The oldest Gen-Zs, now between 21 and 22 years of age, are graduating from college. They have been in the workforce for five years and have an estimated purchasing power of more than $10 billion. The problem is, almost everyone lumps them together with Millennials as one large homogeneous mass of "young people." In reality, they are very much different, and those businesses that take the time to recognize just how much so can stand to profit from it.
Both generations are represented in my own household, so I've had a front row seat to the differences between the two groups. But in the interest of a less empirical approach to the issue, I turned first to YPulse, and then a host of business, academic, and medical professionals for help. I've isolated on 10 key differences between the two groups that will help those who hire them, lead them, and sell to them make far better decisions. But before we get to that, let's get to know the two groups a little bit better.
The Millennial generation, or Generation-Y, using YPulse definitions, includes those born between 1982 and 2000. The oldest Millennials have now turned 40. There are some 88 million of them in the United States, and they boast a total spending power of $30.2 billion. Their generation witnessed the tech explosion, which included the commercialization of the internet and the mobile phone, the introduction of the laptop and the iPod, and the launch of social media. They helped elect our first African American president, witnessed Columbine and Sandy Hook, and ran headlong into economic and health crises as they planned for life's most important events.
Generation-Z includes those born between 2001 and 2019. The oldest of them are now of drinking age. There are 77.9 million Gen-Zs, with a combined spending power of $10.7 billion -- a figure that will only increase as the generation matures. This generation cannot remember a time before the internet or social media and has had their childhood interrupted by a market crash, racial unrest, and a global pandemic.
The dramatically different backdrops against which these generations grew up and matured have significantly impacted who they are and have contributed greatly to the clear distinctions that exist between them, a mere 10 of which follow below.
Millennials were raised in a boom, Z's in a bust. Until the significant downturns associated with the crash of 2008 and later Covid-19, which they experienced mostly as adults, Millennials, growing up, knew a world of prosperity. Born during the Reagan and Clinton years, times were good. Zs, on the other hand, have grown up watching their parents endure the hardships of both the economic collapse of 2008 and the crippling financial impact of a global pandemic. In fact, according to YPulse, 52 percent of Gen-Zs don't even remember a time before the Great Recession. As a result of these experiences, the younger generation is far more debt-averse and budget-minded than their Millennial counterparts. For example, Walmart is a brand with very high equity among Zs; for them, shopping at Walmart is cool. For Millennials, Walmart appears nowhere on the cool index. In addition, Zs start planning for life and their careers earlier, on average, and they skew far more heavily toward an interest in entrepreneurship than do Millennials. Zs also, likely from watching parents being tossed out of jobs they dedicated years of long hours to, do not, unlike Millennials, live to work. Lauren Johnson, co-founder of startup BerryLemon, summed it up pretty well: "Gen-Z is more comfortable with work boundaries. Over time, they will humanize corporate companies. At a young age, they understand the reality of corporate life. And to compensate, they set boundaries. They know when something (like overworking, or overcommitting to a corporate job that doesn't care about your well-being) is just not worth it. Millennials aren't as talented at this. They like the hustle." It's not laziness, as so many have mistakenly guessed. It is, though, an opportunity for employers to inspire an entire generation in search of more.
- Both generations are stressed out, but Gen-Z is far more anxious. Eighty-four percent of Generation-Zs are anxious about the future compared with 72 percent among Millennials, says YPulse. They are more open and self-aware than their Millennial counterparts. By their own admission, Gen-Zs are anxiety ridden, lost, moody, social, and self-involved. More than any other generation, they believe that mental health should be openly discussed in the workplace. Zs want and value better mental health benefits at work and, to a greater extent than Millennials, will leave to find them. "Not a small part of what is fueling the Great Resignation is a demand, on the part of Gen-Z workers, for greater mental health benefits. Gen-Z is more comfortable sharing information about their mental health than any previous generation, Millennials included. They will talk about the need for mental health days, therapy, or even medication in ways that others would have been ashamed to," said GiGi Robinson, a Gen-Z chronic illness and mental health advocate. In a recent survey by workplace platform Robin, "91 percent of Gen-Z employees view mental health resources, including wellness stipends, as a critical benefit when seeking employment." For employers, it's about removing the stigmas attached to mental health and ensuring greater access to mental health benefits for a new generation of workers who are demanding them.
- Millennials are diverse; but for Zs, diversity is a cause. Before Zs, Millennials were the most diverse generation in American history, with 45 percent identifying as BIPOC as reported by YPulse. By comparison, just 20 percent of the Silent generation and 28 percent of Boomers are BIPOC. Zs, now, are the first generation to hit 50 percent. But while this generation is slightly more diverse than the Millennials who came before them, they are far more passionate about diversity. Racism is the No. 1 cause among this generation. According to Mark Beal, assistant professor of professional practice, communication, at Rutgers University, and author of three books on Gen-Z, including the just published Gen Z Graduates to Adulthood, "In my national surveys of Generation-Z, nearly 35 percent prioritize a corporate culture of diversity and inclusion as the top-ranked quality they are seeking in an employer, ahead of competitive salary and benefits, which may be more important to Millennials." Even questions like whether there should be more BIPOC representation in TV shows and movies garner support greater than 70 percent, routinely tallying double digits higher than the Millennial cohort.
- Gen-Z is challenging definitions of sexuality in ways that Millennials have not. YPulse found that Generation-Z is more than five times as likely (27 percent) as the general population to identify as LBGTQ+ and about half again more likely than Millennials (19 percent). For Generation-Z, sexuality and gender is a more fluid concept and one they are far more willing to discuss openly than their older counterparts -- even at work. Kathy Sheehan, SVP at cultural strategy and business intelligence firm Cassandra, says, "Gen-Zs are much more likely to consider gender lines blurred today -- 18 percent of Zs self-report as bisexual, more than any other generation, according to a recent Cassandra Report survey." Gay and trans rights are issues that both groups care strongly about, but this is a cause that Gen-Z is far more likely to speak out about. It's also an issue that Generation-Z is more likely to hold companies accountable to walk their talk on. Where Millennials were OK with what Gen-Zs call "rainbow washing," the once-a-year casting of company logos in rainbow colors for Pride Month, Gen-Zs will call companies out whose lip service doesn't match their actual records on gay and trans issues.
- Both want to make a difference, but Gen-Z thinks their generation needs to speak up! A recent YPulse study found that when asked who has a responsibility for speaking out on important social issues, themselves or brands, 47 percent of Millennials said they should speak out, while 43 percent said brands should speak out as well. Zs, on the other hand, believed that all concerned should be far more vocal. Fifty-nine percent of Gen-Z respondents thought that they should speak out, with 51 percent saying brands should speak up too. The expectation among this youngest generation is higher than ever that injustices, slights, and wrongdoings should be called out, made public, and acted on. According to data from LinkedIn's Workforce Confidence survey, 80 percent of Gen-Z reported that better alignment with their values and interests was a priority in a place of employment, compared with just 59 percent among Millennials.
- Millennials have finally cut the cord, but Zs never had a cord to cut. When it comes to media consumption, YPulse found that 21 percent of Millennials are still on cable compared with just 13 percent of Gen-Zs, the majority of whom hang out on YouTube. It's what they grew up on. They also found that fully 64 percent of Generation-Z get the majority of their media content on YouTube, and, in fact, it's the first place Zs go to find information about anything they don't know -- versus Google for Millennials. And Millennials, though still lagging behind their Z brethren, are increasingly joining the party, with 52 percent of Millennials reporting that they now regularly view media on YouTube, according to the same YPulse survey. Why does it matter? If you're a cable or Google advertiser believing that Zs are seeing your ads, think again. Those wanting the attention of Zs are not going to get it in the same ways and places that they attracted the gazes of Millennials -- because they aren't like Millennials. Advertisers and prospective employers wanting to develop a meaningful relationship with Zs must first create a connection with them.
- Millennials started social media, but Zs are driving what's next. While it's true that the social media phenomenon initially exploded during the adolescent and young adult years of the Millennial generation, the platforms they loved are receding in popularity while the Gen-Zs write their own social media chapter. The single biggest difference between the generations: Millennials prefer text-based platforms while Zs prefer visual-based media. Looking at their social media preferences tells the story. TikTok is now the platform where trends start. Zs are even using it to find jobs, eschewing the platforms used by Millennials like LinkedIn and Indeed. Alex Ma, co-founder and CEO of Poparazzi, had a pretty good take. "Millennials grew up seeing the internet as a tool. Gen-Z grew up on the internet, so they see it as a place." This can be seen in the Zs' significantly greater use of social media comparatively, and in the degree to which it is markedly more experiential. Employers and advertisers seeking to reach these generations need to go where they hang out.
- Millennials watched the first online creators; Zs are under the influencer effect. Zs are far more likely to both follow and buy something created by or endorsed by an online influencer than Millennials. YPulse found that 60 percent of Zs follow an online creator versus just 42 percent among Millennials. For sure, the lockdowns of Covid-19 helped facilitate these connections. But to discount them is a mistake. These are success stories that Zs want to emulate and role models they look up to and learn from. What's more, over 50 percent of Zs now see social media as a viable side hustle. This phenomenon promises to have significant impact on both advertising and investment trades for the foreseeable future.
- They value different brands. While Millennials and Zs share a number of common brand preferences, it would be a monumental mistake to treat them as a monolithic purchasing bloc. As lifestyle influencer and fashion veteran Amanda Maxwell told me, "Gen-Zs care more about the emotional appeal of the article of clothing and don't care much whether it's designer or not. To me this is a big deal; it will affect luxury companies in a large way. Here's an example: In my generation (Millennial), women always have a nice bag. It's always designer or it LOOKS designer. Now, with Zs no longer caring about designers, most of them carry around a cotton tote bag that's usually been given to them by some organization. And now we have luxury designers creating cotton tote bags for hundreds of dollars. But, by and large, only Millennials buy them." The point Amanda makes applies universally; if companies are not paying attention to the very unique preferences of Generation-Z, they stand to take a shellacking.
- Millennials grew up gaming, but Zs are playing in the metaverse. Both Ys and Zs grew up gaming and continue to game as adults. According to YPulse, 88 percent of Zs and 70 percent of Millennials game regularly. The groups have similar profiles in terms of the platforms they play on across PC, console, and mobile. But what's different about Gen-Z is how they've embraced the metaverse. Where Millennials grew up hanging out together in physical places, Zs are coming together remotely, in the ether. According to Tina Mulqueen, CEO at Kindred PR, "Gen-Z has grown up socializing in the context of video games. They are more likely to spend money on status symbols in these environments, like skins for their avatars that serve a social proof function and to adopt new technologies for communicating and socializing." It also matters because it's a phenomenon that has reinforced the independent nature of this generation. Zs are far more inclined to be alone and to work alone than their Millennial counterparts. It's a fact that employers must not fix but accommodate and deal with if they are to be successful in the future.
It should be clear by now that treating these two generations as one undifferentiated group would be a mistake -- for employers, advertisers, or even their parents. Generation-Z, the new gang in town, is a fiercely independent group, intent on making the world a better place, less concerned with status than with equity, and, while cautious and anxious about their own futures, not afraid of new technology or of speaking truth to power. Courtney Miller, EVP at Edelman, tagged them pretty well when she said, "The cultural forces shaping Gen-Z's beliefs have affected them in positive and negative ways, but as a result has created a highly sensible generation -- they value realism, safety and security, and solving real problems." The brands and employers that help them solve those problems are in for a rewarding future; those that don't can expect a fairly rocky ride.