For some years now, Generation Z has occupied the efforts and ambitions of brands globally. That’s because they are the ones now building financial independence, shaping the job market, influencing spending, and building relationships with brands that could last for decades. But are they really that different from previous generations?

That is what GWI has analyzed in an analysis titled “Does GenZ really exist?” (Does Generation Z really exist?) and which takes as a reference the periodic surveys that the company carries out with thousands of individuals between 16 and 64 years old in 53 markets globally.

In it, he points out that Generation Z is the one that is attracting the most attention from advertisers, mainly because its purchasing power is expected to reach 12.6 trillion dollars, more than the combined GDP of Germany, Japan and Canada. It is also the generation that is leading trends, including the adoption of artificial intelligence. And 40% of Generation Z uses AI to learn or improve skills, compared to 32% of Millennials or 25% of Generation X.
In addition, it is the most active generation on social networks, with 48% of its members saying they search for brands, products and services on these channels, compared to 21% of Boomers.

Is Generation Z so different?

Its commercial and social relevance may lead many professionals to treat a broad population label as a clear target audience strategy. That is, the label can make a vast and diverse population seem simpler than it really is. And you may also look significantly different from previous generations depending on which group you compare yourself to.

For example, if the use of the mobile phone is analyzed, 86% of Generation Z say that it is the most important device of all, exactly the same percentage as millennials, and not far from Generation X (82%). The figure, however, is far from 58% of baby boomers. Something similar happens when the interest in healthy food and drink is analyzed. 40% of both Generation Z, Millennials and Generation X say they are interested, but the figure drops to 35% for baby boomers.

While contrast is important, because it can indicate significant changes, it can also become a trap by leading marketers to think that there are certain attributes that only apply to Generation Z when they are shared more widely. “The comparison that tells the most compelling story is not always the comparison that reveals the most compelling opportunity.”, explains GWI in its report.

Generational analysis can show whether one group is more likely than another to do something. It’s simple to explain, easy to agree on, instantly recognizable across the organization, and fits the way the vast majority of media platforms sell segmentation and define audiences. But it doesn’t always tell brands why a behavior occurs, what needs underlie it, or whether the same opportunity exists beyond the cohort.

What’s more, according to the GWI report, age appears in position 13 on a list of 15 factors that people consider define them, only above physical appearance and gender. 59% of those surveyed point out that values ​​and beliefs are what defines them the most, followed by personality (50%) and hobbies and experiences (48%) and life experiences (48%).

In this sense, if people do not consider age an important factor when defining themselves, it may not be a solid basis for constructing relevant messages either. That’s where generational thinking fails, when the label starts to act as the answer. The data may be technically true, but if differences between generations are considered the whole story, brands risk confusing the first layer of the audience with the audience itself.

This may worsen as artificial intelligence gains weight in brands’ segmentation decision-making. And in the last year, 44% of professionals have used insights revealed by artificial intelligence tools to define decisions related to the audience. It is the same figure that they have used internal data.

Generation Z exists as a population segment, since it is made up of 2 billion people born between 1997 and 2012, which represents almost 23% of the world population. It also exists as a cultural reference point, but may not hold up as much as a single target audience on which brands can base their strategies.

From GWI they invite us to look at other factors besides age. For example, the company’s data indicates that members of Generation Z with a high income are 82% more likely to pay for a streaming subscription than someone of the same age with a low income. In this case the determining factor is salary, not age.

As has happened with their predecessors, within Generation Z, income, employment situation, family situation and market context can generate very different behaviors, needs and worldviews. It contains subgroups that may contradict each other. The question therefore lies in how brands can trust and use the label without being blinded by it.

Five keys to segmentation

For some brands, using generation segmentation will continue to be a way to size an audience, understand the cultural context and communicate a strategic direction in the company. On the other hand, for others it will be too general an element to guide the strategy, and they will find a better audience in the
mentality, the market, the life stage or the behavior of consumers.

GWI offers five rules in its report to help teams evaluate when generation is useful, when it hides something more important, and how to find the most accurate audience under the general label:

Prioritize the mindset

The company points out that a generation can indicate which users are part of a certain age segment, but cannot establish what they care about, are interested in, or consume. It is advisable to identify two or three motivations, interests or behaviors that drive the result of the category, and then use generation and age to size, locate and activate the public.

Use location as layer

It is not a good idea to assume that members of Generation Z behave the same way around the world. Geographic location can change the behavior on which the strategy is based: how people discover brands, what platforms they trust, what convenience means, what price signals matter, and what kind of information people need before they buy.
It is important to separate what needs to remain constant in the strategy from what needs to be tested locally. The objective is not to create a different strategy for each country, but to avoid extrapolating the assumptions of a market and calling it global insight.

Analyze the contradictions

Brands want people to be consistent, because a clear user profile is easier to define, present and put into practice. However, consumers do not behave the same in all categories, so an insight that might seem marginal can lead to a more useful segment for the objectives. The goal is not to create messy user profiles; It is to avoid simplifying the data so much that the opportunity is lost.

Use the life stage to generate demand

While generation can provide context, the life stage the user is in can actually indicate purchase likelihood. Before treating Generation Z as a single audience, it is important to find the variables related to the life stage that can most affect the category, such as employment, housing situation, marital status or financial independence.

Explain the role of generation in strategy

Before establishing Generation Z as a target, it is necessary to explain what role it plays in decision-making and why it is the most appropriate angle for the strategy. Sometimes the generation will be fundamental, other times it will act as a useful secondary layer; and others will be little more than a convenient way to buy or inform an audience. The important thing is to know what role it plays before designing the strategy around it.

According to GWI, applying these five rules will make generational thinking more useful. They help discern when a general label is working strategically, when it hides a more specific audience, and when you need to go beyond age to move forward. They are practices to avoid falling into the “generational trap” and questioning the ideas around age segmentation before shaping the strategy.