Understanding Gen Z is crucial for brands and retailers

Generation Z is set to make up a huge proportion of the global consumers in just 10 years. As a result, it is crucial for brands and retailers to understand what makes them tick, if they are to survive shifting tastes among their client base.`

Generation Z or Gen Z is the demographic cohort after the Millennials. There is no precise date for when Generation Z begins, but demographers and researchers typically use the mid-1990s to mid-2000s as starting birth years. Obviously generational divides are relatively arbitrary divides, which need to be taken with a pinch of salt – a Millennial born in 1996 is more likely to share cultural standards with a Gen Z individual born in 1998 than with another Millennial born in 1981, for example – however, broadly at least, taking into account the changing attitudes of young people is essential for the future survival of public and private services.

As the oldest member of Gen Z turns 21 this year, global strategy consulting firm OC&C has conducted an in-depth survey of 15,500 respondents spanning four generations and nine countries to help brands and retailers understand this new and ever-changing generation. As previous generations of consumers inevitably deplete as they advance into old age, Gen Z already makes up 30% of the global population and almost 50% in parts of Africa.

So what are the differences between an average Gen Z member and a Millennial? At first glance, OC&C’s research demonstrates that the younger generation carries forward a number of common trends established by the Millennials, including socially conscious, experience-led consumption. For a generation which also told researchers they fetishised uniqueness, including 23% saying the ‘uniqueness’ of their opinions was very important, this is somewhat ironic. 

In terms of social attitudes, promoting animal welfare still ranks highly with Gen Z, as it does with previous generations. At the same time, ensuring family members have good opportunities remains a top two priority, albeit with 2% fewer of Gen Z respondents selecting it. Similarly, supporting human rights organisations is the third most important social issue for all generations, though Gen Z is 4% more concerned about the matter. This means the importance of ‘purpose’ in a company’s branding is going to retain its importance moving forward, and will even grow. 

However, in other areas the research also established that there are key trends particular to this demographic, which retailers in particular would do well to tap into. This ranges between everything from attitudes to spending to their outlook on the future. Particularly important for brands and retailers is that as a rule of thumb, Gen Z is generally subject to higher level of influence from celebrities and friends, even as it claims to want to stand out as individuals.

One example of how marketers have cashed in on this paradoxical world-view is the in-play sales system of ITV’s flagship reality TV show, Love Island. During the series, viewers downloaded the Love Island App where they could not only vote for what happened in the show, but shop for and purchase the outfits worn by contestants as they appear on the TV screen. This was made all the more enticing to impressionable fans with options for personalisation, meaning viewers can express their ‘individuality’ by purchasing mass-produced accessories featured on the show such as water bottles featuring their chosen name or message. 

As a whole then, companies looking to engage with Gen Z in the coming years will need to take two key points on board. As they compete for the best talent amid a shrinking labour pool, businesses will need to demonstrate a social conscience to obtain their next generation of workers. At the same time, retailers will need to weigh up new strategies on how best to engage with a new group of consumers digitally, as the influences of social media and viral marketing offer up major opportunities to engage with customers and drive sales growth.

Will Hayllar, Partner at OC&C, commented, “Gen Z is a complicated but vitally important set of consumers for brands and retailers to understand as they will make up a huge proportion of the global consumers in just over 10 years… Their social network is informing decisions and shaping exposure to brands, posing evolving issues for retailers and brands seeking to access Gen Zers. Businesses should take note of their increased consciousness both when supplying products and services but also their ethical standards to attract Gen Zers to their workforce.”