How brands can tap the spending power of the youngest generation

A recent study by the Aga Khan University, Graduate School of Media and Communications that sought to understand media consuming habits among millennials and Gen Zs showed that these generations would want the media to cover more financial topics such as how to make money, become financially independent, and save money.

The same report indicates that most Gen Zs and Millennials rely on social media for news with 73 percent saying they follow the links of news stories to legacy media news websites.

This is because it is convenient and allows for contribution to the ongoing discussions. At the same time, the generations still trust television news because of the perception of professionalism and credibility.

As a communication expert who works closely worked with diverse financial services providers, I find the aforementioned data gives valuable insights that organisations and brands, especially those in the financial sector, can use to appeal to this consumer base should consider.

Each generation grows up under unique circumstances that shape their outlook and experiences, ultimately influencing their buying behaviour and relationship with brands.

Millennials adopted technology and social media and brought it to the workplace. On the other hand, Gen Zs born from 1996 to around 2012 were brought up with the internet and social media as integral parts of their daily lives.

Gen Zs, now entering the workforce, make up a significant percentage of buyers in every industry.

According to a report by Barkley Consulting Group, Gen Zs’ spending power reached $143 billion in 2020 accounting for nearly 40 percent of the global customers.

Brands must develop effective communication strategies to resonate with them to gain a share of this massive customer base.

The biggest opportunity for brands offering financial solutions such as banking, savings, investments, insurance, retirement, and advisory lies in the fact that Gen Zs are just starting their careers and are keen on learning how to manage their money - and of course, make more.

However, this can be a daunting task because the generation has embraced unique communication styles that most brands are still trying to master.

They also have unlimited access to information on personal finance matters making them adept at verifying and easily sharing with friends for social proof.

This generation is tech-savvy, spending an average of 4-6 hours on smartphones daily, more receptive to instant messages, and seeks to consume engaging content. They have spend enough time on social media to tell if a brand is pushing too hard or just using manipulative communication tactics. In this case, they will leave a negative review or simply disassociate with a brand whose values don’t align with their own.

While communicating, brands should integrate the credibility of traditional media and the increasing prominence of social media as information on finances can sometimes be complex and susceptible to misinterpretation.

Creating communities and encouraging user-generated content around personal finance issues can also promote participation and sharing of experiences the audience can easily relate to, thereby increasing interaction with the brands.

Similarly, brands can utilise micro and macro influencers who have a good understanding of personal finance topics to present authentic and trusted recommendations to reach these audience groups.

With the increased use of social media, what could be seemingly a minor inconvenience to a client or failure to deliver what is promised can fast escalate into a crisis, hence it is important to have a well-laid-out issues and crisis communication plan.

As Gen Zs gains massive purchasing power, though still faced with potential budget constraints due to rising inflation, brands that are not keen to learn effective ways to communicate with them might stand to lose a significant share of the market.

Ms Kagwe is a communication consultant at Communicis.

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