Generation Z is the latest cohort to emerge on the scene. These digital natives, born between 1997 and 2004, may be young, but their activities already are affecting marketers, not only in terms of how they sell to consumers but also how they define their competitors.
This youthful generation has never known a world without pervasive technology or experienced life prior to 9/11, and it came of age during the financial crisis. In turn, the 46 million members of Gen Z tend to be savvy about social media, highly entrepreneurial, careful with their expenditures, and interested in social responsibility issues. When they make purchases, they generally have researched their options online first, they actively hunt for deals, and they prefer socially conscious brands.
As consumers, they acknowledge few restrictions on their purchasing behaviors, which aligns with another notable trend among Gen Z. A substantial proportion of them already have initiated entrepreneurial endeavors, mostly online, in an attempt to meet the demands that they and others like them have. For example, Stinky Feet Gurlz is an online retail site run by a 17-year-old who crochets hats for her customers to browse and buy. From her $1000–$2000 monthly profits, she siphons some to her college fund, but the majority goes to support her charity, She’s Worth It!, which runs parallel to the e-commerce site and is dedicated to combating child slavery and sex trafficking.
For traditional marketers, these developments represent a change to the game. Not only must they find ways to appeal to Gen Z consumers, but they must consider how they should compete with Gen Z entrepreneurs. For socially conscious brands, the consumer appeal tends to be strong. In addition, these young consumers appear less taken with the idea that product ownership grants status. Thus, rental, sharing, and streaming services face a notable opportunity. Gen Z shoppers prefer to rent a fashionable dress for an event, pin a picture of an ideal home to their Pintrest board, and stream a movie rather than buying any of these options through traditional routes and in conventional forms.
In selling to mainly their peers, Gen Z entrepreneurs embrace these same notions. The products and services they sell tend to be unique or personalized, and most of them involve some charitable or socially responsible component. Of course, not every teen is likely to raise $42,000 in funding for an e-commerce site to sell age-appropriate undergarments, rather than push-up bras, to young girls and thus take a stand for gender equality. But many of them are getting experience with the idea of starting their own business, and more of them are coming to enjoy the benefits of finding exactly what they want, offered by others like them. For the future then, the influence of Gen Z seems likely to expand.
Source:Dinah Wisenberg Brin, “Why Gen Z May Mean Trouble for Retailers,” CNBC, July 16, 2014, https://www.cnbc.com