Millennials are so yesterday. That’s the growing sentiment among brands as they make the shift away from the once-coveted Millennial consumer to now court the new generation in town, Gen Z, or the “iGeneration.” The oldest Gen Zers are now entering adulthood and look very different than their Millennial counterparts. They are the country’s most racially and ethnically diverse generation ever. Additionally, they are on their way to becoming the best-educated generation, according to a Pew Research Center report.
Gen Z comprised primarily of people of color
Many brands have yet to figure out how to market themselves effectively to Millennials, let alone Gen Z, who poses an even bigger marketing hurdle. But to understand Gen Z means understanding multicultural consumers as nearly half of Gen Z are racial or ethnic minorities. In other words, your Gen Z problem is a multicultural problem. The Pew Research Center analyzed Census data of Gen Z, who are currently between the ages of 6 and 21. They found nearly half — 48 percent — are from communities of color.
A “bare majority,” the report notes, of 52 percent are non-Hispanic white, compared to 61 percent of Millennials in 2002 when they were in the same age range. “There’s much more Hispanic and Asian presence among the nation’s children and youth today,” says Richard Fry, a senior researcher at Pew, who co-authored the report with Kim Parker.
Legacy brands struggle to prove relevancy
So why do brands have such trouble reaching this cohort when brands know that the key to winning sales is wooing consumers? Two reasons:
- They are unprepared to engage the multicultural consumer.
- They are focusing too much on generational stereotypes rather than personalized messaging and sales strategies. The fever around Gen Z is a perfect example.
Wal-Mart, Taco Bell, and many other legacy brands desperately trying to remain relevant have latched on to Gen Z for dear life for good reason. Over 68 million-strong, this cohort has real purchasing power and influence that is only getting stronger, according to Reuters. Thus, many companies are adjusting their marketing strategies to reach them. But therein lies the problem. Are they making the right changes fast enough with a message that is authentic and accessible?
Gen Z is notorious for staying one step ahead of brands and have a good sense of when they are being sold to, not wooed. Stale marketing strategies wrapped around outdated product and service offerings is the kiss of death for brands. For example, businesses that are investing all of their marketing dollars into influencers may soon find that method ineffective as Gen Z finds new spaces to occupy.
Even if modern brands can pull off blanket marketing, they won’t be able to in 10 or 15 years. This generation is famously fractured, with each member treasuring his or her identity, of which racial and ethnic identity plays a large part in. Personalization, not generalization, is key. And with the increase in multiracial consumers among Gen Z, identity is becoming more complex than ever.
Multicultural research is a business imperative
So, what’s the solution? Invest in multicultural market research. Ensuring that your customer data platforms have representative samples of multicultural consumers is key to bring your marketing into the 21st century. Hiring a multicultural influencer or having a stock image of a multicultural group of friends is no longer going to cut it. Gen Z is not just diverse, they are savvy.
Smart brands are not only diversifying their marketing technology and automation to achieve the more personalized one-to-one marketing relationship that this generation expects, they are taking the extra step of going beyond social media and online data and getting back to the basics, speaking to these consumers one-on-one in a qualitative setting to gain insights that resonate with the new mainstream.
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