Over the course of the past few years, marketers, policy makers and businesses have moved on from their obsession with Millennials. Now, there is a new cohort on the scene. Those born between the turn of the millennium and today are growing up and beginning to enter the workplace – which means all eyes are on them as brands look to tap into a rapidly growing market.
Exactly who Generation Z are varies substantially depending on who you ask. According to The Futures Company, we should be calling them Centennials and they are a generation less self-absorbed, and more self-assured. Meanwhile, The Sound tells us that we should be referring to them as Generation Edge – due to their realistic, resilient and resourceful nature. We are even yet to decide on exactly who is a member of Generation Z, as consultants’ answers range from those born from 1990 onwards to those born from 2005 onwards.
But one thing is for sure: if Millennials are the consumers of today, Gen Z will be the consumers to tomorrow. So for businesses that want to get ahead, building trust with this latest cohort is crucial – and that means understanding them, their environment and how their experiences will shape their lives to come.
What Do We Know?
The oldest of Generation Z are barely graduating college and many more are still in education. Their spending patterns will fluctuate wildly in the next few years as they grow more independent and confident in their decisions. So while it may not be practical analyse their current spending, we can look at the environment they have grown up in and examine the impact this will have on their future.
Generation Z have spent their formative years in an economic downturn. From the Great Recession to the infamous sub-prime mortgage crises - the world has seen some of the greatest financial hardship of the last century. Combined with terror attacks that have defined nations and riots that have changed our social discourse, it’s easy to see the effect this has had on the consumers of tomorrow.
Research presented by Marketo found that 60% of Generation Z want to make a positive difference in the world and 76% are concerned about humanity’s impact on the planet. Similarly, the Cassandra Report Z found that 48% of Gen Z care about helping the poor and 80% support same sex marriage.
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|"60% of Generation Z want to make a positive difference in the world."|
This is an important finding for business owners & marketers as it exemplifies the difference between cause and purpose. While Millennials have been defined by causes, Generation Z will be defined by purpose. It is brands and organisations that must become the enablers of this, achieving a balance between business objectives and wider responsibility.
How Will Your Brand Save the World?
Growing up in a connected world, where technology is integrated into our daily lives, Gen Z have almost paradoxical views. They are realists: understanding the impact of economic, social and environmental issues. Yet they are also optimists with a strong work ethic that value their own contributions to the world and improving the worldwide community. Technological literacy, fluid forms of communication and global citizenship have helped cultivate these traits over the course of a decade.
With such unique and altruistic personality traits, the question on every marketer’s lips is: how can my brand with Generation Z? But this is not the right question. The question we should be asking is: how can my brand save the world?
Unlike their Millennial predecessors, Gen Z have grown up with stories of corporate social responsibility (CSR) failures. Activism and the internet have facilitated a society where paper thin intentions are exposed and no amount of paid advertising can stop it. The new generation have seen CSR efforts unmasked as simple marketing ploys. Words without meaning, change without impact. And this has made them sceptical. So if brands want to evolve and become relevant to the next set of young consumers, we need to make some significant changes that reach far beyond marketing and branding.
The New Age of Business
What do these changes look like? Simply put, they are a change in attitude combined with a change in structure. Social responsibility needs to be taken out of the marketing department and applied across the whole business. Rather than using affirmative language and supporting important causes for the purposes of media exposure, businesses need to begin living it.
Generation Z can tell the difference between businesses that support causes for the sake of improving their image, and those that truly believe in a better future. Those that have found a way to align their brand with visions of a better world are already reaping the rewards. Nationwide, for example, discovered the key to building trust with Gen Z consumers was authenticity and empowerment. Read the full case study in this fascinating Marketing Magazine article.
This is why Generation Z will matter. Every new cohort brings with it new challenges that force brands to adapt. Millennials drove the dramatic growth of branded content (in all its forms: from blogs to video and more). But rarely does a group come along which challenges our fundamental view of what a business is, and why it exists. Some of the most popular businesses of the day, which resonate with Gen Y & Z alike are not built to sell a product, but to facilitate an authentic, personal interaction.
|"The brands that resonate with Gen Y & Z facilitate authentic. personal interation."|
Airbnb, Uber, Snapchat and PayPal all operate in disparate markets (ranging from financial services to travel and communication) yet fundamentally all share the same business model. They facilitate interactions between users to create an authentic, human experience. For brands that want to not only survive over the coming decades but thrive, this is the way forward. Whether you adopt a similar app-based model, or find other ways to achieve the same output, one thing is for sure. Authenticity and human connection will drive the next age of business development.
It is, of course, important not to forget research in all of this too. As Gen Z demand more authenticity and relevance from brands, brands themselves must adopt new ways of researching consumers. Combining Big Data analysis with moment-to-moment interactions and an in-depth qualitative understanding will help you align better than ever before with the exciting, new, world-changing generation of consumers.