How Gen Z Relates To Brands

How Gen Z Relates To Brands and How They Will Disrupt Global Markets

Gen Z, the most disruptive generation, is set to outpace earnings of Millennial’s by 2031. Will world markets change as a result? Understanding how Gen Z relates to brands and technology is key to answering this fascinating question. RAVE breaks down the data and expert opinions below.

With economic uncertainty, impending recessions, and power struggles at home and abroad, it might surprise you that the youth and young adults born between 1995 and 2010 seem poised to excel financially–more so than other generations.

So much so that Millennials are predicted to lag behind by a significant margin, despite having more experience in the workforce. As a result, brands looking to tap into the serious spending power of Gen Z will need to identify and cater to their interests.

What factors explain the financial success of Gen Z? Does Gen Z relate to brands differently than Millennials? And how should brands react? Let’s dive in.

Table of Contents

How Gen Z Relate to Brands Infographic

How Gen Z Relates To Brands and How They Will Disrupt Global Markets - infographic
Infographic exploring data of how Gen Z relates to brands

Global Earnings of Gen Z

By 2031, Gen Z’s income will increase 5X (500%). This drastic rise in earnings will see Generation Z surpass the income of Millennials.

At this point, experts predict that Generation Z’s income will account for one quarter of all global income. If current trends continue, this will lead to Gen Z contributing a whopping $2 trillion to global earnings.

Why is this data so important?

Because Gen Z already has tremendous spending power–with $143 billion spent annually and an additional $127 billion spent on their behalf by family members each year. If they are also set to become the top-earning generation of the world, then the influence of their spending power will be irresistible.

Key takeaway: Generation Z already displays tremendous global spending power. As they become the top-earning generation, global markets will become increasingly beholden to their interests.

Where Does Gen Z Spend Their Money?

In the table below, we show how Generation Z spend their money–but more importantly how family contribute to these expenses.

The interesting point here is that members of Gen Z seem effective at swaying family spending, particularly in markets relating to fashion, popular culture, recreation and travel, food and beverages, and even household items.

Spend their own moneyInfluence family spending
Clothes and shoes55% 60%
Books and music52%41%
Apps52%20%
Toys and games50% 30%
Events and outings48%48%
Personal care43%55%
Electronics42% 61%
Eating out42%63%
Digital streaming37% 37%
Sports equipment31%47%
Food and beverages26% 77%
Travel26%66%
Household goods18%73%
Furniture16%76%
Table demonstrating influence of Gen Z on family spending

What does the data show? The data above shows that not only will Generation Z flex tremendous buying and spending power in the near future, but they also demonstrate the ability to influence family spending.

25 of Gen Z’s Favorite Brands

Unsurprisingly, Gen Z has been influenced by technology and corporate presence throughout their formative years. The advent of social media and immersive technology have conditioned them to appreciate technology brands and large corporations with clear utility or social preference.

  1. Google
  2. Netflix
  3. YouTube
  4. Amazon
  5. Oreo
  6. Playstation
  7. Walmart
  8. Target
  9. Doritos
  10. Nintendo
  11. Chick-fil-a
  12. Nike
  13. Marvel Studies
  14. Spotify
  15. Instagram
  16. Pizza Hut
  17. Sprite
  18. Dunkin’ Donuts
  19. Dollar Tree
  20. Skittles
  21. Subway
  22. Microsoft
  23. Dove
  24. Disney
  25. iHop

Key point: Generation Z loves convenience, smart home technology, and social participation. Fast food brands, movies, technology companies, popular apparel, and social media dominate their attention spans and massively influence brand favoritism.

Gen Z: Disruptive and Diverse

How Gen Z relates to brands

Gen Z is currently between the ages of 10 to 22 years old, having been born between 1995 and 2010. This generation encompasses more than 2 billion young people around the world–a figure that represents 40% of U.S. consumers.

Racial diversity is on the rise in Gen Z more than any other. Nearly half of Gen Z (48%) is non-white, much more than any other generation in history. There’s also a clear link to immigration.

Nearly 22% of Gen Z have at least one immigrant parent, as opposed to 14% of millennials. But one of the most surprising data points is just how well-positioned Gen Z is to participate in emerging markets.

A staggering 90% of Gen Z live in emerging markets, priming these young people to both influence and benefit from innovations. Though much of this figure results from 20% of Generation Z living in India, which has demonstrated explosive growth in its markets over recent decades.

Metrics of diversity span beyond race and culture though, as 1 in 5 Gen Z-ers identify as LGBT+. This represents a growth of more than 100% when compared to previous generations. Additionally, 35% of Generation Z personally know someone who prefers gender-neutral pronouns, compared to just 25% of Millennials.

And impressively, Gen Z is on track to be the best-educated generation. More than half of whom (57%) enroll in 2 or 4 year college, and 44% live with a college-educated parent.

How does diversity of Gen Z impact their spending? Despite their spending power and influence over family spending, only 36% Gen Z say that they have a strong connection or loyalty to brands.

How Values Influence Spending of Generation Z

Trust is among the most important values in Generation Z. And their trust in politics and big business is on a steep decline.

In 2020 alone, only 46% Generation Z trusted major institutions–down from 56% the prior year. The largest declines resulted from increasing distrust towards the following:

  • Police
  • US Government
  • Criminal Justice System
  • News Media

Because of the increasing distrust of new media, Gen Z gets much of their news from social media. Nearly half of Gen Z (49%) get their news from social media, while only 17% of older adults get their news this way.

42% of adults get their news from television, while only 12% of Gen Z watch television for news.

Gen Z’s desire to trust is also apparent in how they research products, as 65% will research a product’s origins before purchasing it. These are three major questions that they ask:

  • Where was it made?
  • What was it made from?
  • How was it made?

But Gen Z seem to trust their friends more than any other source, as 63% report trusting a friend’s recommendation more than any other kind.

Key Points: Values of trust are of central importance to Gen Z, who are rapidly becoming distrustful of big institutions. As a result they carefully research products, and seek the council of close friends.

Brand Values Drive Gen Z Purchases

How Gen Z relates to brands

A brand that successfully signals the right core values will win big in the eyes of Gen Z, who prefer brands that promote these values:

  • Sustainable business practices: 92%
  • Affordability: 91%
  • Ethical business practices: 90%
  • Inclusivity: 87%
  • Overall shared principles: 86%

Each of these brand values can impact Gen Z purchasing behavior.

Sustainability

Generation Z will go above and beyond to support brands that they perceive as being sustainably conscious.

73% of Gen Z consumers surveyed were willing to pay more for sustainable products, more than any other generation. 54% say they would pay more than a 10% increase in price for a sustainably made product.

More than 1 in 4 say they consider the environmental impact of a business before purchasing.

Ethics

On the other hand, Gen Z seems highly motivated to punish brands that they deem as unethical. A vast majority (80%) will refuse to buy goods from companies involved in scandals.

And moreover, Gen Z will actively stop buying from companies and spread criticism about them if they display any of these ethical issues:

  • Macho: 81%
  • Racist: 79%
  • Homophobic: 76%

Brands displaying these ethical deficiencies will be quickly abandoned by many Gen Z-ers and may even see active resistance or protest.

Inclusion

While less impactful by comparison to ethics and sustainability, a majority of Gen Z (51%) reports valuing inclusivity–51% of students want brands to support wider inclusivity initiatives.

As a result, 49% are willing to purchase from a brand that has more inclusive marketing.

While 44% of millennials want brands to include more diverse casting and imagery, 51% of Gen Z-ers want these signals of inclusivity. While 44% of millennials want more diversity in leadership positions, 53% of Gen Z believes it’s important.

The numbers skew towards an even wider divide when discussing fashion.

  • 87% of Gen Z believe strongly there should be better gender equality and inclusion within fashion.
  • 65% say brands could improve the online retail experience by letting them search for “gender neutral” clothing, without being forced to search “men’s” or “women’s” from the beginning.
  • 59% believe online forms and profiles should include non-binary gender options, compared to less than half of Millennials.

Who are the most inclusive brands according to Gen Z? According to Gen Z, Nike, Asos, Old Navy are leading brand on inclusivity and challenging gender stereotypes.

Generation Z and Mobile-First Marketing

How Gen Z relates to brands
Asian young woman working laptop. Business woman busy typing on laptop computer at office in the city.

In the United States, nearly half of teens are online “almost constantly” — spending more than 10 hours a day on their mobile devices. But where are they spending all that time?

It might not be where you would think. In 2020, younger audiences began to leave large social media platforms, opting instead to huddle around smaller ‘digital campfires.’ In other words, Gen Z treats online social media much like older generations treat local shows and events.

They wait until a social media event matches their tastes, and then they jump in. The best examples of these ‘digital campfires’ were the following cultural moments that established this trend:

  • 5 concerts by hip-hop artist Travis Scott inside the game Fortnite in April was attended by more than 27 million players.
  • A 2-day November performance from rapper Lil Nas X on the gaming platform Roblox garnered more than 33 million views.
  • More than 400,000 users watched a live stream of Rep. Alexandria Ocasio-Cortez (D-NY) playing the video game Among Us on Twitch in October.

Gen Z’s Favorite Alternative Platforms

Gen Z spends more time on alternative platforms than they do on the world’s most popular ones. So what are they using? Primarily, there favorites include these five platforms:

  1. TikTok
  2. Fortnite
  3. Roblox
  4. Discord
  5. Twitch.

The behavior patterns surrounding the use of these platforms is nothing short of ravenous among Gen Z:

  • 20% of Gen Zers spend 5+ hours per day on TikTok alone.
  • 66% of Gen Z use instagram — vs 40% of Millennials.
  • Gen Zers are 2X as likely as Millennials to use Snapchat.
  • 85% of Gen Zers visit YouTube more than any other social site.
  • Close to 80% use Discord for non-gaming or a combination of gaming and non-gaming content.

One interesting data point on the matter demonstrates that Gen Z actively grooms social media advertisements so that they see more of what they like. Specifically, 46% of college students purposefully like, comment on, or share content to “train the algorithms” to give them the content that they’re after

Conclusions: Because 2 in 3 Gen Z-ers are interested in purchasing through social media directly, brands should invest in reaching them where they spend their most time. And should create advertisements that facilitate likes, comments, and sharing among Gen Z.

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Jack Kelle

Jack is an entrepreneur, outdoorist, and animal lover with a background in philosophy, psychology, and business. He enjoys music, friends, and family. At RAVE, Jack works as the manager of marketing and content development.