Rakuten Insight and Rakuten Europe team up to look at how companies and brands can build ad strategies that connect with Gen Z.
There’s no doubt that Gen Z is making its influence felt in the digital world. But what do we know about this rising generation of consumers?
According to demographic researchers, including Pew Research Center, Generation Z (in short: Gen Z) consists of people born between 1997 and 2012. Gen Z follows Millennials (people born between 1981 and 1996) and precedes Generation Alpha.
In collaboration with Rakuten Insight, Rakuten Europe recently conducted an online survey among 1,800 respondents between the ages of 16 and 25 in France, Germany, Spain, Japan, the U.K. and the U.S. to find out more about the generation’s shopping behaviors, brand preferences and other consumer trends.
Gen Z is changing the game
Gen Z are the world’s first true digital natives, a group exposed to the internet, social networks and mobile systems from their earliest years. It is not surprising then that this group conducts thorough research online before making a purchase. More than 50% of respondents indicated they primarily rely on a brand’s website to research products or services before making a purchase, compared to almost 40% who looked at online reviews and 29% who took to social media.
Gen Z respondents also proved to be cost-conscious, with 90% of the generation comparing prices before making a purchase, noting that price is one of the main determining factors when buying online. Even more importantly, great design and product durability were seen as the top deciding factors Gen Z considered before pulling the trigger on a purchase.
While it may come as a surprise to some, these same digital natives are eager to leave the internet for IRL (in real life) shopping. Almost half of the respondents mentioned preferring to shop offline in physical retail stores.
Gen Z might prefer to go shopping in the “real world,” but respondents admitted to being swayed by a number of digital advertising formats. The most effective advertisement formats were Social Media ads (69%), followed by TV Ads (49%) and Online Display Ads (32%). Cinema Ads (20%) and Out-of-Home Ads (32%) were deemed the least effective to reach Gen Z, while Radio Ads, Print Ads and Newsletters were seen as least authentic.
When asked about the design of ads, those surveyed answered that successful ads create a connection to their audience by being educational or presenting facts, creating an emotional connection, or collaborating with celebrities and trusted influencers.
It’s well known that influencers have an outsized impact on the digital life of Gen Z. According to a 2022 survey from Higher Visibility, one in four members of Gen Z aspire to have careers as influencers, and the amount of those who follow influencers is even higher.
Results of the Influencer Report by Morning Consult show that nearly two-thirds of Gen Z follow a variety of influencers, and 50% say that they trust their recommendations. However, when it comes to the type of influencers they trust to make purchases, relatable creators and micro-influencers were selected over big-name celebrities.
Rakuten Insight’s study found that the most valued qualities in an influencer were honesty (64%), followed by someone who is engaging (38%) and entertaining (33%). Lesser important traits: Being responsive, humble, or consistent in messaging.
The significance of sustainability
Is sustainable shopping really increasing in popularity among younger generations? To 69% of the Gen Z respondents, sustainable shopping is indeed relevant. But it is not a top priority when buying a product. Price (92%), Quality (89%) and Design (69%) ranked highest as deciding factors.
The study also looked at the connection between social responsibility perspectives and consumer behavior. Gen Z is known to be one of the most racially and ethnically diverse generations, and due to the COVID-19 pandemic, as well as a range of socioeconomic uncertainties, Gen Z is looking ahead to a more uncertain future than many previous generations. According to the Annie E. Casey Foundation, Gen Z’ers are more socially minded than previous generations and focus on seven key issues: healthcare, mental health, higher education, economic security, civic engagement, race equity and the environment.
88% of those surveyed responded that they find it important that brands care for social issues. Contribution from brands can be achieved through donating to charities, public statements about purpose and ethics, and inclusive marketing. But when making purchasing decisions, differing ethical values don’t stop Gen Z from shopping: 67% reported that they would buy from brands that have different values from theirs.
At the same time, trends show that the demand for taking action around social and environmental causes is increasing, something that will continue to be a crucial point for young consumers and the brands they buy from alike.