The average young consumer is constantly toggling between their phone and other screens while managing various work and social apps, multiple media streaming services and dozens of notifications an hour. Even carefully crafted marketing signals get lost in the stream of their everyday lives.
Still, digitally native generations — Gen Z and Millennials — are coveted by marketers even as they’re broadly maligned, accused of endangering all kinds of things beloved by older generations (from department stores to bar soap). While widely recognized for bucking established mores, next-gen consumers are also bringing back various lo-fi technologies, such as vinyl LPs and record players, as The Wall Street Journal pointed out recently. Taken together or separately, they’re tough nuts to crack for marketers.
So, who are we talking about here? There are differing age-span definitions of these generations, but the Pew Research Centerbrackets Millennials as people born between 1981 and 1996, with Gen Z starting in 1997 and continuing through 2013. That said, as of 2023, Pew is shifting away from using generational labels. This signals a potential sea change for brands and marketers in their quest to define consumer groups, as outlined by Forbes.
No matter how the groups are defined, marketers are keen to connect with the next-gen audience, and for good reason: When demographics shift, so does spending power. Millennials alone are estimated to spend about $1.4 trillion annually.
Reaching them effectively begins with understanding their unique economic challenges, how (and why) they shop, plus the media that informs and motivates them — including one channel in particular that may surprise you.
Next-gen consumers are dogged by economic uncertainty
Many Millennials were in their early career stages or just hitting the job market when the Great Recession started in 2008. A decade-and-a-half of booms and busts, culminating in the COVID-19 pandemic, are the only reality Millennials and Gen Z have known. The Washington Post even dubbed Millennials “the unluckiest generation in U.S. history.” Gen Z, the eldest of whom at 26 are now starting careers, haven’t had it any better.
Buying habits — a cloudy crystal ball
These groups’ seemingly precarious financial situation has had difficult-to-parse impacts on spending habits. Overall, this cohort tends to spend more on online shopping, travel and conveniences such as food delivery than their older counterparts, while simultaneously spending less on cars, housing and their retirements, as reported in U.S. News & World Report in 2020.
- Millennials are also more likely to use mobile devices before they shop. A study by Forrester Research found that 62% of Millennials use their smartphones to research products before making a purchase, compared to 48% of Gen Xers and 37% of Baby Boomers.
- According to Quad Customer Focus® research in 2020, Gen Z influences the purchasing behavior of its parents and guardians, who “look to these digital natives for advice on technology and electronics.”
- Gen Z seems to be more attached to plastic when it comes to buying things. According to Bankrate, about half of Gen Zers between 18 and 25 in the U.S. use credit cards, compared to one-third of Millennials when they were that age.
- Gen Z tends to value experiences over material possessions. McKinsey & Company found that Gen Zers are more likely to spend money on a strong brand that has one of the following: an ESG proposition, a rewarding loyalty program, an emphasis on community.
Direct appeals are appealing
According to recent Quad research, younger generations are the most enthusiastic about the usefulness of direct marketing, with comparable numbers embracing direct mail, email and text messages.
For 18-34-year-olds:
- 57% said they found direct mail “extremely” or “very useful,” a total that grew to 85% when “somewhat useful” was included.
- 59% found texts “extremely” or “very useful,” a total that grew to 84% including “somewhat useful.”
- 67% said email was “extremely” or “very useful,” a total that grew to 90% when adding “somewhat useful.”
For 35-49-year-olds:
- 55% found direct mail “extremely” or “very useful,” a total that grew to 88% when “somewhat useful” was included.
- 55% found texts “extremely” or “very useful,” growing to 82% including “somewhat useful.”
- 64% said email was “extremely” or “very useful,” a total that grew to 88% when adding “somewhat useful.”
While Gen Zers and Millennials are notoriously very online, they have a real affinity for physical mail — and hold onto it deliberately. For example, 27% of 18-to-34-year-olds keep mail from retail stores for up to a week, and another 20% for one to two weeks. With automotive mail, 24% of that age cohort hold onto it for up to a week; 13% more keep it for one to two weeks.
The 35-49-year-old cohort is similarly enthusiastic.
Large percentages of both these groups reported feeling they got “the right amount” of direct mail, or even that the offers/information were “not frequent enough.
They had similar reactions to email communications.
Put the personal in personalization
Feeling “seen” is valued by next-gen consumers, and that makes personalization important. And personalization in this context means so much more than having an offer addressed to them by name; it involves creating highly tailored engagements that address a consumer’s specific needs, interests and values. This type of personalization is approaching table-stakes status. According to Twilio’s “State of Customer Engagement Report 2023,” 66% of consumers say they will quit a brand if their experience isn’t personalized, with 75% of Gen Z consumers saying personalization is the main factor for their continued engagement with a brand.
And keeping them in focus across their buying journey is another imperative. Today’s younger shoppers feel that it’s helpful to have a brand follow them across multiple channels and devices, with 55% of Gen Zers and 53% of Millennials finding a benefit from a seamless brand shopping experience, according to Quad research.
Goldilocks shoppers want online and offline to feel “just right”
Marketers have an array of media tools they can use to reach next-gen consumers. The challenge is to get the blend just right. Brands that lean too heavily on a digital-first approach for younger audiences are missing out on key nuances that can help them meet their KPIs.
Physical mail gives consumers a sense of control, and they can choose when to engage with it. But it’s not enough. Modern day marketers need to tie up loose ends, so a digital follow-up is key to reaching next-gen consumers. The most effective direct marketing strategy will include and coordinate both online and offline tactics. Finally, remember that authenticity, sustainability and personalization are key values for young consumers.
