen Z is always connected and places a premium on good value, the real estate industry should continue expanding their use of social media to reach out to potential buyers. By using social media to show Gen Zers the life they could build for themselves, they will see even more success.
Gen Z shows similar trends when it comes to travel according to a recent study by Expedia Media Solutions. Gen Zers spend 29 days each year – a number likely to grow as Gen Z ages. They also spend a quarter of their budget on flights and prefer a good deal over a lavish hotel. 90 percent say their decisions are influenced by social media, and unlike millennials who seek comfort, Gen Zers want adventure on their vacation. In addition, over “63% of Gen Zers use their smartphones when looking for travel inspiration,” and they are the “most influenced by pictures posted by their friends on social media.” Once again, mastering social media is crucial to reaching Gen Z who want a visual representation of what can be.
Despite what we already know about them, most Gen Zers are still in their formative years, so there is still much that can happen before they become the world’s largest cohort of consumers. While the world they stand to inherit is far different than anything we’ve ever seen, 89% of them, according to MarketWatch, remain optimistic for the future, which for many includes owning a home. This should make real estate professionals excited for the future; they just need to remember they are dealing with the most well-educated, savvy consumer the world has ever seen. Dismissing them as just the next iteration of Millennials would be a mistake.