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.
The challenge of targeting Gen Z is their behaviour
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.
Empowerment as a means to overcome the say-do gap in social activism
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.
Changing “It’s complicated” to “In a relationship” with belonging
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.
35% of Gen Z said that using the internet contributed significantly to their daily stress levels
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.
Saving in a squeeze, splurging for joy
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.
How to win
- Develop a multichannel delivery approach; focus on new social media for marketing. The essential aspects of Gen Z's shopping behaviours are their appreciation for in-person contact and connectivity, necessitating brands to establish a strong presence across channels. On the contrary, in the realm of Gen Z-focused marketing, the focus should be on three venues – video-centric social media platforms, communication, and gaming apps.
- Embrace Gen Z's creative influence – creativity is fundamental to Gen Z's identity. Co-creation practices benefit consumers by empowering Gen Z to shape corporate strategies, express preferences, and establish themselves as creators. This approach future-proofs business strategies, ensuring prompt feedback and consumer-driven innovation.
- Engage through advertising, advertise through communicating. The emphasis on authentic brand engagement is central to Gen Z's identity. Therefore, engaging in meaningful and emotional conversations is much more important than just delivering content for marketing purposes. Consistently ensuring concise and well-segmented messaging across all channels is necessary when targeting Gen Z.
Learn more about opportunities and struggles with Gen Z in our report, Future of Consumption: Unlocking Gen Z Behaviour for Crafting Powerful Strategies.