It's a tale as old as time: As a new generation gains ground in the workforce, the status quo gets flipped on its head. We saw it with millennials in the 2010s, and now we're seeing it again as Gen Zers are building their portfolios, opening their own businesses, leading companies and starting to reimagine the future of work as a whole.
Gen Z is quickly gaining ground in the workforce and economy, and it can be a struggle for brands to keep up. To better understand this ever-evolving demographic, Epsilon conducted a cross-generational research study, capturing preferences from more than 2,500 consumers across the U.S.
Our research breaks the Gen Z demographic into two segments, Gen Z minors (13- to 17-year-olds) and Gen Z adults (18- to 26-year-olds). Gen Z minors were recruited through Dynata Inc. with consent from their parents or grandparents.
In the survey, we asked respondents questions about how they consume media, what their purchasing behavior has looked like in the past year, how they use electronic devices, and how they feel about AI, brand loyalty preferences and more.
“Looking at customers and prospects by generation is a simple way to get a deeper understanding of consumers beyond what they are buying and uncover differences in behaviors, engagement, preferences and motivators," said Gillian MacPherson, Vice President of Product at Epsilon. "Starting to segment by generation lays the groundwork to have a better view of each individual, allowing you to reach them with an impactful message that resonates in the channels they use."
Our research shows that while Gen Z consumers are more adept at technology than their elders, they still respond to traditional shopping experiences, like in-store offerings.
Gen Zs grew up fully immersed in the internet. IDEO Journal put it best: "Screenagers. Digital natives. The TikTok generation. It's hard to find an epithet for those born between the mid-1990s and early 2010s—aka Gen Z—that doesn’t call out a dependency on technology."
McKinsey adds, "[Gen Zs] often turn to the internet when looking for any kind of information, including news and reviews prior to making a purchase. They flit between sites, apps and social media feeds, each one forming a different part of their online ecosystem."
When it comes to what device they’re using to shop, Epsilon research shows that 86% of Gen Z adults use their smartphones, but the device of choice shifts a bit when we look at how this demographic watches TV and streams content.
"These days, it's clear consumers are sharing their attention across multiple screens," says Shannon Fazendin, Director of Client Management at Epsilon. In a recent webinar with Samsung Ads, Fazendin outlined a report that examined device usage across generations. "What’s interesting is that, while most people identified their large-format television as the primary screen, Gen Z is where we see a shift, with a higher distribution identifying their phone as the primary screen and TV as the secondary," Fazendin says.
This shift is visible in Epsilon's research too: Sixty five percent of Gen Z minors and 46% of Gen Z adults stream content on a TV, but 24% of Gen Z adults use their smartphone most often to stream content, compared to only 15% of millennials (and the percentage drops even further for Gen Xers and boomers).
This makes sense when we consider that 31% of Gen Zs live at home or with roommates, so using their smartphones gives them more autonomy over what they’re watching and they can watch while they’re on the go. They're also just more comfortable using emerging technology, so they're not afraid to download a new app.
It's worth noting that Gen Z minors are also more likely to use streaming services (49%) than traditional TV (34%) to watch shows, movies, sports or news, but because minors are probably not the account holders for cable and/or streaming, it's hard to determine whether this behavior is intentional.
The takeaway: It's key for marketers and brands to personalize ads for younger generations and ensure they're optimized for mobile experiences. They also need to avoid oversaturating multiple channels with the same messaging.
Despite having such a large digital footprint, Gen Zs still yearn for in-person connection. “They’re not looking to hide behind screens; they’re actively seeking opportunities to build interpersonal skills and meaningful professional relationships. This generation has a sophisticated understanding of when technology helps and when it hinders real connection,” Janet Dell, the CEO of Freeman, an event marketing company, told CNBC.
We see that trend carry over for shopping preferences, too, as 31% of Gen Z minors and 26% of Gen Z adults see shopping as a social activity—higher than any other generation. This is likely due to the fact that third places are disappearing at an increasing rate and most nightlife options don't cater to minors or adults under the age of 21.
“Time and again, the emotional value of digital experiences is reinforced by authenticity, inclusivity and sustainability carries over into the physical world with predisposed beliefs about what a brand (and its chosen influencers) stands for. The key is getting a mix that speaks both to product utility and brand values, where physical and digital can meet," says Kevin Mabley, Epsilon's Managing Director of Strategic Consulting and Services.
The takeaway: Don't dismiss in-person events or providing bespoke opportunities for younger generations to touch and interact with physical products. In-person activations can provide a meaningful touchpoint for your audience to engage with your brand.
While inflation and rising prices continue to ripple across the country, 28% of Gen Z adults note that their financial situation has improved in the past year. This is likely due to more Gen Zs entering the workforce (by 2030, Gen Zs are expected to make up 30% of the workforce) and seeing their income and purchasing power increase as a result.
That being said, 76% of Gen Z adults said they're looking for sales, deals and discounts and more than half are shopping at less-expensive stores to combat the impacts of rising costs and inflation.
"The younger generation still wants to flourish," says Mark Beal, assistant professor at the Rutgers University School of Communication and Information, in a July 2024 article for BBC. "Gen Z does have financial goals. They are earning money. They are saving money. They are investing money. Some have already purchased homes. They're just approaching [goals] differently. It's not quite as structured and rigid as previous generations—those of us who thought, 'By the time I'm 30, I need a house with a white picket fence.'"
The takeaway: While inflation is less of a concern for this generation, they're still prioritizing deals and discounts and trying to keep costs low, so marketers and retailers need to keep price in mind when targeting this audience.
AI usage is more common among younger generations. In our research, 32% of Gen Z minors and 36% of Gen Z adults said they use it every day. More than half of Gen Z minors agree that using AI saves time (the top reason mentioned for using AI overall), while 30% of Gen Z adults enjoy using AI because it gives them new ideas and perspectives.
"Gen Z offers brands short bursts of attention to capture interest before quickly moving on. Personalization is table-stakes, but entertainment must also be part of the mix," Mabley says. "Brands can use Gen Z's comfortability with AI technology and data sharing to their advantage when recommending products, timing or sequencing offers and tweaking the exposure environment based on what top-tier customers have engaged with in the past. Without using that data, brands experience what we call the 'opportunity cost of irrelevance,' where users immediately disengage with inconsistent content, expecting their beloved brands to at least know who they are and what they want."
Gen Zs might have fewer concerns about the technology than other generations, but 15% of Gen Z minors and 35% of Gen Z adults are worried about privacy and data security. Eight percent of Gen Z minors and 25% of Gen Z adults also said they're concerned about losing jobs to AI.
At work, 32% of Gen Z adults say they use AI tools or technology for professional tasks. The percentage is the same for millennials but dips to 19% for Gen Xers and 7% for boomers.
“Missing out on in-person interactions on campus and at work, [Gen Z] immersed themselves in screens, feeds and technology,” researchers at TalentLMS wrote in a July 2024 study. “So when AI showed up, they embraced it. For Gen Z, AI isn’t just a new tech tool. It’s their 24/7 sidekick, helping them navigate work and life.”
The takeaway: Don't be afraid to test emerging channels, trends and technology when trying to reach younger audiences. As AI takes on more prominence in the workplace, companies will need to update policies, infrastructure and processes to meet the demands of the new workforce.
As the Gen Z consumer base continues to grow, brands need to find unique way to meet them where they're at. To help you reach Gen Z consumers and prospects with the right message at the right time, Epsilon's complete foundational data can help you stay connected.
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