Cost of Living Crisis: How Can Brands Reach Gen Z?

The Cost of Living crisis has overtaken climate change as Gen Z’s number 1 concern. That means all brands must address it. How can you navigate the Gen Z cost of living crisis? Here’s what you need to know.
Fanbytes | Gen Z Cost of Living

In 30 seconds:

  • The Gen Z cost of living crisis is here and it’s the latest in a set of turbulent events for Zoomers.
  • How are young people talking about the crisis? We’ll take you through the ways they are connecting and conversing.
  • #CostOfLiving is trending. How can your brand get involved without sounding tone-deaf?

For Gen Z, the cost of living crisis is very real. Inflation is at a 40-year high in the US and the UK, energy bills and interest rates are hiking up, money is getting tighter and the younger generation are feeling it more than most. 

The cost of living crisis has now overtaken climate change as Gen Z’s number 1 concern. If your brand is trying to reach Gen Z, you need to address this. Gen Zers are activists, so standing by on the sidelines won’t cut it. All brands need to understand how to tackle the crisis head on.

The situation can seem bleak, but for brands looking to reach Gen Z, there are signs everywhere for how you can meaningfully and carefully get involved in the conversation. Understanding the bumpy and uncertain landscape of the Gen Z cost of living crisis will equip you with the right tone, tools and know-how to speak directly to them. This article is going to walk you through this.

The financial landscape for Gen Z

Gen Z (the cohort currently aged 10-25) grew up during the Great Recession – the deepest since World War II. But this group are true altruists: As children, they also learnt about climate change and it became their leading concern, earning Gen Z a reputation as the “sustainability generation”. 

The pandemic was a huge influence on Gen Z. This group have seen first-hand the staff layoffs and global supply chain issues it caused – contributing factors for why inflation is so high now. And of course, the Russian invasion of Ukraine has exacerbated the cost of living crisis.

In short, Generation Z are witnessing a series of difficult global events. Each has influenced them significantly. It’s unsurprising that they are worried about their future – but they are minded to support themselves and others.

Financially, Gen Z is a fearful generation with just 41% believing they will ever be able to negotiate ever-increasing house prices to buy their own home. 51% think they will not be able to retire and live comfortably when the time comes. But Gen Z are finding ways to abate this worry: many Gen Zers are already saving for pensions, while more are teaching themselves financial skills with the help of social media. 

That said, nearly half of Zoomers say they have less emergency savings now than at the start of the pandemic, and the cost of living crisis is exacerbating this worry. Deloitte found that UK Gen Zers’ confidence levels in disposable income are at an all-time low after a quarter-on-quarter fall of 23 percentage points to -49%. The result? The Telegraph reports that Gen Z are driving a £25 billion spending plunge as income shock hits young adults. 

For brands, this can look daunting. But understanding Gen Z’s motivations does point towards opportunities, too.

After pandemic-induced restrictions were lifted last year, under 24-year-olds sought to spend on socialising. Gen Z spent on concert tickets, movies and fashion in particular, in a bid to improve their mental health and combat loneliness – a well-documented struggle for this generation. 

Gen Zers therefore have two main priorities: future planning and self-care in the here and now. These are difficult to balance, so brands need to be aware and provide supportive communication, so that young people feel empowered to live the life they want to lead.

Hard grafters in a turbulent working world

As their demographic are young in the workplace, Gen Z has less disposable income – and so they are feeling the increasing cost of living more than most. Almost half of Gen Z lives paycheck to paycheck. 

This has caused a “failure to launch” as more young people are compelled to delay moving out, or feel hampered by rent to the extent they have had to radically change their spending habits.

Teens ranked having a well-paying job as their #1 financial life goal. To make that happen, this hard-working group takes matters into their own hands: Deloitte found 42% have taken on a side hustle to help navigate the cost of living crisis

Unsurprisingly, pay and burnout are the top factors driving job turnover among this generation. Brands reaching Gen Z need to be cognisant of the pressures this generation faces, to help them feel supported.

Will Gosling, partner and human capital lead at Deloitte, said thatGen Z and millennial workers are looking for a positive work/life balance and help with the cost of living.” For employers of Gen Z, aligning with these values will help attract the best talent. But how can consumer brands market to Gen Z in a sensitive way, and create content that genuinely helps and resonates with them?

Gen Z Cost of Living: learning from social media

Despite the shadow the Cost of Living crisis is casting over Gen Z, this savvy generation are finding their way through with the help of social media. TikTok, especially, is shining a light on current difficulties and it’s becoming the go-to place to find practical solutions as well as bond over down-to-earth advice.

Tons of videos are emerging with the #CostOfLiving hashtag, accruing over 600 million views already – and counting.

TikTok is now the fastest-growing news source for UK adults and is Gen Z’s favourite search engine. Nearly 40% of Zoomers prefer searching on TikTok over Google: it’s the most accessible way for young people to learn about culture, news, and socio-economic issues. 

TikTok’s personalised algorithm and the “For You Page” means young people see relevant content that suits their interests 24/7, and TikTok’s search feature is fast and effective – it’s the easiest way to find and share the right content with the right people.

So what kind of content is Gen Z creating on TikTok, and what can marketers learn from it?

1. Sharing experiences

TikTok champions authenticity. 64% of users say they can be their true selves on the app and 33% of Gen Z even went as far as to say their online identity is their most authentic self. In the midst of this crisis, TikTok users are being real. They’re sharing their stories openly – often leading to a buzz in the video’s comments section.

Take this TikTok video for example. TikTok user Nat Roberts (@sagesolitude) talks about how much money she has left until pay day and how difficult she’s finding paying for her travel to her new job. Her TikTok video is bringing a community together in the comments section, with other users commiserating – for example, by saying “ME but I don’t have enough to pay next month’s rent”.

Notably there are also other users trying to help the situation. One commenter mentioned “16-17 railcard costs £30 and gets you half off train tickets till you turn 18, worth looking into 🙂” and another stated “search for any potential food banks near you maybe?? I’m so sorry your going through this it’s such an awful predicament the uk is in rn:((“

Not only are users finding this kind of content relatable, but they are sharing advice. Of course, this guidance isn’t just helpful to the creator – other users will see the comments and use it to help themselves.

One comment asking “Maybe ask your job if they can pay for your travel?” got 592 likes, showing just how many young people are listening up. 

How can marketers use this?

You need to start by using TikTok as a search engine yourself – just as a Gen Zer would. Look for mentions of your brand or competitors on TikTok. Take a look at the kind of conversations young people are having. If your Gen Z audience is struggling with an issue that’s relevant to your offering, they’re likely to be discussing it online. Then offer them support. 

We use our award-winning data and insights tool, Bytesights to spot when Gen Z are talking about brands online. Its social listening capabilities are a great way to get insights into how young people are feeling – and talking – about issues on TikTok.

Engaging in the comments section is also crucial. 79% of TikTokers take the time to read the comments on videos. So get involved and reply to users’ questions and thoughts. You’ll be amazed at the response!

2. Practical dissemination of the news

Half of TikTok’s news viewers are Gen Z. This is the place they come to find current events, but more interestingly, practical narratives of them. It’s also a place where people come to get answers from their peers. News stories from mainstream sources on older media are becoming less interesting to Gen Z, as TikTok offers a more personal user experience.

@ndainternet Energy Costs are FROZEN until 2024 ❄️📈🤑 Lizz Truss has Announced the UK Energy Price Cap will Stop at £2,500! 📉 Follow Me for more Cost of Living Tips! ✅ #energyprices #costoflivingcrisis #costofliving #fyp #dontpayuk #universalcredit CREDIT @letstackledebt ♬ Violin - Grooving Gecko

TikTok influencer NDA (@ndainternet) believes in educating his followers so they can make the best decisions for themselves. He does this by sharing news stories but goes one step further by providing practical tips and tricks for his followers to use. 

This is what makes TikTok such a valuable news source for young people. You can see current events, global issues and other news happenings but also get practical advice at the same time.

How can marketers use this?

If you’re in the know, you can keep your followers in the loop too. Stay hot on the latest news updates and educate your viewers with information and practical advice. Create videos that show tips and tricks for younger generations to implement. Make sure you’re offering genuine help: Gen Z will see through any marketing spiel. 

3. Budget-friendly tips

It’s not just current events that young adults are talking about on TikTok. There are plenty of creators sharing other practical ways of stretching their monthly income

@mealsbymitch Replying to @renegade_rudi “bUt MiTcH yOu Ay InClUdEd ThE cOsT oF yOuR fLiP FlOpS” 🧐🤓 #cheapmeals #cheapfood #budgetmeals #budgetfood #fiver #costofliving #loadedspuds #potatoes #cheese #cheapmealideas #mealsbymitch ♬ original sound - Mitch 🥘

TikTok influencer Mitch (@mealsbymitch) has created some funny, impactful videos on cheap eats and inexpensive recipes to do at home. As you can see in this video, you don’t have to always be mentioning the cost of living crisis for it to trend for cash-strapped Gen Zers. In fact, it’s a breath of fresh air to get relatable tips that don’t talk specifically about the current climate. 

Just make sure you add the hashtag #CostOfLiving in to ensure it gets to the right users.

The range of guidance on TikTok is vast. TikTok influencers and casual TikTok users alike are giving out helpful, interesting information to get the younger generation through the toughest times.

This viral video from TikTok influencer DuchessOfThrift (@duchessofthrift) doesn’t go where you expect it to: rather than advising users on how to get free coffee, it’s a handy tip for saving on heating bills while working from home.

It’s this person-to-person advice, where tips feel almost conspiratorial, that sets TikTok apart from Google.

How can marketers use this?

Whatever your industry, dedicating a section to budget-friendly advice and tips will help young people find your content for the first time and stick around to find out more. Making practical videos regularly will encourage Gen Zers to click that follow button on social media. This will encourage an active community around your brand and help you understand your audience even better.

Make sure you are keeping your content relevant for your audience. Consider where young people’s frustrations may lie and offer practical solutions

Another tip? You don’t always have to market around your products. Tying in your deals and discounts is useful, but creating relevant content that helps your audience will win their trust and will net you better consumer-brand relationships in the long term.

If you really want to get into Gen Z’s hearts and minds, you can utilise influencers. As you can see from these examples, social media creators truly understand what tips are perfect for their fans, so collaborating with the right influencer could help you make highly engaging content for your audience that’s right on the money (more on this later).

4. Memes

Apart from being a growing news source, TikTok also hosts a world of entertainment. Memes are part of that fun and provide the comic relief Gen Z are looking for. They are calling out tone-deaf cultural moments and sharing them on TikTok. Zoomer humour tends to make light of dark or perturbing instances, as you can see in this video:

How can marketers use this?

It’s not so much using this type of content but more understanding it. Memes can be rocky territory for brands, but taking a look at the most popular out there will help you understand how Gen Z are feeling. It will educate your brand so you don’t fall into the trap of making any faux pas in your content. 

The Gen Z cost of living crisis: what can your brand do?

1. Be transparent

Brands need to be real with their audiences. Gen Z can sniff out incenserity pretty quickly and they aren’t particularly trusting of big business. 

Just 42% of Gen Z said that they trust companies,  which is even lower than millennials. Additionally, only 53% of Gen Zers said brands come across as authentic, vs. 61% of millennials.

So how can you gain their trust in a time when they’re feeling most vulnerable? An important step is to talk openly. Make sure you don’t just pay lip-service to brand beliefs, but embody your values. Even if you are still working on this, young people want to hear you talk about your process – not see you brush it under a rug. McKinsey found that Gen Z are tolerant of brands that make mistakes – so long as they are corrected. So make sure you are truthful and honest. 

2. Meet them where they’re at

If you want to reach the eyeballs of Gen Z, you need to be on social media. 66% of Gen Z consumers state that social media is an essential part of their lives, so connect with them there. 

Being conspicuous on the right platform is essential, but meeting Gen Z at their level is imperative. You need to talk to Gen Z in a non-patronising, understanding manner. The easiest way to do that? Through influencers. 76% of Gen Zers follow an influencer on social media and most importantly, they trust them. In fact, both Gen Z and Millenials are more trusting of influencers than celebrities!

Partnering with influencers will help your brand meet Gen Z where they are most comfortable and talk about the cost of living crisis in the most appropriate way.

Influencer marketing happens to be our thing, and we have a roster of brilliant TikTok talent to choose from plus innovative software to help you find the perfect creator for your brand. Take a look here to find out more.

3. Communicate value for money

In such tough times, Gen Z is looking for deals. But not just any deals: they care about value for money. 95% of Gen Z respondents polled by UNiDAYS’ Fashion Report said they always keep an eye out for a bargain, and 92% said they regularly use discount codes. So giving them some options of money off is essential. 

Group discounts are particularly enticing for this generation as they look to spend time with friends in a post-pandemic world. 93% of Gen Z are drawn towards restaurants which have deals, likely because this is how they are trying to spend their downtime. 

But there’s one important thing to remember. Gen Z is two to three times more likely to be influenced by social media than by sales or discounts. So no matter what offers you send their way, make sure you’re using social media to market them. 

On influencer gifting

The technique of influencer gifting – where brands send free products to creators so they can market them to their followers – is going to become more contentious as the Cost of Living crisis beds down.

Brand-influencer partnerships will need to show a more considered relationship between the product, brand and creator. Gifting will remain – but the creative will need to adapt. At Fanbytes by Brainlabs, we have already developed many influencer video creatives for brands looking to be more sensitive, from communicating the meaning of the product to the creator, to talking about the product’s construction to communicate value for money.

Another key strategy is to create a continuum between TikTok influencers and everyday TikTok users. A user-generated content (UGC) campaign helps build out brand reach, and as Gen Zers overwhelmingly trust UGC reviews, it’s a great way to increase consideration. Combine a UGC campaign with a product giveaway, and you’ll encourage more of your community to feel included as influencers themselves, rather than feeling disconnected from them. 

We’ve worked with influencers to trigger UGC campaigns, including UGC competitions, so if this is something you’d like to explore, get in touch.

The search for stability and solidarity

Gen Z are activists when it comes to the hunt for security, speaking out about social and political issues in their quest to make the world a better, safer place.

They’re on the right page. For example, the majority of Zoomer shoppers prefer to buy sustainable brands and they are willing to spend 10% more on sustainable products. This comes from their desire to support brands that align with their values – which means there is real potential for brands to win them over, even through the cost of living crisis: show you understand their point of view and want to help, and they’ll support you.

Gen Z’s desire for stability is also linked to their desire for trust. They have little faith in the future and are motivated to provide whatever stability for themselves they can muster. If you can inspire trust, you’ll build brand love and loyalty. With energy companies having record profits during a global energy crisis, it’s no wonder that as little as 42% of Gen Zers say they “trust” companies. Make sure your brand is one of those that stands out for all the right reasons. 

If you want a caring, thoughtful and pitch-perfect campaign that reaches Gen Z where they’re at, get in touch. We can chat through your ideas and our creative team are always on board to bring forward killer plans to get Zoomers on your side. 

Let's Talk

To find out how Fanbytes can help you connect with a Gen Z audience, fill in the form to get in touch!