As it often has been before, the USA is far ahead in defining and researching new consumer trends. Here I will share recent research reports combined with my own observations. I have tested my own observations on some of the six children I have been blessed with from two marriages. The feedback I received was characterised by realism and self-deprecation. Good atmosphere.
Gen Z is ethnically diverse, socially tolerant, globally connected and environmentally aware. It belongs to what is the largest generation on the planet this year. They are the world’s largest consumer group and in the USA alone constitute 61 million individuals with spending power who consume USD 143 billion per year. They were born into a social media world and are definitively different to the digitally native millennials
In all channels – on every platform
They socialise 24 hours a day. They are never offline and wake to a new day full of activity on their mobile phones. During the night they have received a pile of snaps and messages, which they respond to almost immediately. They don’t use email or Facebook but consume Insta and YouTube. They barely know what a TV ad is. And if information can be communicated via text, don’t ring.
On Instagram they often have several accounts. A test account, a private account on which they publish more informal pictures and a public account where they publish the “perfect” pictures. Interestingly enough, there is also quite a lot of self-deprecation in this. They watch YouTube but they hate pre-rolls. Gen Z is still on Facebook but they snoop more than share, and they trust content marketers as long as they feel it’s good content. For them, good content is real content. This paradox also induces self-deprecation among Gen Z.
At high speed to the perfect life
Generation Z has grown up with parents who have told them that they have unlimited opportunities. They don’t trust anyone but have faith in everyone, particularly if they are funny. They have a strong conviction that everything will sort itself out, regardless. Their parent’s generation has assured them of this throughout their life. Their world is in a constant state of change, while they have never wanted for anything or experienced financial worries. Generation Z has received a higher level of education, is more ambitious and more change orientated than any other generation. They also have higher expectations than previous generations, both for themselves and for their surroundings.
After a year (maybe 6 months) in a new job, promotion is regarded as natural. They regard themselves as entrepreneurial, and around one half of them don’t consider themselves anyone’s employee. The world is a playground as much as it is a workplace. They are extremely optimistic and believe that anything goes. Nothing is sacred. Everything will sort itself out. They constantly use Snapchat, and if you want to grab their interest you have less than 10 seconds to do so.
Demanding and ambitious
This reflective and network-seeking generation will not be seduced by traditional brands or popular celebrities. They are very concerned about things being authentic, honest, transparent and just. They are impatient and critical. They give a brand new meaning to the term paradoxical.
They regard the generations before them as representing overconsumption, capitalism and materialism. They are fascinated by the sharing economy and simplifying daily life. They would also like to be responsible consumers and feel it is trendy to be a good person. In addition, surveys indicate that they are concerned about the environment, health, the planet, feminism and bullying. And such like.
From a different perspective they are also called the Snowflake generation in the USA, i.e. their parents, referring to the film Fight Club from 1996, see their children as “unique snowflakes” who deserve special treatment. The expression snowflake generation describes a generation that many people perceive as self-centred and easily offended; who have been raised by their parents in a way that has made them spoilt and which has given them an exaggerated sense of their own uniqueness and importance.
The British author Claire Fox says that this generation “is genuinely affected by ideas that are in conflict with their world image” and refers to the fact that they are overrepresented with regards to mental health problems. She believes that this is often combined with a demanding attitude and that it is their parents who have overprotected them by failing to set boundaries or stand up to them when they were growing up. Thus, they experience problems more easily when they start upper secondary school and encounter more resistance.
Here are some characteristics of Gen Z that finance, data and media company Bloomberg has analysed.
- They can be “influenced”
While the generation before them, millennials, received their university education before Facebook became a part of the household, Gen Z lives on Insta and Snap. Over 50% of them primarily use social media to check out new products, a jump of 10% from the millennials and twice as often as their Gen X parents, according to a new survey by Bloomberg News and Morning Consult.
This means that “influencers”, celebrities or bloggers with large groups of followers, who are paid to market products, have a huge influence.
- They have different vices
Gen Z don’t like hangovers and, surprisingly enough, are keen to wake up at the weekends, feel well rested so that they can get out and take selfies. At the same time, the threshold for soft drugs such as marijuana has lowered. It is regarded as being healthier than alcohol and is now legal for adults in 10 American states.
- They don’t feel the need to go shopping
Gen Z is perhaps the first generation to embrace online shopping. Just 83% of them state that they primarily purchase goods in a physical store, compared to 95% of baby boomers and 87% of millennials. The survey also shows that Amazon is one of the favourite brands of Gen Z consumers, who have grown up with the e-commerce giant.
- They choose their brand preferences with care
Gen Z could be bad news for the traditional clothing retailers that inhabit shopping centres and which are already being impacted by online shopping. The Z Generation also likes the second-hand market and are industrious users of various websites such as Finn, Tise, Vestiaire Collective and Thredup. Over the next couple of years, these will become bigger than “fast fashion”, according to Thredup’s 2019 Resale Report. In conclusion, when, as a mum or dad, you struggle to accept that your young hopefuls are spending money they don’t have on the most recent innovation, give them some cred when one month later they sell it on Finn or Tise. Like other second-hand markets, they deliver in terms of both affordability and sustainability.
- They eat (somewhat) differently
In the USA, Gen Z is more likely to skip a meat meal than their older counterparts, and fast-food restaurants are changing. Recently, Burger King tested a plant-based “Impossible Whopper”. But even if eating habits are changing, Burger King and McDonald’s still dominate. Drive-thru sales are growing, and Gen Z often orders sweet potato fries as a side.
The consequences for marketing
So what does this mean for investors and marketeers who are trying to tap into Gen Z’s buying habits? New generations are never as predictable as marketeers would like them to be, and it will still take some time before Gen Z preferences materialise. But for future-orientated investors and marketeers it is time to think about how a portfolio for the post-boomer economy should be structured and formulated.