Gen Z, the generation born between 1997 and 2012, represents a significant and influential consumer group. Their unique characteristics and behaviors are reshaping how businesses approach marketing and product development. Understanding what drives Gen Z is crucial for brands aiming to capture their attention and loyalty.
Gen Z consumer behavior trends
- Digital influence
Gen Z heavily relies on social media platforms like TikTok, Instagram, and YouTube for discovering new products and making purchasing decisions. According to Hubspot’s report, about 71% of Gen Z discover new products on social media, with short-form videos being particularly influential.
- Social media as search engines
Platforms like TikTok and Instagram are becoming primary search engines for Gen Z, overtaking traditional search engines like Google.
- Customization and personalization
This generation values personalized experiences and products. Business Wire states that 75% of Gen Z is more likely to purchase items they can customize, reflecting their desire for individuality.
- Financial prudence and BNPL services
Buy Now, Pay Later (BNPL) services are popular among Gen Z. They prefer waiting for sales before making purchases, indicating a strategic approach to spending.
- Importance of inclusivity and diversity
Gen Z expects brands to be inclusive and diverse in their messaging and offerings. Brands that promote and practice inclusivity can build stronger connections with this generation.
- Nostalgia and trend revival
There is a significant revival of early 2000s trends, including fashion items like low-rise jeans and vintage tech such as flip phones. Apps like Depop, popular among Gen Z for second-hand shopping, reflect this nostalgic trend.
- Mental health and social justice
Mental health and social justice issues are significant to Gen Z consumers. According to the International Council of Shopping Center, Gen Z wants brands to support mental health initiatives, and many prioritize brands that align with their social values.
Case studies from leading startups
1. Alinea: Investment for the next generation
Alinea Invest is an investing app that makes money management more accessible to Gen Z and women. The company is doing this by offering an AI-powered money manager through Alinea Strategies and self-directed investing through playlists. Alinea's audience consists of 72% Gen Z, primarily female, and first-time investors in big cities.
Communication strategy
Alinea uses TikTok and Instagram for top-of-funnel engagement, creating short-form content through influencers. One of the company's best-performing videos on TikTok talks about how the founders turned their college classroom idea into Alinea. The video has gained over 480K views.
They explain investment concepts in a simplified, relatable manner using the "time machine" concept. “The time machine concept essentially shows you how much you would have made if you invested in a stock or playlist a certain number of years ago,” said Anam Lakhani, Co-founder and co-CEO of Alinea.
User experience tailored for Gen Z
The competition to win Gen Z’s attention is heating up, as Gen Z is constantly distracted by information from diverse channels. "Gen Z consumers have a higher bar for customer experience," said Anam. This is put into consideration of all aspects of Alinea’s product design, as the team focuses on authenticity and simplified user experience. .
For instance, Alinea’s app features a peaceful color palette and a single-tab, one-click process. The onboarding process on the app is fully customized, offering users daily updates and personalized guidance.
Meanwhile, Alinea is continually enhancing its product offerings to address higher customer expectations. The team recently introduced an AI voice assistant to guide users through onboarding, providing personalized investment plans.
2. Merazine: Social fashion discovery
Merazine is an all-in-one fashion platform that delivers personalized and smart recommendations for Gen Z. Merazine targets fashion-forward Gen Z women aged 18-25 who spend a significant portion of their disposable income on clothing.
Communication strategy
“Gen Z is chronically online: it’s how they express themselves, connect with others, and get information,” said Krithy Reddy, Co-Founder of Merazine. “They push back against ads and sponsored content.”
Merazine portrays itself as a relatable creator, posting organic content on TikTok and Instagram. The team engages its audience with vlogs, trends, and stories rather than traditional ads, capitalizing on their background as content creators.
Creating a journey of self-exploration and self-expression
“Many believe the ultimate online shopping experience is simply getting consumers to buy products as fast as possible. However, for Gen Z and fashion, that’s not enough,” said Krithy. “Gen Z values the journey and exploration involved in finding fashion that resonates with their identity. It’s the generation that cares the most about self-expression through clothing.”
With a deep understanding of Gen Z’s needs of self-expression, Merazine prioritizes innovative and interactive content. The team integrates elements that enhance user engagement and make the shopping experience enjoyable. They focus on creating a community-driven experience with challenges, avatars, friends, points, and streaks, rather than solely relying on AI for recommendations.
3. Amori: AI Dating Coach
Amori is an AI dating coach app that analyzes users’ conversations for personalized dating insights and matchmaking. Amori's audience ranges from ages 19-45, with a focus on Gen Z.
Communication strategy
Similar to Alinea and Merazine, social media is the main communication channel for Amori. Amori reaches Gen Z through relatable TikTok videos and funny Instagram memes, leveraging the humor and relatability that appeal to this demographic.
Providing value through AI
“Gen Z is more open-minded about sharing their data if it solves a big problem for them,” said Alex Weitzman, Founder and CEO at Amori. “Gen Z audiences are also more open to societal change influenced by AI.” This allows new product opportunities that are more likely accepted by Gen Z compared to older generations. Amori leverages this by offering personalized dating insights and matchmaking through AI.
Key takeaways for brands
- Be authentic
Gen Z values authenticity and transparency. Brands should focus on genuine interactions and ethical practices to build trust and loyalty.
- Engage on social media
Utilize platforms like TikTok and Instagram to reach and engage Gen Z. Create relatable, short-form content that resonates with their interests and behaviors.
- Personalize the experience
Offer personalized products, services, and communication to meet the high expectations of Gen Z consumers. Customization and relevance are key.
- Focus on values
Highlight your brand’s commitment to social and environmental issues. This generation is more likely to support brands that align with their values and demonstrate a genuine commitment to making a positive impact.
- Innovate with technology
Incorporate AI, AR, and VR to create immersive and interactive experiences. Leveraging technology can enhance engagement and differentiate your brand in the competitive market.
Conclusion
Connecting with Gen Z is not just about understanding their preferences—it's about actively engaging with them on their terms. This generation expects more than just a transactional relationship with brands; they seek meaningful interactions and experiences that align with their values and lifestyle.
As digital natives, they navigate the online world with ease, using social media not just for entertainment but as a tool for discovery, self-expression, and community building. Brands must be agile, ready to adapt to the fast-paced, ever-evolving digital landscape, and capable of delivering authentic, personalized experiences.
Moreover, the rise of AI in marketing offers opportunities to create hyper-personalized experiences, but it also requires brands to be vigilant in maintaining trust. By leveraging technology responsibly and creatively, businesses can not only meet but exceed Gen Z's high expectations.
As this generation continues to grow in purchasing power, their influence will only expand, shaping the future of consumerism. To succeed, it’s not enough to follow trends—brands must anticipate them, leading with innovation, empathy, and a deep understanding of what truly matters to Gen Z.
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