Millennials Age Out of Focus As Gen Z Ages In

Generation Z, the 68 million Americans born after 1997, spends $44 billion annually, and influence an added $600 billion in household spending.

Companies are revamping their marketing strategies to harness the purchasing power of Gen Z, a digital native customer base more diverse than any other in the country. Seattle-based portfolio manager Bill Smead takes positions in companies based on how they market to Gen Z, as consumers tend to stick with favored brands for life. Says Smead, “Whoever wins this generation will be rich for a long time.” According to Pew Research, Millennials (born between 1981 and 1996) and Gen Z together will form the largest population cohort in 2019, Reuters reports.

Matthew Litfin, a senior portfolio manager at Columbia Threadneedle Investments, said that he has been adding to positions in software companies such as Q2 Holdings Inc and Mindbody Inc that make it easier for small companies like banks and yoga studios to have robust online apps that are similar to their larger competitors. Litfin says that a company’s plans for mobile apps is now becoming a litmus test for potential investments. “We favor companies that are savvy marketers,” he said. “The management teams that say that people don’t care about mobile we quickly remove from our list.”

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