Gen Z vs Millennials: Is Your Business Getting It Right?

It’s official: Brands that understand what makes Gen Z and millennials different have a greater chance of business success. For long-term customer loyalty and engagement, businesses must invest in differentiated strategies that tailor to the needs of each.

Gen Z, born between 1997 and 2012, are the first generation of digital natives – while millennials born between 1981 and 1996 can recall a pre-online era.
With a close overlap between the two demographics, it can be easy for businesses and marketers to confuse both consumer groups.
Research and profiling to develop a better understanding of what differentiates Gen Z and their predecessors is essential, ultimately helping SMEs to grow their business.

If you’re a small business, you probably learned a long time ago that a one-size-fits-all approach doesn’t work. This applies to running your business, managing stakeholders, and entering new markets. The same is true of customers.

How much time do you spend examining your target audience and what makes them tick? If you’re serious about success, this area of your business needs to be constantly evaluated.

As any marketer will tell you, there are endless ways to slice an audience. A typical approach is to dovetail simple demographics like age, gender, and location with psychographic profiling such as preferences, habits, passions and goals.

When it comes to filtering the audience groups you want to target, one demographic split that comes up again and again is generational. By following generational shifts closely, we now know far more than we used to about boomers vs Gen X, what motivates millennials, and what Gen Z cares about most.

Figuring out Gen Z and millennial consumers

It can be tricky to differentiate between millennials and Gen Z. The youngest and oldest of both groups are adjacent, and therefore similar.

A group of millennials, a male and two Asian females, sit leaning against wall looking at phone

As a small business trying to understand your customers, small details matter. Having clear targeting and profiling for these highly influential demographics can steer your business to greater success.

Whether you’re targeting one or both, there are key attributes that make them different. Here are the different tactics for engaging Gen Z and millennials in a digital-first world:

1. Online purchase habits and the world of e-commerce

Most campaigns or strategies for marketing and selling to these demographics will be online-focused. Both groups are mobile-first, consuming online content voraciously. But failing to see where the two groups diverge can lead to e-tailers and business owners making some rookie mistakes.

According to DCDX’s 2023 Annual Gen Z Screen Time Report, Gen Z spend an average of about seven hours per day on their smartphones. Millennials, however, spend about three hours and 53 minutes on average on their phones per day.

Understanding these habits when it comes to content creation is crucial. Bottom line: don’t waste resources on longer videos to promote your brand if you’re not sure how it will land.

Plus, members of Gen Z are twice as likely to make a mobile online purchase than millennials. Optimizing the purchase journey for this device is a number one priority when targeting Gen Z.

Younger consumers are also more open to supporting new-gen brands. This is great news if you’re a small business. Whereas older millennials may have grown up with less choice, trusting major, well-known labels that have built a reputation over time, Gen Z embrace up-and-coming, smaller operations they discover for the first time on social media.

Happy Gen Z female laughing on video call next to multicolored wall

And e-tailers: who are you partnering with to promote your brand? While millennials may be more influenced by traditional KOLs and content creators with a large following, Gen Z spend more time on TikTok. That means they’re accustomed to seeking opinions and expertise from peers on the platform who are relative unknowns. The power of creating a cultural or viral moment will be more important for Gen Z than a brand campaign.

Make sure to do your research. So many other factors – like how they engage with ads, and the type of content they consume, from podcasts and how-to-tutorials to reels – set millennials and Gen Z apart.

Takeaway for millennials: As digital pioneers, not digital natives, unlike Gen Z, many millennials didn’t grow up with always-on connectivity, on-demand content, and 24/7 news cycles. Sometimes, this group will seek more authentic, offline moments and experiences that remind them of the analog age.

Takeaway for Gen Z: According to a HubSpot survey, Gen Z and millennials use Instagram and YouTube for practically the same amount of time, but when it comes to TikTok, Gen Z are way ahead. Research platforms – including emerging ones – to map your social media strategy.

Bonus tip: While there are endless nuances across both groups, the reality is that most brands and businesses struggle to set aside the time and budget to target both separately. That’s why many focus on the ‘sweet spot’ – a crossover audience of younger consumers, say 18-34, as a broad target.

To get going, zero in on what they have in common rather than what makes them different. This might be an online campaign on a specific social media platform that resonates. Build out the characteristics of your brand or product that will engage both. After, analyze the results to see which demographic your campaign appealed to most, and refine or drill down further next time.

2. Customer service and customer experience

Delivering the kind of customer service Gen Z and millennials demand from the brands they buy from is no easy feat. Gen Z in particular grew up in the age of instant gratification, and they have set a high bar for customer service response times.

Asian female receptionist with headset working at call center

What unites both Gen Z and millennials is a preference for direct messaging on social media to resolve queries. The truth is: the rise of social media messaging platforms has changed the face of customer service.

Telegram, LINE, Viber, WeChat, WhatsApp: the list of platforms goes on. With more young people using social media platforms as search engines, expectations are growing for businesses to be omnipresent on these channels and provide full messaging support for customer service requests.

Takeaway for millennials: Older millennials still prefer to seek support via email and phone. Win trust by making sure your customer service strategy goes beyond social media.

Takeaway for Gen Z: What sets Gen Z apart is a willingness to proactively problem solve using self-service options. Businesses that tap automation and AI-assisted models can meet this audience wherever they are, 24/7.

Bonus tip: Remember that delivery matters. Delivery is now considered a key element in the customer experience journey. Convert both audiences into repeat customers by taking a customer-first approach to delivery. You can work with FedEx to offer total visibility and tracking, share options for collection and door-to-door drop-off, and provide options that prioritize convenience, flexibility and speed.

3. Attitudes to privacy and interacting with brands online

The psychology of how people act online is crucial for today’s brands to understand. When social media was in its infancy, online users tended to overshare, in some cases failing to protect their privacy. Online blog posts and Facebook updates were highly personal and public. Many older millennials wore their heart on their sleeve back then - and can still be lax when it comes to privacy.

IT administrator types on laptop with security symbol icons

In contrast, Gen Z are hyper-concerned about privacy. They’re vocal about online data protection, and suspicious about how brands and entities are harvesting that data. Gen Z are far more intentional and selective with the information they share online, gravitating to mediums like Snapchat or Instagram Stories to share short-expiry content that won't live online forever.

Businesses that demonstrate efforts to be responsible and respect younger consumers’ non-negotiables on privacy will win loyalty and trust.

Takeaway for millennials: Educate this group. Add opt-outs and cues on your website and online channels that signpost how you’re protecting privacy – and remind users to do the same.

Takeaway for Gen Z: This group doesn’t want any filler. If a Gen Z audience has signed up for your mailing list, give them high-quality content and discounts that prove your value to them as a business. Misusing this important channel will lead them to unsubscribe fast – and maybe switch off from your brand altogether.

Bonus tip: Take time to review your policies and online compliance. Previous methods for interacting with customer data or protecting privacy may be outdated.

Audiences continue to change – so you should too

When it comes to audiences, there’s always more to unlock. As well as learning about Gen Z and millennials as consumer groups, many businesses will need to hire them in the workplace. Here, too, both groups have very different attitudes and needs.

As a final takeaway, remember that although generation gaps exist and audiences are diverse, consumers still unite around important social issues. More than ever, Gen Z and millennial audiences want brands to be environmentally and socially responsible. To stand out, find ways to prove to them that you are an ethical, sustainable business with clear core values. When it comes to younger consumers, your actions matter.