This article was written by Jana Rude, Senior Insights Manager – Consumers. The original article was published by Euromonitor International. You can find the article here
Generation Z, comprising 23% of the global population in 2023, are poised to wield significant consumer influence. However, their polarised behaviours towards social activism, technology and spending present challenges for businesses. This article suggests leveraging Gen Z’s key values – empowerment, self-expression, belonging, rationality, and retreat – to tackle dichotomous behaviours and build a future-proof customer base.
Gen Z’s share size in the total population positions this cohort as a focal consumer segment. Yet, targeting Gen Z is complicated due to their apparent behavioural polarisation. While openly championing social fairness and environmental issues, they hesitate to align their activism with purchasing decisions. Despite their digital nativity, many find technology overwhelming and intrusive, eroding trust. Moreover, their spending habits reflect a blend of rationality and impulsivity. Successfully navigating these behaviours demands meticulous attention and consideration of key values in brands’ strategies.
While endorsing social and environmental responsibility, Gen Z hesitate to pay a premium for these values. As per Euromonitor’s Voice of the Consumer: Sustainability Survey, fielded January to February 2023, despite Gen Z’s concern about climate change (55% of the cohort’s respondents), most Gen Z consumers were reluctant to pay extra for products with sustainable attributes such as “Sustainably produced or raised”, “100% organic” or “Environmentally conscious or eco-friendly”.
To bridge the value-action gap in social responsibility, it is crucial for Gen Z to feel acknowledged, understand that their choices and actions make a difference, and recognise their role in shaping their future. In 2024 – the biggest global election year in history – the first-time voters, Gen Z, are expected to surpass Baby Boomers, who have made up the majority of voters for decades. Thus, Gen Z’s influence is set to expand further – if they feel empowered enough to get out to vote.
Gen Z’s relationship with technology is marked by familiarity and concern. On the one hand, Gen Z-ers are digital natives, and their experiences have been framed by the presence and increasing penetration of digital services and infrastructure more than any other cohort. At the same time, there is an evident scepticism towards technology for its negative impact on Gen Z-ers’ wellbeing.
Source: Euromonitor’s Voice of the Consumer: Lifestyles Survey, fielded January to February 2023 (n=40,691)
At the same time, Gen Z is increasingly seeking connection within communities that share common interests and values due to increasing loneliness. As major social media platforms shift towards e-commerce and become massive and commercialised, Gen Z-ers actively explore alternative channels for meaningful social engagement. Hence, uncensored communication platforms, such as WhatsApp, WeChat, Discord, Mumble, Element or Telegram, gain popularity.
Gen Z’s spending behaviour presents another dichotomy. Their limited disposable income, exacerbated by inflation and global economic challenges, leads to cautious spending. According to Euromonitor’s Voice of the Consumer: Lifestyles Survey, fielded January to February 2023, Gen Z was the most financially distressed generation, with only 29% of the respondents comfortable with their current financial situation. Meanwhile, Gen Z-ers were also inclined to splurge on “living in the moment”. They want to be distracted by products and services that are novel and enjoyable.
Recognising the profound impact of creativity and the desire for retreat can influence Gen Z’s spending priorities. Gen Z’s participation in gaming proves that they prefer dynamic, engaging and creative content, which helps them disconnect. Features such as exploring a travel destination via a VR headset (46% of Gen Z vs 42% of general respondents), trying a new product in a virtual world (46% vs 41%) or simply shopping in a virtual aisle (41% vs 38%) not only draw Gen Z’s attention but also influence their purchasing decisions.
Learn more about opportunities and struggles with Gen Z in our report, Future of Consumption: Unlocking Gen Z Behaviour for Crafting Powerful Strategies.
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© 2024 Calleo Solutions (Pty) Ltd. All Rights Reserved.