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Move Over Millennials, Gen Z Is Changing the Market

In the coming year, the first of Generation Z will enter the workforce, having just graduated college. Smart investors are already studying how to take advantage of this group’s eating, shopping, and social media habits. While many in this generation are still in school, they have great spending power in today’s economy. Companies should be ready to grow and evolve with the Gen Z generation, and the group is known for being well-informed, even when it comes to investing.

 

This generation has never been without the internet and are used to anything and everything being delivered to their front door. Marijuana is likely to become legal in most places in their lifetime, and they’ve grown up in an influencer culture.

 

For those who want to bring Generation Z into their portfolio, there are several trends to be aware of with this new group to hit adulthood.

 

Influencer Culture is Strong

 

Older millennials have known a time without cell phones and Facebook, but Generation Z lives on social media platforms. Gen Z learns about new products and services through social media versus more traditional advertising methods.

 

Celebrities and even your next-door neighbor could be an influencer. Influencers get large followings on social media and are paid to promote products. Consider Kylie Jenner, who falls into Generation Z. She has promoted her way to billionaire status through her social media following. Just Google what she did to Snapchat in February 2018. With a single tweet, she disclosed her displeasure with the platform and reduced their market cap by over a billion dollars.

 

They Have Unique Bad Habits

 

While Millennials have “killed” dozens of industries, Generation Z might be killing industries related to our favorite vices. Gen Z is busy and doesn’t have time to be hungover. They might be killing the beer and alcohol industry, but they might blow up marijuana as it becomes more mainstream.

 

Gen Z perceives marijuana as healthier than alcohol, especially as it continues to be legalized. Overstressed Americans are increasingly turning to cannabis to combat anxiety and insomnia. Investors are turning to cannabis companies to expand their portfolio.

 

They Shop Online

 

Generation Z has embraced online shopping, except for groceries. Generation Z has never lived without Amazon. Because of their comfort with shopping online, this generation is more likely to invest in companies that solely rely on e-commerce platforms.

 

They Are Picky About Brands

 

We have seen two unique trends with Generation Z and what brands they choose to purchase from. Second-hand shopping is popular with this generation because of their interest in the environment and ethical shopping. Investing in companies such as Thredup or Poshmark, which offer resale or stay away from the previous decade’s fast-fashion, might see growth from this group.

 

Traditional clothing retailers may look to influencers and non-traditional marketing methods to stay relevant. Generation Z is passionate and wants larger companies to align with their values and beliefs or they won’t purchase their products or services. Consider Nike’s ads featuring Colin Kaepernick, the controversial quarterback who started the kneeling during the national anthem trend. Nike has seen a boost in sales since Kaepernick became an ambassador.

 

They Have Unique Eating Habits

 

Generation Z may be the generation that changes the food industry in huge ways. This generation is more likely to skip meat, either with a Meatless Monday or all together. They opt for higher quality, non-processed ingredients. Just this year, Burger King introduced the Impossible Whopper, which is a plant-based hamburger. Fast-Casual chains such as Panera or Chipotle are also favored among Gen Z instead of traditional fast food. The food industry will have to make big changes in the coming years to stay competitive with Generation Z.

 

For investors to tap into Generation Z’s spending habits, investors and marketers will have to make changes. Now is the time to structure your portfolio when boomers will not have the largest market share. These are some of the best online brokers for stock trading (Our Top 8 Picks for 2019) if you aren’t yet investing and looking to get started.

 

While the youngest of Generation Z is still in second grade, their spending power will only continue to grow. More of these buying habits will only become more powerful as time goes by.