August 15, 2023

Unlock Gen Z’s Spending Power

Globally, Gen Z commands over US$450 billion in spending power — an average per consumer of US$8,894. Let that sink in for a minute.

Recovered? Now let’s take a look at how your business can tap into that opportunity by understanding who Gen Z is, recognizing their spending habits, and harnessing their purchasing power through Snapchat Ads.

Who Is Gen Z?

Born between the mid-1990s and early 2010s, Generation Z — aka Gen Z — represents a significant portion of the global population. With their unique characteristics and growing influence, Gen Z has become a force to be reckoned with in the consumer market.

Gen Zers have been born and raised fully in the digital era. They’ve grown up with technology, social media, and instant connectivity uniquely shaping their worldview, their tastes and preferences, and their consumer behaviors. Generationally speaking, they also have the most experience with mobile shopping tools.¹

As a result, this generation’s known for its tech-savviness, entrepreneurial spirit, and strong desire for authenticity and personalization. Gen Z’s a highly diverse, culturally aware, and socially conscious lot, one that tends to value experiences over material possessions and to prioritize purchases from businesses that align with their values.

Put as simply as possible, to effectively engage Gen Z consumers, businesses have to understand the way they operate and then adapt their marketing strategies accordingly. Gen Z turns to Snapchat more than any other app to get feedback from close friends on purchase decisions. If you want to reach Gen Z, you’ve got to be willing to meet them on their own digital and compositional turf.

Fun Fact: Virtual shopping with friends is primed to grow, especially among Gen Z. In a recent study, 22% of overall shoppers indicated they were currently interested in virtual shopping with friends, while Gen Z expressed a 28% interest. Over the next five years, shopping in a virtual store is expected to grow by 229% while virtual shopping with friends should rise by 141%.²

Gen Z’s Spending Power

By year’s end, it’s estimated that Gen Z will account for 40% of global consumers.³ And remember that US$450 billion we talked about earlier? As a massive (numerically and economically) consumer market, Gen Z's spending power plainly presents an equally enormous, lucrative opportunity for businesses to tap into across industries. Some key pieces to this puzzle:

Like their Millennial predecessors, Gen Z’s spending power is projected to reach trillions of dollars annually in a matter of a handful of years — by 2025, they’ll make up about 27% of the workforce.⁴
Interestingly, Gen Z's influence is not limited to their own purchases. Their kind also has a significant impact on the purchasing decisions of their parents and peers like none before them.
Their digital fluency and ability to navigate online platforms means that the whole wide world of products and services is their oyster. They know how to get around online and they know how to find what they’re looking for.
With their increasing financial independence and willingness to spend on products and experiences they find valuable, your best bet is to embrace them and do everything you can to begin and sustain Gen Z-savvy relationships.

Fun Fact: Spending by the youngest group of US adults has been turbocharged by two once-in-a-generation drivers over the past year: decades-high inflation and a tight job market that has accelerated strong wage growth, especially at entry levels. A boost in savings from forced inactivity at the height of the pandemic also helped.⁵

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Strategies for Tapping into Gen Z’s Spending Power

Snapchat puts you in a unique position to unlock Gen Z’s spending power by advancing your choice of advertising objectives with support from smart strategic considerations and decisions. Take a look at these recommended approaches that alone or collectively can greatly influence the realization of your business goals:

Understand the Snapchat user experience

Snapchat’s renowned for disappearing content, augmented reality filters, and short-lived Stories and is designed to nurture and support authenticity, real-time updates, and personal connections.

You’ll find that when you take some time to operate within Snapchat as a member rather than an advertiser, you can form a much better idea about how to create content that aligns with Gen Z’s characteristics and the platform’s functionality. The result: Your business can capture Gen Z's attention and build meaningful connections with existing and new customers.

Embrace creativity and authenticity

Gen Z values authenticity and genuine experiences, so focus on creating visually appealing and creative content that resonates with that specific generation. Authenticity is key — avoid overly polished and staged advertisements. Instead, leverage user-generated content (UGC), influencer collaborations, and behind-the-scenes glimpses to establish an authentic brand image and foster trust with Gen Z Snapchatters.

Integrate Personalization

87% of Gen Z shoppers prefer tailored recommendations, and 74% are more likely to purchase from businesses that provide exactly that.⁶ Obviously, personalization in advertising is a big deal to the Gen Z audience. Make sure that it’s a foundational component of your campaign strategies by utilizing Snapchat’s targeting capabilities, which enable you to reach your customers based on demographics and interests, as well as leveraging Predefined Audiences and Custom Audiences.

Leverage influencer marketing

Influencer marketing has become a mighty powerful tool for reaching Gen Z. Collaborating with relevant influencers who have a strong following among Gen Z Snapchatters can help you increase brand visibility, credibility, and engagement. Influencers can showcase products or services in a way that feels organic and relatable to your (and their) audience, making it more likely for Gen Zers to trust and consider the recommendations.

Harness the power of storytelling

Storytelling is a powerful tool for capturing Gen Z's attention and fostering emotional connections. Utilize Snapchat's storytelling features, such as the Spotlight and Discover tabs, to create compelling narratives around your brand and your products or services. By tapping into Gen Z's desire for authentic and relatable stories, you can effectively communicate your value proposition and generate interest and engagement.

Gamify the experience

Gen Z loves gamification and interactive experiences. Incorporate gamified elements into your Snapchat advertising campaigns through interactive filters, lenses, or sponsored challenges that encourage user participation and engagement. Create a fun and interactive experience to captivate Gen Z's attention and drive them to take action, whether it's making a purchase or sharing the experience with their peers.

Emphasize social responsibility

Gen Z takes social issues very seriously and thus expects the businesses they support to be socially responsible. You should highlight your commitment to social causes and sustainability in your Snapchat advertising efforts. By aligning with Gen Z's values and demonstrating a genuine dedication to making a positive impact, you can attract and retain Gen Z consumers who actively support businesses like yours that share their beliefs.

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Using Snapchat Objectives to Reach Gen Z

So, how to put the above into play? By applying combinations of those strategies in your campaign planning and aligning your advertising objectives with the preferences and behaviors of Gen Z, you're effectively best prepared to harness their spending power. Whether it's creating brand awareness, capturing leads, driving app installs, or facilitating online sales, Snapchat provides the tools and formats to reach and engage with this influential generation. To wit:

Awareness

Snapchat's awareness campaigns are perfect for capturing Gen Z's attention and introducing them to your brand or product. With immersive ad formats like Snap Ads and Commercials, you can create engaging content that showcases your unique offerings. Use captivating visuals, compelling storytelling, and snappy messages to make a lasting impression on Gen Z. By building brand awareness among this tech-savvy generation, you're setting the stage for future interactions and potential sales.

Lead Generation

Snapchat's lead-generation campaigns can help you gather valuable information and generate leads from Gen Z users. By leveraging features like Lead Ads, you can create forms that capture user data, such as email addresses or interests. Offer something enticing in return — think exclusive content or special discounts — to encourage Gen Z to share their details with you. With a growing list of leads, you can nurture those relationships and guide Gen Z consumers further along the sales funnel.

App Installs

If you have a mobile app that's perfect for Gen Z, Snapchat's app install objective is the way to go. This objective enables you to showcase your app directly to Gen Z users, driving them to install and engage with it. Take advantage of Snap's App Install ads, which offer interactive elements like click actions or deep-linking to specific app content. Show how your app can enhance Gen Z's lives, whether it's for entertainment, productivity, or connecting with others, and make it easy for them to download and experience your app with just a few taps.

Online Sales

This objective is all about driving Gen Z to make purchases directly through your online store. Snapchat offers various ad formats, including Collection Ads and Dynamic Ads, that can showcase your products or services in an enticing way. Use eye-catching visuals, highlight unique selling points, and include clear calls-to-action (CTAs) that lead Gen Z straight to your online store. Make the purchasing process as seamless and convenient as possible to ensure a smooth path from discovery to checkout.

Snapchat’s all about facilitating authentic and engaging interactions between the Gen Zers who make the platform so popular. By tying key strategies into your Snapchat campaign objectives and design, you can successfully connect with our Gen Z base, capture their attention, and drive them to become loyal customers. As you adapt your marketing efforts to tap into Gen Z's spending power, you position your business for long-term success in the rapidly evolving digital landscape in which Gen Z is becoming predominant.

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