Marketing Implications of Generation Z

Marketing Implications of Generation Z

🔥 Generation Z is an umbrella term used for the people born from 1995 to 2010. They are considered the first digital natives, because they have been exposed all their life to the era of the internet, social networks, technology, mobile phones, tablets, etc..
They are a hypercognitive generation that is very comfortable with sourcing and collecting information and making informed decisions. These young people can have a significant influence on people of different ages and income and they can be drivers of the way people consume and relate to brands.

A Mckinsey study reveals four core behaviors of Generation Z:
- Value for individual expression and say no to labels.
- Mobilize themselves for multiple causes.
- Belief in using dialogue to solve conflicts and improve the world.
- Make decisions in a highly logical and practical way.

Such behaviors influence how the Gen Zers view brands and their relationship with them. What can companies learn from this?

CONSUMPTION REDEFINED : As we know that a realistic and pragmatic consumer will gauge all the information before making a purchase, Gen Zers put an extra layer to it, they will also analyze the very act of consuming. Consumption for them has a new definition; it means having access to resources but not necessarily owning them. Thus, for Gen Zers access is the new form of consumption, the unlimited access to goods such as video streaming, car rides, bike rides, subscriptions, video games, etc. creates value. To quote the Mckinsey report, "Product become Service and Service connects Consumers." As this collaborative consumption becomes increasingly prominent, people are looking at generating additional income in a "gig economy." For example, a car manufacturer can rent out a car directly to the consumers, thus by doing that, it is not selling 1000 cars but selling one car 1000 times. Another example could be of sporting companies, who have shifted from just selling the sporting gear to build a community to help people become better athletes by giving them access to apps, technology, coaching and communities of like-minded people. The implication for traditional companies here is to create platforms of various products, services, and experiences that will help connect customers more to the brands. Companies should think about value-creation models, new distribution channels, and direct relationships with the consumers.
SINGULARITY: Gen Zers have a strong sense of individual identity and expression. The idea to "fit-in" is long gone. Thus, following the footsteps of Gen Zers, people from other ages are also looking at something that is more personalized and are ready to pay a premium for the same. Also, consumers are looking at brands that embrace causes which these consumers identify with. Gen Zers also support brands that don't classify items as male or female. For many brands, this is uncharted territory. In today's time, as the online and offline world converges, consumers want to consume products at any place and any time; thus, omnichannel marketing and sales must be used. The more time consumers spend online, the more the boundary between online and offline will reduce. Companies can now use advanced analytics to improve insights from consumer data, which the companies had buried for a long time in data repositories. Companies must have data strategies that would help them develop business insights by collecting and interpreting information.
ETHICS: The consumers expect brands to "Take a Stand". Not necessarily on every political debate going on, but on specific topics that do make sense for the brands and its consumers. A companies actions must match its ideals, and those ideals must match with the stakeholders it involves. Gen Zers know about the brands and the realities associated with them; if they don't, they know the sources from which they could fetch that information. A large proportion of Gen Zers buy brands only from the companies they feel are ethical. They also remember every controversy or scandal the company has been involved. Gen Zers also learn about the origins of the products - where they are made, how it is made, who makes it, what it is made from, etc. Many consumers will reject products if they find that the company is involved in some scandal. Word of mouth plays a big role; it is a sign of trust. Although, Gen Zers are very strict while choosing a brand; they are also considerate if a brand makes a mistake and is willing to take responsibility and change it. For consumers, marketing and ethics must go hand in hand. Companies must not only identify the topics they wish to support, but also make sure that the entire supply chain is on board.

Technology has given the young population an unprecedented degree of connectivity among themselves and the entire world. For companies and marketing people, this shift is challenging but can be attractive. Companies must remain open to change.

⇒ What are your thoughts about marketing to these new trend setters ?
Sources:
A Generation without Borders (2019), OC&C Strategy Consultants
Francis, T., Hoefel, F., 'True Gen': Generation Z and its implications for companies (2018), McKinsey Insights, McKinsey & Company