Millennials and members of the subsequent Generation Z are markedly different in how they shop, interact with brands, and view money. For marketers and business owners, understanding the nuances and personality quirks of each generation is part of the fun — and part of the challenge.

Understanding each audience helps us craft the right message on the right channels, and a deep demographic dive is especially important if young people comprise a big portion of the audience you market to. Gen Z simply doesn’t respond to offers and marketing campaigns the same way that millennials do, so it’s time to study up on key differences between these two groups.

We’re defining millennials as those born between 1980-1995 and members of Gen Z as those born after 1995. For more analysis on millennials, see 5 Things You Think You Know About Millennials That Are Probably Wrong. These characteristics were discussed at a shop.org session featuring YPulse, Dormify, and American Eagle, in which each business shared their experiences with millennials vs. Gen Z.

Gen Z is pragmatic. Millennials are idealistic. 

Millennials were an optimistic generation that’s often seen as being pandered to by parents and adults in their lives. Evidence: the proverbial millennial participation trophy. Meanwhile, those in Gen Z are more pragmatic. While millennials were raised during an economic boom, Gen Z grew up during the recession.

This generation has been shaped by the economic pressure that occurred during their childhood years, when their parents and communities may have been struggling with employment and finances. Thus, the most successful marketing toward Gen Z focuses on long-term value and smart investments.

Gen Z is focused on saving money. Millennials are focused on ‘experience.’

Today’s teens tend to be more highly interested in saving money than millennials were at that age. Gen Z is attracted to purchases that maximize the value of every dollar, whereas millennials are more interested in the entire experience of buying a product.

Gen Z’s interest in conservative spending is a direct result of growing up in a time of economic turmoil — and conspicuous consumption isn’t attractive to them. They’re wary and mindful of their money running out. When marketing to them, stressing high-quality investments and offering plentiful deals and bonuses (like free shipping or freebies) is a smart strategy.

Millennials like authenticity, but Gen Z takes it to a new level.

You probably already know that millennials prefer brands that champion transparency and share their values. But Gen Z is even more obsessed with finding brands that feel authentic. For example, Dormify, a shop offering decor for small spaces, finds that darker, lower-quality imagery works best for Gen Z. Showing real customers’ before and after photos instead of photoshoots has brought the most success. Similarly, American Eagle shared that its no-Photoshop policy has deeply resonated with younger teens who don’t want to see content that feels too fake or staged.

Gen Z wants to see content that’s actually attainable and not overly polished. Consider leveraging influencer marketing to tap into content that resonates with Gen Z from trendsetters they already respect.

Gen Z shops in stores, millennials online

Millennials are professional online shoppers. They pull out their smartphones or laptops anytime they want something new. They watched the world go from AOL dial-up to always-on connectivity, and they take advantage of this convenience at every turn. Perhaps some of the recent brick-and-mortar blight is due to millennials’ move away from the mall.

However, Gen Z actually prefers to shop in stores. They like to feel and see products in person to make sure they’re buying something high-quality, and they’re also keen on unique experiences that happen in stores (like beauty classes at a makeup store or exercise classes at an athleisure apparel store). Think about how you can bring more teens into your stores (if you have physical locations) with educational or social media-worthy experiences.

Millennials cozy up to brands. Gen Z favor independence. 

When millennials were in middle and high school, brand names were all the rage. Emblazoning t-shirts, jeans, and shoes with the hottest brands was how they showed your fashion sense. Now that they’re adults, millennials may be willing to pay more for their preferred brands.

Gen Z, on the other hand, doesn’t want to be defined by any brand other than their own. (Just watch this recent SNL spoof on “woke jeans” for proof.) They want to celebrate own independence, and they use social media to find communities where they feel they belong. So the best marketing approach for Gen Z is to celebrate the individual, telling customers they can be whatever and whoever they want, not trying to prescribe a specific or too-narrow image.