In a blow to the ego of millennials everywhere, Goldman Sachs researchers say that the Gen Z cohort now matters more. That’s because "[their] diversity, fluency with technology and conservative attitudes toward money will have profound social and economic implications," analyst Christopher Wolf said in a presentation. "Never before has there been a generation incapable of remembering a world without the internet."

Research is evolving on how Gen Z has been influenced and what type of consumer they are becoming. Here's a look at the demographics, latest shopping and advertising preferences and importantly, how this generation thinks about spending.

The sociology of Z and views of money

Born after 1995, Gen Z numbers about 60 million in the U.S. and some 2.6 billion worldwide, according to data from Social Explorer. Research provided by Frank N. Magid Associates gives the U.S. breakout as 55% non-Hispanic Caucasian, 24% Hispanic, 14% African-American, 4% Asian and 4% multiracial.  

"This is America’s most diverse generation to date," Wolf said. "By the year 2020, the Census Bureau is actually forecasting that over half of Gen Z kids in America will belong to a minority race or ethnic group. So diversity in the traditional sense of the word is actually becoming the norm."

Shaped by watching their millennial elders endure the Great Recession, a key defining attribute of Gen Z is their financial conservatism, according to Wolf. "This might be the area in which they differ from millennials the most. This is a generation that is really laser-focused on the financial consequences of their decisions."

They're aware of rising college costs, and "they are more concerned about taking on the student loan debt," Wolf added. "One of the most interesting observations is that 60% of Gen Z believe that a lot of money is evidence of success, which compares to just 44% of millennials when they were the same age."

Judicious spending puts pressure on brands

In step with Goldman Sachs, a new study on Gen Z by The Center for Generational Kinetics found that 24% of Gen Zers intend to pay for college through personal savings, while 38% plan to work during college. Already a majority are earning money through part-time jobs and household chores.

Jason Dorsey, co-founder of The Center told Mobile Marketer that moreover, it's a group that will rely on debit payment systems, not credit cards, and could be expected to lease cars or lean more on Uber or Lyft. "They are comfortable with paying for usage rather than ownership, so that shift will be interesting," Dorsey said. They also indicate they're willing to forego top schools for less expensive colleges and local community schools as a result of their aversion to debt.

The Center’s study found that 29% believe personal debt should be reserved for a few select items and 23% believe it should be avoided at all costs. In explanation, Dorsey told Mobile Marketer that Gen Z’s interest in holding onto money is more from a desire for stability as opposed to status.

Regardless, the cautious approach to spending, "is a real problem for a lot of brands," Dorsey said. "We are a research and consulting company for brands, and when you have a generation that is fiscally conservative and focused on getting more value for their money it is a big challenge. It puts pressure on the business for the brands."

How, where and what they buy

Partly because they're so frequently photographed, Gen Z has begun to turn away from fashion with prominent brand logos, according to Dorsey. "Gen Z is the first real social media generation. They are constantly putting photos up, and as a result when you have a clothing item readily identifiable it goes out of style faster. With three views you can’t wear it anymore."

This presents a "double whammy" for brands, Dorsey said. They're losing sales and also losing the publicity from exposure of branded items. Seizing the opportunity, Target recently introduced a clothing line called Art Class designed with the help of 10 trendy Gen Zers, with collections that refresh every four to eight weeks.

That being said, don't assume Gen Zers are shop exclusively online, for they very much enjoy shopping in stores, particularly when it comes to clothes, shoes and makeup. But with their mastery of the online universe they're keenly aware of deals and prices, and because they were born into a world where online opinions abound, seeking out ratings and reviews is part of their DNA.

With that in mind, when shopping in stores Gen Zers expect retail associates to be on their game. So to win with Gen Z, retailers must be sharp with both the in-store and online shopping experiences. According to a Euclid study, 28% of Gen Zers said they would ask for associate input, compared to 21% for all other age groups.

Some favorite retailers currently include Urban Outfitters, UGG, Gamestop, The North Face, Sunglass Hut, American Eagle, Forever 21 and H&M. And like all age groups, Amazon ranks high as well. As a gender-specific note, guys spend more on products, while girls spend more on experiences.

Where they go and who they believe online

The screen is mobile and their hands are pretty much always on it. Snapchat, Instagram and Facebook are prevailing, according to research from advertising agency SCG.

While Gen Zers regularly consult family and friends on purchases, according to The Center of Generational Kinetic's study, YouTube ads came out on top in believability. Meanwhile, according to published research from Kantar Millward Brown, humor, good music or a good story is what can most get and hold their attention, while celebrity endorsements meant little. And in an interesting twist, cinema ads were cited as a favorite format, whereas digital ads are among the least favorite, presenting a conundrum for brands. Perhaps because Gen Zers view their phones as an extension of themselves, they don’t want them invaded with ads.

Still, brands need to meet Gen Z where they're already spending their time. Adidas CEO Kasper Rorsted recently revealed plans to drop TV spots in favor of mobile-based marketing. The Coty Company is also reallocating marketing dollars to digital across all its divisions and regions.

But getting the message right will be crucial to win over Gen Z.

"It’s more than shopping. How you advertise with them must resonate. Like those brands with videos that are not even trying to sell you something, videos that have meaning, that inspire,” Jane Cheung, global leader for consumer products for the IBM Institute for Business Value and leader of a joint IBM/NRF Gen Z study, recently told Mobile Marketer's sister site Retail Dive. "It's way more comprehensive than engagement only for shopping services."

From a technology-use standpoint, Gen Z are now the leaders, Dorsey said. "For the first time we are seeing the tech trends from the youngest driven up to the oldest. If you want to see what a 40-year-old is going to do later, see what the 16-year-old is doing today."