The U.S. is rapidly moving to a multicultural majority, already a reality for Gen Zers 18 and under. In fact, Gen Z commands a remarkable $143 billion (ages 7 to 21) in direct spending, plus up to an additional $333 billion in indirect spending influence within their families, according to a data analysis by Barkley. But this is a generation not easily wooed by traditional advertising and marketing. According to YPulse’s most recent Annual Advertising & Marketing Effectiveness Behavioral Report, 64 percent of Gen Zers believe that “brands don’t understand people my age,” up 11 points compared to a year ago.
So, what does work with this first multicultural majority generation? A recent study by the Hispanic Marketing Council (HMC) found that price point alone is not enough with 92 percent of Gen Zers and their parents, who agreed that one or more things matter more than price. Brand trust and style were most important to young Gen Zers.
What builds trust with Gen Z? Consistent positive interactions with the brand coupled with shared values rose to the top as trust builders. The shared values most documented in HMC’s study were dedication to no animal testing/cruelty to animals, sustainability, and reducing gun violence. For non-Hispanic Blacks and Hispanics, a shared dedication against hate & racism was also a top value. Kantar research has found that acting responsibly was the single largest influence on a brand’s reputation to the tune of 49 percent, and YPulse states that Gen Z is less likely than Millennials to “respond to marketing overall” with one exception: “ads that speak to a brand’s values and what they are doing to make the world a better place.”
For example, HMC’s study found that many 13- to 17-year-olds were aware of Walmart (58%) & Dick’s Sporting Goods (46%) amended gun policies to no longer sell certain types of ammunition and assault weapons during the research 2020 field period. Among those that were aware, the majority (56%) said they would be more likely to shop these retailers due to their new policies addressing gun violence. There were, however, cultural nuances in play—nuances marketers should understand with a multicultural majority generation. A significant majority (67%) of non-Hispanic Blacks and Hispanics said they would be more likely to continue to shop there, while less than half (47%) of non-Hispanic Whites concurred.
Who Gen Zers trust is also important. HMC found that 55 percent of Hispanics ages 13 to 17 trusted the endorsement of a celebrity or social media influencer over a traditional ad, compared to 37 percent for non-Hispanics. When they knew that the endorsement was unpaid, percentages grew to 69 percent for Hispanics and 52 percent for non-Hispanics trusting the influencer more than a traditional ad. YPulse also found that many Gen Zers are looking for greater authenticity from advertising with 67 percent saying that most brands “over-shop their images” and 52 percent saying that brands using Photoshop is a “negative thing.”
Style is a tremendously important value for Gen Zers. It can even override other important Gen Z values, such as sustainability. It may spur some Gen Z guilt, but “fast fashion” retailers such as Shein, Zara, Asos and Fashion Nova have enticed teens with disposable fashion at low prices using a mix of pop culture celebrities like Cardi B, leading online fashion and lifestyle influencers, and a virtual army of unpaid content creators, mostly on Instagram. Fashion Nova truly stands out among multicultural women. According to Refinery 29, “Fashion Nova cracked the code” due to “its influencer network…a demographic of people often systematically excluded from the fashion industry—more often than not, women of color.”
Fashion & lifestyle (F&L) as a category can be an obsession with Gen Z, much as technology was for Millennials and Gen X. Gen Z is quick to share whether they are a Nike or Vans aficionado, but unlike Millennials who declared their allegiance to Android or iPhone in an adversarial way, whatever you choose is “all good” with Gen Zers.
Value Bundling and Ranking
Brands can intensify their popularity by bundling key customer values. For example, the thrifting trend popular with 72 percent of Gen Zers 13 to 17 years-old bundles price with style and sustainability. This layering of values can be extremely powerful, more than any one value on its own. Fast fashion bundles price with style and ditches the sustainability. Among those that opt for fast fashion, sustainability ranks as a tertiary, less important value than price and style.
Marketers need to understand the best “value” bundle for their targets and the hierarchy of each value within the bundle as well. They also must understand that values may differ in strength by race and ethnicity as culture enters the value equation.
With culture at the heart of many purchase decisions and behaviors, it is essential and long overdue for many marketers to invest in cultural specialists for their marketing teams to both protect and optimize brands for mainstream and segmented marketing efforts alike. Gen Z marketing must shift to recognize the multicultural majority population of Gen Z and their massive spending power (both direct and influenced)—in fact, any brand who is targeting a multicultural majority demographic should have multicultural agencies at the table from the start. The days of “general market” agencies setting the strategy with multicultural agencies as translators or niche marketers are over. Today, there is high demand for specialists who understand the Gen Z tendency to prefer brands that gain their trust via shared values, how “style” rules, and the value bundles that work best for your brand or service.