Photo: @Yuliasis via Twenty20
Will Gen Z be the ‘most disruptive generation ever’ for retail and brand marketers?
A Bank of America report describes Gen Z as the “most disruptive generation ever,” due not only to their technological savviness but also for their focus on sustainability and activism.
The report, “OK Zoomer,” defines the generation as individuals born between 1996 and 2016. Findings are based on a global survey during August of over 14,500 individuals.
Gen Z — the oldest of whom are currently aged 24 — will surpass Millennials’ earnings power by 2031, with overall spending power augmented to the “Great Wealth Transfer” from Boomers and the Silent Generation.
With 45 percent of the group online “almost constantly” and the overall generation treating internet access “as necessary a utility as water or electricity,” Gen Z is expected to accelerate some Millennial trends, including e-commerce, shifts toward streaming media and emerging payments, such as cryptocurrencies and mobile wallets.
But Bank of America contends Gen Z are “true digital natives” and characterizes Millennials as “playing catch-up.”
One difference is Gen Z’s preference for products over experiences. Luxury is seen as a beneficiary as Gen Z gains more clout — “status symbols continue to matter for the next generation with social media an ‘always on’ place to measure and compare social makers.”
Gen Z’s commitment to sustainability stands out, as well, and related headwinds cited for marketers include fast fashion, meat, cars and air travel.
Their activist focus is also evident as four in 10 Gen Zers see themselves as “citizens of the world” versus just two in 10 Boomers. The report states, “They grew up in the aftermath of the financial crisis and flourished as social rights for LGBTQ+ and movements such as #metoo came to the fore.”
Finally, Gen Z will absorb the brunt of the pandemic’s fallout as many enter the workforce.
Bank of America stated, “These experiences have shaped Gen Z to be a very different generation from Millennials — key activists on climate change, fiscally cautious, valuing luxury/quality over quantity, and better skilled for an automated world. We think financial markets often underestimate these differences, assuming Gen Z to be the same as their predecessors, missing the distinctions that help understand the changing new consumer.”
- Thematic Investing OK Zoomer: Gen Z Primer – Bank Of America
- Meet ‘Generation Covid’ — the newest cohort on the heels of Gen Z – Business Insider
- Gen Z incomes predicted to beat millennials’ in 10 years and be ‘most disruptive generation ever’ – CNBC
- Move over Boomer: Here’s how the ‘Gen Z revolution’ could transform your portfolio, says Bank of America – Financial News
- THE RISE OF GEN Z – Advertising Age
Discussion Questions
DISCUSSION QUESTIONS: Do you see Gen Z behaving somewhat similarly to Millennials or a step-change different? Will their online proclivity, focus on sustainability, activism or some other trait be the biggest obstacle for brand and retail marketers?
Poll
BrainTrust
Karen Wong
Co-Founder & CEO, TakuLabs Ltd.
James Tenser
Retail Tech Marketing Strategist | B2B Expert Storytelling™ Guru | President, VSN Media LLC
While Generation Z consumers behave similarly to Millennial consumers, digital native, social and environmental consciousness is dramatically more relevant to them than it is to Millennials. Most retailers have or are proactively enhancing their online and mobile experiences but some have not paid as much attention to social media to address the needs of Gen Z. The biggest challenge for retailers is to change their power sources to more sustainable energy and to shift their product assortments to focus more on sustainable materials and manufacturing processes.
The stereotypes of each generation are merely generalizations that can help guide retailers when taken with a grain of salt. The concern I have is that retailers often plan for each generation too late. Unless you’re planning to sell only to one generation during a specific stage in their lives, you either have to grow with them or adapt for the next generation of shoppers. Yes, some mass retailers are cross-generational but that’s still rare for the average brand.
Hasn’t every generation been called “the most disruptive generation ever”? Baby Boomers certainly were, so was Gen X and, of course, Millennials. And by the way, Zoomers are a combination of the Greatest Generation, Boomers and Gen X who are over the age of 50, as in 50+ Zoomers, so the report’s title, “OK Zoomers,” is a little off.
Yes, Gen Z is a generation of digital natives, the only one so far other than Alphas, the generation younger than Gen Z. Millennials were hardly playing catch up because they were kids when online became a thing. Older generations adapted but Millennials inhaled technology. Gen Z may spend four to six hours online each day but they still enjoy shopping brick-and-mortar.
Do I think Gen Z will give retailers a run for their money? Absolutely. They will change everything for the better and take the rest of us right along with them.
The digital divide is mind-blowing to me. Their phones are their “go to” source for all information. Find the meaning of a word? Check out how something works? Find support or contradiction in a news piece? Could that silly thing on Instagram be real? They have encyclopedias and more in their hands and the use them for the most challenging and most mundane information.
More than any previous generation each Gen Zer will be making their own decisions (good and bad) and mapping their own actions (good and bad) with less cultural constraint than in the past.
All of the things you mention about using digital describe me and I am definitely not from Gen Z!
But you’re young at heart and mind.
Acting your age is overrated. lol
One of the biggest blunders marketers can make is to lump one group of shoppers into one stereotype. The technologies available today can help provide guidance that shows trends without excluding shoppers who don’t fit into nice demographics. So, whether we’re analyzing Gen Z, Millennials or aging Boomers, you’ll find all of us enjoy value, convenience, brand passion and a good social cause.
Time moves forward. Thanks to the previous generation’s lessons, upbringings, and good foundation, every upcoming generation should be a bit more disruptive than the generations before. Retail is no different. It is always innovating and adjusting, and welcoming more shoppers to their brands. Adapting retail offerings to include new customers is not an obstacle; it is the business itself.
I love it! “…every upcoming generation should be a bit more disruptive than the generations before.” Isn’t that what we hope for?
Every generation has been disruptive compared to the previous one. The difference is the speed of the changes being adopted by Gen Z. Experience, behavior and technology define Gen Z. All are changing at a faster pace than the world ever experienced.
I have four Gen Z grandchildren and while each has a quite different personality and varying talents, the description in the narrative fit them perfectly. “climate change, fiscally cautious, valuing luxury/quality over quantity, and better skilled for an automated world.”
I have often written “why would I ever go to a store?” They don’t say that, they just don’t do it. They shop more like my Chinese students. My youngest just sent me his Christmas list. It was not like my letter to Santa, nor that of my kids either. It was a list of where I could find Amazon and Walmart addresses online where his desires are waiting for me to click “buy.”
The shift in nature, values, and behavior between generations is more like a curve (imagine a wavelength curve) rather than an abrupt change. Retailers can rarely survive on one generation and have always tried to adapt to the needs of multiple customer types.
Gen Z is proving to be significantly different than Baby Boomers, but only modestly different from the Millennial generation. Of course, we have also seen people in their 40s. 50s, and 60s become quite comfortable with digital technologies in spite of growing up with little digital technology.
Retailers will have to continue to do what successful retailers have always done: listen to their customers and adapt.
Gen Z’s abundant purchasing power makes it influential and irresistible to retailers.
Most retail companies will need to heavily invest in tech to reach these young consumers. This cohort’s digital comfort means tech must permeate retailers’ internal and supply chain processes to reach and delight these young consumers.
Notably, in June, Amazon announced investments in anti-counterfeiting, climate pledge initiatives and autonomous vehicles. Now it’s clear these moves will help Amazon captivate Gen Zs, who value luxury, sustainability and speed. These values overlap with Millennials’ values, making Amazon’s investments a smart, long-term way to build loyalty.
Also, Walmart has been giving TikTok and diverse suppliers the googly eyes, as these partnerships will help to connect with Gen Zs.
Gen Z consumers may be young but they’re shaping global retail strategy.
We have seen retailers and brands struggle to keep up with the first digitally native generation, the Millennials. Gen Z has some similarities to that generation. We have learned from the “Millennials are disrupting everything” narratives that there are no brushstroke strategies that companies could do to ensure that the Millennials’ or Gen Z’s needs are attended to.
As a father of two young members of the Gen Z segment, it’s clear to me that while they are digitally connected, they are far more conscious of the ethical, social, environmental, and sustainability impacts of buying a product or service. What has quickly become known as conscious consumerism, we will see a maturing consumer force in Gen Z, leading the charge as they expect companies and brands to drive a relationship of trust and transparency.
However, just like any generation, it is an exercise in futility to hire a few specialists to attend to the needs of Gen Z. It has to be a strategy that resonates throughout a corporate culture.
I just finished re-setting an investment portfolio to address the Gen Z mindset. It’s a lot different than my other investments, but reminds me of how much difference there is between me, my three Millennial kids, and my grandkids. I used a lot of research, including the Bank of America report. I’m excited by how much change it’s adding to my investment rationale!
I don’t think it will be Generation Z per se so much as the behaviors that they display that will be adopted by the rest of us. This movement of behaviors between generations has been shown time and time again to be relevant. As such the “mindset” of Gen Z must be considered when making decisions.
When we talk about generational differences, you must remember two things:
This generation will have some basic differences, but retailers need to be flexible enough to deal with different individual segments of each generation. Don’t try to be everything to everybody.
Yes
Sure. Blame the young people again. There’s a whole lot of them, so they have huge collective influence and market power, but not so much experience and perspective compared with the generations which preceded them.
(I’m saving the statement above, so I can re-use it in 10 years in this forum.)
With that cranky sentiment out of the way, let me say of course we should expect things to change with the next cohort. Zeds are digitally native, more globally connected, more worried about global justice and the health of the planet they are inheriting.
Marketers and retailers (and policy makers) should expect their influence to continue to expand. Some of us more seasoned consumers are learning stuff from Gen Z too. Maybe we shouldn’t call this “disruption”? Just sayin’.
It’s an oversimplification to treat any generation as too similar to the previous one, or the next one. Each generation has its own distinct traits, but it’s also important to realize that there will be variations within a generation, and Gen Z is no different. In fact, which may be the one thing it has in common with its predecessor, millennials.
Millennials were unjustifiably lumped together as a single cohort when there was always variation. When millennials were in the “hot seat” we wanted to compare them to Gen Xers and look for the differences. As each of those generations aged, the differences started to fade away. For example, most of my fellow Gen Xers I know have very similar attitudes towards social justice issues and digital savviness as most millennials I know.
Retailers need to not only be aware of how to treat each generation differently, including sub-cohorts within each generation but also how those generations evolve over time. Otherwise, retailers are just giving up customers they don’t need to give up!