Gen Z have grown up over the past 25 years – the oldest within the cohort are now financially independent. It’s easy to see this as a single moment when young people suddenly start swiping their credit cards left, right and centre. But their route to harnessing their spending power is actually much more gradual…
So, what is the Gen Z age range?
Nestled comfortably between Millennials (1980-1994) and Gen Alpha (Post-2010), Gen Z have their birthdays between 1995 and 2010. This encompasses children as young as 10 and adults up to 25 years old.
As you can imagine, a 25-year-old graduate is going to have very different shopping intent to a 16-year-old sixth form student. Younger Gen Z kids might own tech, clothing and toys, but they are less likely to have their own budget than the older cohorts of Gen Z. Understanding when young people do start shopping for themselves is crucial to honing in on your key demographic.
For the majority of Gen Z, financial independence is tied to key education milestones. Whether they get a part-time job while still at sixth form, or start budgeting on a termly basis based on loan drops at uni, these are the first times that young people are in control of their own spending. But what exactly are they buying – and when?
Tech and Mobile
As Gen Z have grown up, the digital world has evolved around them. Younger members of Gen Z will likely have had a smartphone or laptop bought for them by parents to aid their education and provide entertainment.
For Gen Z, smartphone ownership comes early. By sixth form, 93% of students own a smartphone, with a small increase to 97% among uni students. This indicates that you should be putting smartphone deals in front of Gen Z from an early age – by the time they’re ready to spend their own money on this, they’ll have a clear idea of what they’re looking for and what price they’re willing to pay. If you’re creating smartphone campaigns purely for uni students, it might be worth introducing a specific campaign for 16-18-year-olds, who have different needs and budgets.
Laptops are another key staple in any Gen Z’s purchasing journey. As it’s a big investment purchase, many will opt to buy their laptop when they head off to uni. 80% of sixth form students own a laptop, indicating that it’s a popular tech purchase among younger students too, but by the time they get to university, 96% of students will have picked up a laptop. This could be one of the first big investments a young person makes: focusing on key campaign events that fall early in the academic year, like Freshers and Black Friday, will put your brand on the map.
Rent and Bills
A key marker of independence for Gen Z is when they get their first space to call their own – whether this is a shared student flat or a privately-rented space. Like Millennials before them, Gen Z are less likely than their predecessors to buy a home during or straight after leaving the family home.
Rent and bills factor for over a quarter (27%) of UK university students’ monthly outgoings – a massive hike on what younger sixth-form students are paying in this area – 7%. It’s likely that students still living at home won’t have to grapple with rent and utilities, but given that the majority of sixth-form students own a smartphone, their phone plan might account for their monthly outgoings in this area.
Groceries, too, will factor into Gen Z spending for the first time. In sixth form, 12% of their monthly spending goes towards groceries – a sign that 16-18-year olds are starting to budget for some of their own meals independently of their families. For uni students, this rises to 20% as they start to purchase groceries on a regular basis. So while the weekly food shop truly takes off when students go to uni, they will start to build up brand loyalty – and get a sense for their likes and dislikes – at an earlier stage.
UK students may inherit the responsibility of rent and other essential outgoings when they head off to uni – but with this comes regular loan drops. While they are paying more towards rent and bills, they also have more budget than ever before.
As students start paying rent and bills, you can expect their interest in discounted wifi and utilities to rise. This is also the point where you can start marketing homewares to them, as they will begin to consider how to decorate their space for the first time.
When it comes to going out and drinking, students have a bit of a long-standing reputation. But as Gen Z arrive at university, it’s time to forget everything you know about uni binge culture. 30% of 16-24-year-olds say that they drink every week – but almost as many (25%) say that they never drink.
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Get to know Gen Z better. The Youth Trends Report 2020 has landed – download it today.