Cracking the Code: How Gen Z is Reshaping the Economy

A Market Check-In

In today's rapidly changing market landscape, separating the noise from the signals that are worth paying attention to can be difficult. Yet understanding the trends that will drive the economy is essential to every brand's long-term sustainability.

As the parent company of three brands-Colossus SSP, Huddled Masses, and Orange 142-that span the entire spectrum of the digital advertising and marketing sectors, we take our market research responsibility seriously.

We see it as our duty to study and report on the trends that will drive economic growth for all our clients, whether small businesses, large brands, publishers, media agencies or DSPs. The goal of DDH and its sub-brands is to equip our clients with the tools and insights they need to navigate the evolving consumer landscape

For this reason, we commissioned Horowitz Research to survey over 2,300 U.S. consumers so that we can better understand how the brand perceptions and purchasing habits of the African American, Hispanic/Latin, Asian American, Pacific Islander, and LGBTQIA+ communities affect the general population overall, with a particular focus on Gen Z.

Why focus on Gen Z? As the largest generation on Earth, this cohort will influence every aspect of the American economy.

Gen Z Ascending: A Multicultural Force That Will Reshape the Economy

Once upon a time, the US economy evolved around Baby Boomers. Not anymore. With its substantial purchasing power, Gen Z is quickly becoming a significant driving force in the consumer market. Innately tech-savvy, entrepreneurial, and committed to authenticity like nobody's business, Gen Zers will be as influential on the consumer market as the Boomers before them.

Worldwide, Gen Z spends $450 billion each year, with an average of $8,894 per consumer. That power will only grow as Gen Z settles into their careers, buy homes and start families. (By 2031, Gen Z will represent 31% of the US workforce, up from 15% in 2022.)

Today, Gen Z accounts for 5% of global retail spend, but will more than triple to 17% by the end of this decade. Like Boomers and Millennials, they will drive much of the economy and the zeitgeist. They already are: today Gen Z accounts for 40% of consumers worldwide, despite representing only 30% of the global population.

But here is one of the more interesting and important facts about this cohort: Gen Z is one of the most racially and ethnically diverse generations, with almost half identifying as a person of color or minority. Our research shows that this will have far-reaching ramifications on the way marketers and brands talk to the market.

What Gen Z Values

Multicultural and diverse populations play in shaping all consumer preferences. After all, over 57% of the general population in the U.S. said multicultural and diverse people affect their brand choices. That's an important tipping point for America; multicultural audiences influence all generations of consumers.

But that influence is even more pronounced with Gen Z. Our research found that 81% of Gen Zers are influenced by multicultural people. As the report notes, Gen Zers, "exhibit a fundamentally different point of view regarding fairness, influence, and culture - prioritizing diversity while championing equality."

It goes on, "it's not just about seeing themselves supported by ads or media spending. Gen Z seems to be keeping score about equality for all groups." It's an admirable quality, but not a surprising one, considering that this generation is so diverse and has people who are members of other communities in their circle of friends.

How to Prepare for Gen Z Dominance

As Gen Z ascends to dominate consumer spending, brands will need to adapt their strategies so that they can resonate meaningfully and authentically with this influential generation. You've heard this before, but it's worth repeating again. Below are five specific things brands should do to connect with Gen Z consumers.

#1: Embrace diversity and inclusion. Given that multicultural and diverse populations significantly shape Gen Zers' preferences, brands that authentically represent diverse voices and experiences in advertising and media campaigns will gain traction.

This isn't a matter of including multicultural faces in ad creatives; it's a matter of taking the time to understand each community, offering products and services that meet their unique needs, and speaking to them directly about their hopes, aspirations, and concerns.

#2: Champion equality. Gen Zers notice and respond to a brand's commitment to equality for all groups, not just in its messaging but also in its business practices and corporate culture. Transparency and genuine efforts to promote equality will resonate with (and motivate!) Gen Z consumers.

#3: Reflect Gen Z values. Go beyond token representation and actively support social causes that align with Gen Z's values. This can include taking a stand on social justice issues and ensuring ethical practices in all business operations.

Gen Zers are also passionate about climate change, and transforming business operations so that they're more sustainable. As a business, making sustainability a core value will benefit the Earth, but it will also make your company a more attractive place to work for this generation.

Mental health is another key concern, and Gen Z shoppers are keen to favor brands that offer mental health services to their employees. Offering employees an Employee Assistance Program (EAP) so they can access services will benefit your employees, and show the market that you care about them.

#4: Foster authentic connections. Gen Z demands authenticity. Craft ads and communications that resonate with their diverse communities to avoid coming across as inauthentic. Engaging them on their preferred social media platforms is key. By fostering genuine connections, you build trust and establish a foundation for a lasting relationship with this influential generation.

#5: Meet them where they are. Many Gen Zers gravitate towards multicultural publishers that offer content relevant to their communities. This isn't to say they only read multicultural media. However, brands that support publications that cater to their community will be seen in a positive light.

How DDH Companies Are Helping Brands Connect with Gen Z

We didn't launch DDH as a media company geared towards Gen Z, but our values and DEI focus align well with this generation's. We are:

• We are a multicultural organization committed to DEI. We recruit, train, and promote from all communities in America. Our leadership teams are multicultural and staffed by women. We have embarked on a path to sustainability and are working to lower campaigns' carbon footprint. We also offer our employees an EAP.
• Both Orange 142 and Huddled Masses have considerable expertise in crafting messages that resonate with multicultural audiences, as well as launching social media campaigns to reach Gen Z
• Colossus SSP can provide access to multicultural publications and audiences at scale. Its development team works with multicultural publishers to get them up to speed with programmatic advertising, so that they can fully monetize their sites, as well as help brands reach and engage diverse audiences on diverse-owned sites.

Checkout Our Research

Want more information? Download our report, Cracking The Code: How Multicultural & Gen Z Are Reshaping Mainstream Marketing Or view the webinar.

Public link

Please use the above public link if you want to share this noodl on another website.