Millennial and Gen Z: how their shopping habits are changing in the Covid-19 era

14 December 2020Reading time: 6 min.

Undoubtedly, COVID-19 is impacting Millennials and Gen Z the most. Habits and behaviors are changing and some already existing phenomena have been accelerated. Digitalization and an unexpected turn toward moderation and pragmatism are the common trends of these two generations.

Millennials and Gen Z represent about 46% of the global population. These two generations are facing the first fundamental stages of their lives while dealing with this historical crisis. Millennials are grappling with starting a new family or buying their own home, while Generation Z takes its first, key decisions about their future and is making its entrance into the working environment.

These are, by nature, delicate and difficult phases of life. Now, these two generations also need to cope with even more instability now that the COVID-19 emergency has impacted our daily lives and the forthcoming new normal.

So let’s look at how these two generations are responding to the crisis, what’s changing in their shopping habits, and where their sentiment is turning in order to understand how you can adapt your communications to their new needs.

Millennials and Gen Z: who are they?

The Millennials, a.k.a. Gen Y, are those who reached adulthood in the 21st century. The Pew Research Center has been studying this segment for over 10 years and defines them as the generation born between 1981 and 1996. There are around 1.8 billion worldwide and roughly 13 million in Italy: 40% of them are parents, and 35% own a house.

The term Gen Z, instead, refers to people born between 1995 and 2012, reaching about 2 billion in the world. They’re called the first true Digital Natives since they’ve been the only ones to not experience a digital-free world. We could define them as a mobile-centric generation since 97% of them own a smartphone.

Post-COVID-19 trends that unite Millennials and Gen Z

COVID-19 is certainly changing the routines and habits of these two generations, giving a push to some already existing phenomena.

Specifically, their response to the pandemic highlights some common trends.

  • This includes the further digitization and daily use of new technologies that had already been familiar to these segments. The virtual and online dimension has become an integral part of their every day working/learning life, with an uptick in habits like live stream entertainment, online shopping, and, as seen in this post, food delivery.
  • Then, there’s their increased focus on health, well-being, and sustainability. These population groups are increasingly inclined to embrace a healthy routine and adopt ethical choices. According to Deloitte, 39% of them are concerned about mental and physical health. Despite the pandemic, 35% of them are still interested in climate change. Moreover, according to the GlobalWebIndex, 64% of Gen Z and 63% of Millennials are willing to pay more for an “eco-friendly” product. Purchasing locally from closer and independent sellers is preferred by 49% and 46% of them, respectively.
  • Purchases are more thought out by focusing on the essentials. Gen Z and Millennials are paying more attention than ever on what they buy. They limit their expenses to the truly essential, putting large investments and major expenses on hold. Both segments are taking a more moderate, less impulsive attitude. They spend their money more wisely.

Millennials vs Gen Z: the main differences in shopping habits

Despite these common trends, there are some differences in how they use digital platforms and what they prefer to purchase. The pandemic is solidifying their preferences, thus debunking stereotypes and beliefs about the younger generation.

The shopping experience: online vs. offline 

Contrary to what one might think and despite their digital nativity, Gen Zers prefer offline and in-store shopping so that they can touch what they want to buy. According to a recent GlobalWebIndex study, Gen Z ranks second only to Baby Boomers in the appreciation index for in-store purchases. Even more surprisingly, Millennials buy online the most. They surpass, albeit slightly, the younger, more digital generation.

The pandemic may have given greater impetus to online purchases due to logistical needs, but the in-store experience still has an important value for consumers—especially for the youngest.

gwi graphic gen z vs millennials shop online and offline

Source: GlobalWebIndex

When it comes to shopping platforms, both the youngest and the Millennials still prefer social media channels. Instagram is the top for picking out e-commerces and brands, but the pandemic has strengthened also a more traditional phenomenon, the word of mouth, as found in a Klaviyo survey.

Payment methods: cash vs. contactless and virtual payments

Get ready to change your mind on this, too. Although members of Gen Z are the most familiar with mobile payment services and online funds, they prefer to pay cash much more than Millennials do and, incredibly, even more than the older Baby Boomers. Also, they are less inclined to buy products at their full price and wait for discounts and promotions before finalizing a purchase.

gwi graphic gen z vs millennials pay in cash and pay with credit card

Source: GlobalWebIndex

When asked, “What would you do with £1,000?”, an HSBC study showed that Gen Z is, contrary to all expectations, actually more likely to save and very pragmatic with money. Plus, around 72% said that they’d transfer it to savings, compared to 55% of Millennials.

What do Millennials and Gen Z expect from companies during the COVID-19 emergency?

Moreover, the pandemic has definitely changed these two generations’ sentiment and expectations toward companies.

In the Klaviyo survey, Millennials stated that they want companies to offer not only honesty and empathy but also authenticity. In fact, they feel that certain promotions lack genuineness and sincerity. Gen Y members appreciate when brands have shown empathy during this historical moment. They argue, however, that companies should stay true to their own image and style without exaggerating since that could risk looking fake.

Additionally, those from Gen Z show a preference for authenticity: 82% say they like it when consumers are the real protagonists of communications and content. During this crisis, they expect not only empathy but also concrete help from companies. As a result, 72% like to buy from socially committed brands.

How to adapt your marketing strategy to the new sentiment

Taking into account that these two generations are an important share of the global population and that Gen Z is around 40% of global buyers, the forthcoming new normal means that companies must understand their needs and adopt strategies to meet those needs.

Based on what emerged from comparing these two segments, here are our tips for adapting your campaigns to their new sentiment:

Analyze data and constantly monitor their behavior

Gen Z is more digital-savvy and spends most of its time online. However, we have seen how the buying habits of these consumers contradict all predictions. Cash payments and in-store experiences indicate that their preferences are difficult to decipher, given the current uncertain and ever-changing reality. Start by analyzing data and monitoring sentiment to build a strategy that can meet their needs. Only this can totally tap into them.

Leverage the right online platforms

As we’ve seen, social channels and word of mouth are key in orienting online shopping on any platform. Also keep in mind that 92% of Gen Zers use social networks. Take advantage of your social media channels. Stand out by sharing your community’s experiences through user-generated content, and focus on reviews and Q&As to generate word of mouth in the virtual world.

Your tone of voice should match expectations

These generations appreciate and seek transparency, authenticity, and empathy from brands. Adjust the tone of your communications to the actual situation, be sensitive and human without exaggerating, and stay true to your image and your values.

Implement mobile design

Responsive or mobile friendly design is key for reaching out to Gen Z, which is always online. A GlobalWebIndex study reports that 64% of young people say they’re constantly connected and spend, on average, 4 hours and 15 minutes a day on their smartphone. Millennials also show a similar “mobile first” attitude: 74% of them consider their phone to be their most important device. So it goes without saying that it’s essential to make your site and your emails compatible with it. Don’t forget best practices for a design that’s fit for the needs of the youngest.

Communicate your ethical and sustainable choices

If your company makes ethical choices and is committed to supporting the environment, then don’t be shy about it. The opening rate of emails whose subject line contains the keywords “green”, “eco”, and “sustainable” has increased by 8%. This reveals that public interest on these issues has grown. So harness the power of these keywords right in the subject line. If your products reflect your ethical choices, then leverage this aspect to facilitate a buying decision.

Conclusions

Millennials and Gen Z are undoubtedly the generations most affected by the uncertainty and future instability that the COVID-19 crisis is generating.

Gen Z seems to be the most unpredictable in purchasing preferences and behaviors. Their uncertainty and speed of change reflect the new normal alongside the next generation of adults.

Companies need to monitor this segment’s transformation and evolution in tastes, habits, and preferences in order to adapt sales and communication strategies to these new, key buyers.

This article was written by

Paola Bergamini

Paola Bergamini

I was born in 1993 in Como and I escaped from this little town to study in Milan, where I graduated in 2017 in philosophy. I've always been interested in marketing and communication and I love writing and reading. As Content Editor at MailUp, I try to keep up to date with Email and Digital Marketing news, in order to share trends, theories and tools about this constantly evolving sector.

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