Generation-Z Corporate Implications

Posted by Marketing on 09 12, 2020

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Younger generations have long been the driving force behind creating and enforcing social trends. The newest batch of influencers is Generation-Z or Gen-Z, the group born between 1995 and 2010. These individuals are true digital natives, having grown up with the internet, social media, and mobile devices. This upbringing has resulted in a generation good at collecting digital information, understanding how to manage, and cross-referencing many sources to optimize the best ones. 

Gen-Z's Growing Voice 

The global world is only growing smaller. As the future progresses, socioeconomic status will matter less, while youths' ability to access their global settings will matter more. Gen-Z has become an essential voice in the worldwide market as they influence how individuals of various ages and income levels consume and relate to brands. 

Many Gen-Zers are individualists searching for one common goal — the truth. They believe in mobilizing themselves to advance their causes while using open dialogue to solve conflicts and improve the world. Gen-Z behaviors include making decisions and relating to their innate intuition pragmatically and analytically. 

True Gen 

Millennials, the previous generation, are often called the "me generation." This label is due in part to the fact that millennials tend to focus on the self. Millennials are more idealistic, less willing to accept other points of view, and more confrontational. 

On the other hand, Gen-Z is frequently called "True Gen." Gen-Z's broad view of the world influences their relationship with brands and their willingness to consume. When understanding Gen-Z, companies must be aware of some critical ideals that this generation holds close to them:

These Gen-Z preferences are influencing shifts in society and commerce. Companies now have to rethink how they market across all socioeconomic brackets to address issues like ethical work practices while practicing what they preach. It is also vital to this generation that businesses add value to the customer and rebalance their mass-production scale while focusing on personalization to the consumer. 

How Gen-Z Differs from their Predecessors 

The context of ongoing events and world situations shapes every generation. Baby boomers, who were born between 1940 and 1959, saw a way to express themselves through the consumption of materials to express their identity. This is partly due to their world-view of post-World War II while growing up and the consumerist ideals surrounding them. Gen-X (1960-1979), many of whom came of age during the 80s, consumed status, while millennials, born between 1980-1994, consumed experiences. 

Expressing Personal Truths 

Gen-Z sees their consumption patterns as a means to search for truth in both a personal and communal pursuit. This generation feels comfortable being authentically themselves at all times. Gen-Zers’ quest for authenticity fosters a genuine understanding of other kinds of people while becoming more tolerant. 

Gen-Zers report that as technology has grown, they can be increasingly more of themselves every day. This generation is interested in brands that use unisex labels as they believe that gender is a more fluid construct. In terms of behavior, Gen-Z individuals do not enjoy stereotyping themselves with one specific behavior or another. Instead, they enjoy experimenting with different identities to see what fits best over time. In this way, they are ever-changing "identity nomads." 

At least 76% of Gen-Z report that they are religious. However, this is also the generation that is the most open to themes and ideas that are not necessarily in line with their proclaimed religions. In one example, 20% of Gen-Zers do not consider themselves to be entirely heterosexual, in contrast to 10% from other generations. Another 60% of Gen-Zers believe that same-sex couples should be able to adopt children legally, which is another ten percentage points more than what previous generations do. 

Gen-Z consistently stays connected while always evaluating unprecedented amounts of new information and influences at rapid speeds. The best place for them to experiment is internally, so they are always seeking out a change within themselves. Gen-Z strongly believes in having authority over one's identity. In fact, 7 out of 10 Gen-Zers think it's essential to defend self-identity issues vigorously. Compared with previous generations, Gen-Z is much more interested in human rights matters related to race, ethnicity, LGBTQIA+ issues, and feminism. 

Despite their strong sense of personal identity, Gen-Z will leave personal matters aside to mobilize around causes they care about and rally around. Compared with millennials, Gen-Z is more likely to agree to join someone who thinks differently than they do if there is a shared cause between them. Also, Gen-Z will stop buying from brands and spread a negative word about brands they find offensive. This group is 81% likely to spread negativity about a brand they find overly macho and full of toxic masculinity, 79% likely to do so about a brand they find racist, and 76% likely to spread negativity about a brand they find to be homophobic. 

Finding Connection 

The world of Gen-Z is entirely inclusive. This audience of individuals does not distinguish in their social circle between the friends they met online and their friends in real life. Gen-Zers continuously move between social worlds and digital channels to promote causes they are interested in by strategically using the high level of mobilization technology. They value social media and online communities so much because these channels allow people of different backgrounds and socioeconomic status to mobilize shared interests and causes. 

Recently, 66% of Gen-Z individuals stated that they believe communities are built on shared interests and core beliefs rather than educational background or socioeconomic ties. That statistic is well above the number of millennials, Gen-X, and baby boomers who feel the same way. Gen-Zers believe that it's perfectly natural to belong to multiple groups, with 52% sharing this belief compared with only 45% in other generations who share this belief. In all, Gen-Zers have no problem being chameleons who easily move between social groups and enjoy flexibility. 

Practicing Dialogue 

Generation Z believes in practicing open dialogue to express their beliefs and learn from others. They also tend to accept differences of opinion in institutions they regularly participate in and with their own families. They can collaborate with them without entirely abandoning their principles. 

Gen Zers are also pragmatists. While many consider themselves to be religious, many also have beliefs that do not align with their religions' traditional practices. Still, they can engage with conventional institutions, extracting what they want out of it, rather than disregard it altogether. 

Members of Gen-Z want a change in society but believe that it must come from an open dialogue. While 57% of millennials, baby boomers, and Gen-Xers think that they would have to shatter the system entirely as we know it to change the world, only a smaller number (49%) of Gen-Zers feel this way. 

This younger generation is also more willing to be more patient with the failings of companies. As an example, only 39% of Gen-Zers expect companies to solve customer service complaints in one day entirely. For generations before, that number comes in higher at 52%. 

Gen-Z possesses a strong belief in open dialogue while still preserving their self-identity. They denounce stereotypes and apply a fair amount of pragmatism in their everyday lives.  

A Hyper-Realistic View of the World 

With much information available at their fingertips, Gen-Z is utilizing this knowledge access to become more pragmatic and analytic than many generations before them. About 65% of Gen-Zers said that they value knowing what is going on around them, and being in control is also critical for them. Due to their style of absorbing information, this generation reports they are more comfortable learning online than in other forms of traditional education. 

As they come of age, Gen-Zers are faced with a world in a time of global economic stress. In Brazil, for example, Gen-Zers are now in the most significant downturn in the country's history. Challenges like what we mentioned make Gen-Z less idealistic than ones who came before them, especially millennials. 

When looking at Gen-Z in the workforce, it can be noted that they are more interested in job stability, rather than higher salaries. At this point, Gen-Z in the workplace already shows more interest in regular employment than in part-time or freelance work, unlike their predecessor, the millennials. Forty-two percent of Gen-Zers from 17 to 23 years old are already steadily employed with a full- or part-time job or as freelancers. That's a large percentage for a group of young individuals. 

Gen-Z Consumption 

Gen-Z now has an influence on all generations with their attitude towards consumption. Commerce is rapidly changing due to their patterns. Three different energies are driving Gen-Z energy and behavior, as discussed below. 

Consumption Meaning Access 

This pragmatic generation expects a broad range of information made available for them to assess and evaluate before any purchasing decisions are made. Not only is Gen-Z extremely conscious of what they are purchasing, but the very act of consumption is something they analyze. They are now redefining the meaning of consumption. 

For this generation, and for increasingly older ones as well, consumption has now moved toward having access to products and services, but not necessarily owning them. Access and entry is now the ultimate form of consumption as all-access and unlimited services like subscriptions and streaming services create value for customers. Products have become services, with services connecting consumers. 

Collaborative consumption is also being used to generate additional income in the current "gig economy." Another interesting take on the gig economy involves consumers who temporarily work with their favorite brands to generate income. 

There are many ways that the current economy has changed the business plan for many companies. For example, some car companies are renting out one car to different customers 1,000 times. This creates a different buying experience and generates a different revenue stream for them that is more lucrative. Sporting goods businesses have shifted their role to help individuals become better athletes. They now provide access to equipment, technology, coaching, and a community of like-minded people interested in fitness. 

Many traditional brands and services should consider shifting their focus to creating platforms around their products, goods, and services to connect customers to their brands. Now is the time for companies defined by one product, service, or image to revamp their value-creation model to consumers. In doing so, they may leverage better, more direct relationships with their customers while finding and attracting new and exciting distribution channels. 

Consumption as Personal Identity 

A core value of Gen-Z is the ability to manifest one's own personal, individual identity. Therefore, consumption has now become a crucial part of self-expression. Younger generations do not want to buy clothes or other items to fit in; they want items specially tailored to their unique identities. In a trend led by Gen-Z and millennials, consumers of all ages are now intensely interested in personalized products and willing to pay a premium for products that highlight their individuality. 

According to 58% of A-class consumers and 43% of C-class consumers, the ability to pay a premium for personalized products is crucial. Consumers embrace social causes they identify with, as 70% of A-class consumers and 58% of C-class consumers are willing to pay a premium for products from brands that embrace causes dear to them. Gen-Z is interested in brands that do not identify as either male or female, with 48% of this generation stating that this is important. This number is up from 38% of consumers from other generations who say they prefer unisex brands. 

Although consumers say that they must have a personalized experience, those across multiple generations are still not comfortable sharing all of their information and data with companies yet for personalization. Only 10% to 15% say that they have no issues with sharing all of their data with companies online. If there is a counterpart from companies to the consumer, individuals willing to share their information will go up slightly at around 35%. 

With the on-and-offline worlds converging, consumers now expect their favorite goods and services to be available at all times and in any place. Omnichannel marketing and sales must directly reach new levels in this playing field. For many consumers, especially younger ones, the lines between being on-and-offline do not exist. Simultaneously, we are now in a "segmentation of one" phase, letting companies use the most advanced analytics to find unique insights to improve data and experiences. 

Suddenly, customer data that is long-hidden in repositories suddenly has strategic value to companies. As protecting data privacy becomes critical, top businesses should develop a plan to collect and interpret individual consumers' information while considering consumers' rights. 

For many decades, consumer-based companies and various retailers have gained profits through economies of scale. Many companies have a two-track system meant to optimize their best sales patterns: 

In this process, marketing and the supply chain require both flexibility and coordination. 

For instance, in the clothing industry, questions are being raised that could change the industry's face in years to come: How long will fashion collections continue to be marked by gender? Should companies market big-ticket items like jewelry and cars in an unbiased way? If not, how should the shift take place, and what would that look like? How will the two-track business system transform businesses internally to change the structure of companies? 

Consumption Tied in With Ethics 

Finally, it's increasingly vital to younger consumers and more individuals that brands "take a stand" in their ethics and beliefs. It is not essential to consumers that brands have a politically correct position on a range of current event topics. However, they look for brands to choose stances or causes that make sense for the brand and its consumers. Brands should have a clear message about their particular ethics. As Gen-Z craves transparency, they do not distinguish between a brand's ethics, the company owning it, and ideals permeating the entire shareholder system. 

Members of Gen-Z are well-versed in the realities behind brands. If they want to know something about a company, they understand how to look up for information quickly and draw their own conclusions. Gen-Zers will be quick to notice if a brand advertises diversity but does not actually feature diversity among employees. 

Ethical buying choices are also significant to Gen-Z, with 70% stating that they try to make purchases based on what they feel is socially right. Companies scandals stick with consumers: 80% state that they associate at least one major controversy with a significant brand. 

Those scandals impact buying choices later on, with another 80% of buyers making conscious choices to avoid purchasing products involved in any controversy. Another 65% of consumers want to know where their products came from — where it was made, what it was made from, and how it was made. 

All of this information is relevant for businesses, as 63% of consumers state that the vast majority of their trusted sources for learning about brands and services are their friends. 

There is some good news for companies in the midst of all of this. Consumers, particularly Gen-Z, are tolerant of brands when they make mistakes if the mistakes are corrected. This course can be more challenging for large corporations, as many Gen-Zers believe that big brands are overall less ethical than smaller, grassroots ones. 

Now more than ever, marketing and work ethics are merging. Companies must find topics that they support, make a clear stance, and ensure that everyone in their value chain is on board. Companies should carefully consider who the marketing agents and representatives are and make sure that they stand for the same cause. It is vital to know that consumers increasingly understand which marketing agents represent what brands and products. Thanks in part to a wealth of information readily available online.

Consumers also increasingly understand that companies can and do subsidize their social media influencers. For that reason, they tend to pay attention to closer connections, including Instagram personas with followers between 5,000 to 20,000 followers. As the digital age becomes ever more complex in its challenges, marketing channels will keep fragmenting and changing to fit the needs of the changing landscape. 

Gen Z's Influence 

Young people have always inhabited the forefront of the changing landscape of trends and behaviors in society. Gen-Z is now profoundly influencing the rest of the world. They are the first generation of digital natives who consistently search for truth at the heart of all their behaviors and consumption patterns. This trend is now radiating outward to everyone else. 

The flow and development of technology have given young people an unprecedented amount of connectivity. While this makes generational shifts ever more critical, it also speeds up technological changes. For many companies, these changes will bring many opportunities as well as challenges. It is vital to remember that the first step to attracting any opportunity is to be open to it. 

At Infinity Consulting Solutions, we are open to the future. That is why we embrace and celebrate multiple views and opinions in our workplace. Our mission is to promote a culture of belonging where each employee's unique attributes are valued. Reach out to us today to learn more about our solutions.

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