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The expanding purchasing influence of Generation Z

Brands must engage, co-create, provide quality products and services, and be clear about what they stand for.

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Born in the mid-1990s and beyond, Generation Z is estimated to encompass more than 2 billion young people.¹ Gen Zers don’t know a time without the internet, apps, or instant communication to an extended network of opinion-influencing peers. As they transcend from adolescence to adulthood, they are beginning to wield an influence on purchasing disproportionate to their ages and personal wealth.

To better understand how they prefer to engage with brands and prioritize purchase decisions today, the IBM Institute for Business Value (IBV) conducted a global survey of 15,600 Gen Zers between the ages of 13 and 21, as well as interviews with 20 senior executives.

This executive report, developed in collaboration with the National Retail Federation (NRF) and the second in a series of three, found these distinguishing characteristics that separate Gen Zers from previous generations:

• Gen Zers are both practical and skeptical. After all, Gen Zers are growing up at a time when “alternative facts” has become a newsworthy phrase, and their familiarity with technology means they are not easily fooled.

• One size does not fit all. On the surface, Gen Z is one connected community with similar habits, but technology has provided a vehicle for Gen Zers to interact with brands on their own terms.

• Technology has made Gen Zers into brand enthusiasts, but not all display the same level of enthusiasm.² They are less likely than other generations to be brand loyal as traditionally defined.

This paper explores these characteristics in greater depth and provides three detailed recommendations to help you move forward.

¹ “Gen Z and Gen Alpha Infographic Update.” The McCrindle blog. February 4, 2015. http://mccrindle.com.au/the-mccrindle-blog/gen-z-and-gen-alpha-infographic-update.; “Generation X vs. Y vs. Z Workplace Edition.” NextGeneration website. September 10, 2015. http://www.nextgeneration.ie/generation-x-vs-y-vs-z-workplace-edition/.; Rehman, Asad Ur. “Generation Gap at Workplace & its effect on Organizational Performance.” February 23, 2015. https://www.linkedin.com/pulse/generation-gap-workplace-its-effect-organizational-asad-ur-rehman.

² Chen Davidson, Julia, Trevor Davis, and Anthony Bigornia. “Brand enthusiasm: More than loyalty—How today’s consumers want to engage with your brand.” IBM Institute for Business Value. November 2014. https://www.ibm.com/services/us/gbs/thoughtleadership/brandenthusiasm/

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Meet the authors

Trevor Davis

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, Consumer Products Industry Expert and Futurist

Eva Heukaeufer

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, Strategy Consultant at IBM iX

Jane Cheung

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, Consumer Industry Research Lead, IBM Institute for Business Value

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