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Generation Z: Trends, Purchasing Habits, and Favorite Brands in Aftermath of COVID-19 Pandemic and Lockdowns

July 14th, 2020 by Peyton Rosenberg

Peyton L. Rosenberg
Summer Intern
www.arrivalcapital.com

July 2020
Generation Z: Trends, Purchasing Habits, and Favorite Brands in Aftermath of COVID-19 Pandemic and Lockdowns

The Coronavirus has affected financial markets both positively and negatively throughout the last five months by, in general, hurting the restaurant and travel industry and helping industries like electronic gaming and online commerce. The impact Generation Z (cohort born between 1996-2012) has had on the economy both before and during the COVID-19 pandemic is very important and will be for years to come after the pandemic has run its course. The lockdown changed the way Gen Z spent their money and their time in many ways as we will see.

The day of a typical Generation Z member during the lockdown involved the usage of lots of online programs such as Zoom (ZM), Seamless (owned by GRUB), Hulu (owned by Dis), Netflix (NFLX), and YouTube (owned by GOOG). At the beginning of the lockdown while online school was still taking place, Zoom was used every day by almost everyone who is part of Gen Z. Many schools are also looking to use Zoom in the future. Zoom was also used to see friends during the quarantine. When not in class on Zoom, Gen Z members used lots of streaming services such as Disney+, Hulu, and Netflix. Everyday throughout the lockdown these streaming services have been used for hours upon hours.  Along with watching TV and movies for entertainment, video games were really popular. There are many large and popular video game companies that Gen Z uses games from, such as Take 2 (TTWO), EA (EA), Activision (ATVI), CD project (OTGLY), and Ubisoft (UBSFY). YouTube and Twitch (a video game streaming service owned by AMZN) were also used as entertainment very frequently. The sheer amount of time spent on these streaming services and games shows that even after the lockdown is in the rearview mirror, Gen Z will continue to use many online services for many hours each day.

During the COVID lockdown members of Gen Z have been gaming for more hours at a time and more frequently throughout the day. Surveys show that Gen Z has been trying new games, watching esports, and using other gaming services all during COVID. In order for the new Gen Z gamers to continue gaming after the lockdown, the game developers and the console companies need to find ways to grab onto and hold the massive amounts of new players, they also need to convert the new gamers into more serious game players. If these companies can do this, it could be really beneficial for the gaming industry over the long term and would lead the stocks to continue to rise. In the future, video games could be designed even more as a way for players to socialize with one another, which would be very popular among Gen Z because they are already doing this during COVID lockdowns on current games like Call of Duty and Grand Theft Auto.

Another way COVID affected Gen Z was through social media. Most of Gen Z is using social media to stay connected with their friends through the virus lockdown. Some of the most popular social media services among Gen Z are Instagram (FB), Snapchat (SNAP), and YouTube (GOOG). More and more people from Gen Z are also starting to use Reddit. There has also been a large increase in twitch users in the past two months which will definitely help out Amazon.

A huge form of entertainment for Gen Z during this lockdown has been watching TV and movies throughout the day on streaming services along with watching programs online. Twitch and Youtube are very popular forms of online social media entertainment among Gen Z, who watch them hours at a time. Another extremely popular form of entertainment among Gen Z is binge watching TV shows. The most popular way to do this is by using streaming services like Disney+, Hulu, Netflix, and Amazon Prime Video.

During the Coronavirus lockdown Gen Z still needed to go to school and get an education. The ways schools educated their students was through online education. Schools across the US used many different programs to teach Gen Z such as Zoom, and Google meet. Teachers also used educational videos on YouTube and Khan Academy to teach their students. The teachers also used virtual textbook software so that the kids were able to easily access the textbooks. In the future teachers and schools will definitely look to integrate more online learning in the future because of its convenience. This would benefit stocks like Zoom, or Chegg (CHGG) in the future.

In some ways, the favored brands of Generation Z pre-dated COVID and may still change after its end. However, there are some brands that Gen Z will never stop using as shown by their continued use during the pandemic lockdowns. In the future, brands favored by this generation will undoubtedly see even more success. The brands most favored by Gen Z are: Google, Netflix, YouTube, Amazon, and Walmart (WMT).

In conclusion, the coronavirus has caused Gen Z to move more of their life online. In entertainment, Gen Z is heavily using streaming services and will definitely continue to use them. Gen Z, throughout the lockdown, had also been playing a lot of video games. Although they have been playing more than they would have during a more normal time, this lockdown introduced gaming to many in Gen Z. This is why video game companies will still see continued success well into the future. Lastly, online education was a huge part of this coronavirus lockdown for Gen Z. Zoom went from being rarely used to one of the most used programs in the United States during the spring. Teachers also had used online education programs like Chegg, or even YouTube to help their students. Overall, technology use by Gen Z will continue to accelerate, especially in online education, media streaming and video games. The COVID-19 lockdown made the already heavily online and tech dependent Gen Z even more tied to their devices, digital services and brands.

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