With an estimated spending power of $143 billion, Generation Z are swiftly becoming the new Millennial.

Everyone’s talking about them, and everyone wants a slice of that pie.

Generation Z, that’s those born between 1997 and 2012, are soon to command a sizeable share of the market. Many tech businesses are targeting this audience either directly through the product they sell or through their marketing strategy.  

Communicating authentically with another generation is hard. Fortunately, there are clear trends which can help give us an idea of where to aim.  

There’s no question this is a tech savvy, socially aware generation with the world at their fingertips who also have uncertain prospects in a recently Covid disrupted world.

So, what do you need to know? We’ve looked at 3 main things below.

Our focus as a studio is designing fintech products but the information in this post is relevant to anyone creating a digital product for Gen Z.

Gen Z or ‘Zoomers’ are an endless source of fascination for the media.

There’s plenty of research out there on what makes them tick, the struggles they face and what they like to do. After all, we have a much greater understanding of people’s behaviours than ever before.

If you have any contact with teenagers and young adults on a regular basis some of this will be obvious. It would be fair to say they are always on their phones. The stats back this up.  

And yes, there are negative side effects to this relationship with technology but regardless, it is very much the way things are.

This is how young people live their lives, and there’s not much point arguing against the convenience and speed at which this tech is moving. Better to find ways of using it better than condemning it altogether.

In the areas of education, health, finance, and more, it’s making life easier, more efficient, and more accessible. Gen Z are at the forefront of this and expect to be served with the latest and best digital products.

Here’s 3 areas of life that are different for Gen Z when compared to Millennials, Gen X’ers and Baby Boomers before them.

Gen Z are the second generation of digital native. Whereas Millennials adopted the new technology and came of age as the internet superpowers were establishing themselves, Gen Z were born into it.

Not only will they spend their money on technological devices but most of their shopping will take place online or on their mobile phones as well.

It’s not uncommon for young people to have smartphones before the age of 11 and computers, iPads and the like have an increased role to play in education.

As such their screen time is extensive. One study found that the average Gen Z user spends 9 hours per day in front of a screen. Although we can imagine it’s probably high for most people.

Regardless of parental restrictions the smartphone provides access to a world outside of their own and endless hours of entertainment, in their pockets always.

The youth subcultures of today exist online, in YouTube communities, on Discord chatrooms, and surrounding TikTok influencers and micro-influencers.

The power of micro-influencers is the rocket fuel that will help future brands go to the moon. As we’ll explore below, Gen Z might be reluctant to part with their money but when they feel like they know the person selling the product they’ll be more inclined to spend.

The most important thing to remember is Gen Z have grown up with this technology, so they know how to use it better than anyone else and it’s where they hang out.

One of the key findings for Generation Z is that they are actually pretty well behaved and studious.

They’re more likely to focus on academic work than go out partying. And in the summer, they’re swatting up in the hope of good career prospects down the line, as opposed to having a summer job.

But the sheer cost of going to university along with the concerns that Uni simply ‘isn’t worth it’, may mean more young people opting for a staggered approach to working life through apprenticeships and similar schemes. The pandemic hasn’t helped either with many people’s experience of university tainted.

We’ll look at money concerns in greater depth below but it’s clear that the cost of living is a concern for many young people, meaning those that can, will likely stay at home for longer.

So, they’re leaving the parental bubble later, but studies indicate they are more informed and socially aware than ever before.

Social media can create bubbles of homogenous views, but it also offers access to a world of resources and other people’s experiences.

On the negative side, they are reportedly more unhappy than ever before and prone to mental health conditions. Optimism about the future is low and more young people than ever report anxiety being a struggle they face.

Their exposure to social media and the comparison culture that platforms like Instagram foster seem to be partly to blame, but this also isn’t exclusive to Gen Z.

It’s even possible that the younger end of this generation are beginning to reject the materialistic and sanitised parts of social media in favour of authentic and real communities that form around shared interests.

According to Business Insider, ‘Generation Z’s economic power is the fastest growing around the world’ and as such there will be ‘tectonic shifts in consumer preferences.’

Indeed, the way younger people spend, or don’t spend their money is changing.

And it’s the not spending, as we mentioned above, that is particularly surprising. Contrary to the cliché, Millennials are actually quite money savvy and keen to save. The financial crash occurred just as they were starting their careers or entering the world of work so they actually have every reason to be cautious.

Saving money and keeping track of spending habits appears to be something that Gen Z are continuing as well. A significant number have savings accounts, and many are investing much earlier than in previous generations. And it’s really no surprise.

The ease of access to technology and apps that help young people manage this stuff means they can visualise what is happening to their money. The cultural changes we mentioned above also mean they are possibly far more cautious than ever before about what happens to it. They certainly aren’t spending it on alcohol.

But they are spending money. Just on different things. Essential (and expensive) products, life experiences (that they can share on social media), and education all appear to be popular investments.

It’s not all good news of course. The increase in buying options such as Buy now, Pay later schemes and instalment credit are making it easier for young people to make purchases but potentially leading to greater risk and a limited appreciation for value.

Still, the are plenty of apps providing money saving, money tracking and money spending tools which are helping this generation know exactly where their money is and what they can do with it.

Tracking spending habits is a particularly popular feature. Pioneered by challenger banks like Monzo and Starling it has subsequently been adopted by traditional banks as well. There are plenty of other apps providing useful tools.

Venmo helps people split bills and make payments, seamlessly and easily.

Robinhood, Trading 212 and others are making investing and trading more accessible and easier to get into than ever before. Whilst not for the younger end of Gen Z, many on the older end will be getting introduced to it through apps like these.

Zelf is a digital tool with a bold brand that allows you to send money in Facebook messenger. It understands how young people communicate and also that they want to be involved in communities. A big part of their brand is getting you to join their ‘movement’ and incentivises you to play an active part by offering perks, as you can see below.

Cleo is another money app helping you save and reach targets. Visit their website and you’ll see who they’re aiming their product at.

They’ve recognised an audience with considerable spending power who have agency and knowledge of their own and want a clever, authentic, and enjoyable way of dealing with money.

Hopefully you’ll now have a better idea of the audience you’re aiming at than you did before.

In a future post we’ll look at how to design for Gen Z and put some of these learnings into practice.