Just when companies are starting to understand Millennials, a new generation is emerging. Members of Generation Z, sometimes referred to as “Generation Edge,” were born in the mid-’90s to late 2000s. They differ significantly from the previous generation: they’re the first generation born into the digital world, and they’re the most diverse and multicultural of any generation in the U.S.
More research on Gen Z needs to be done, but companies are starting to get to know this generation. With a collective spending power of $44 billion, Gen Z is already making an impact on the business landscape.
There are three areas of the business that needs to pay attention to Gen Z now.
Gen Z grew up with the wide availability of the internet, and they’ve been raised on multiple screens (smartphone, laptop, desktop, iPod, tablet). When marketing to Gen Z customers, companies need to think digital and mobile first.
Marketing also needs to reflect the world in which Gen Z people are growing up. Writing forAdAge, Ruth Bernstein, co-founder and chief strategic officer of image-making agency Yard, says Gen Z customers “look for products and messaging that reflect a reality rather than a perfect life.” As the recent struggles of Abercrombie & Fitch demonstrate, Gen Z values products and marketing messaging that speak to their reality rather than the idealized world. Bernstein says projecting a “flawless, carefree, perfect world” doesn’t work for the Gen Z audience.
2. Human resources
The older Gen Zers are starting to enter the workforce, and companies need to be cognizant of the fact that this generation has different needs and expectations than Millennials. In an article for the New York Times, workplace consultant and author Alexandra Levit says this generation is diverse and is “often a mix of ethnicities.” This generation also tends to be independent, according to Levit, adding, “Gen Zers are growing up in a healthier economy and appear eager to be cut loose. They don’t wait for their parents to teach them things or tell them how to make decisions.”
Given that Gen Z grew up with social media, companies need to structure work in a way that considers the short attention span of these employees. “They like to digest information faster and faster, often through videos and things like Snapchat, so their attention spans will be even lower than [those of] Millennials,” Daria Taylor, co-founder of insight agency Talented Heads, tells the BBC. “There will be issues around their ability to concentrate, which employers will have to adapt to.”
3. Market research and customer intelligence
Studies show that Gen Z are a lot more entrepreneurial thanMillennials. “Because they grew up in a time when their family members may have been unemployed and money was tight, they’re resourceful and entrepreneurial,” notes theInternational Business Times. People born in this generation are more likely to start their own businesses and less likely to work for established companies. This helps explain the rise of peer-to-peer selling among teens today.
Because of their entrepreneurial mindset, Gen Z customers require a different type of engagement. “This market wants to be treated as a consumer who’s a partner, not as a target audience,” says Jeff Fromm, president of marketing consultancy FutureCast. “You’re not going to be marketing to them, you’re going to be co-creating with them.”
Customer intelligence professionals need to learn how to partner with Gen Z entrepreneurs. Consider ways of allowing Gen Z entrepreneurs to promote your brand (or even sell your products) in exchange for a commission or ad revenues. Also consider ways to co-creating products with Gen Z entrepreneurs in order to provide more value to your customers. For example, a fashion brand could co-design a line of jeans, or a technology company could work with a Gen Z programmer to improve a piece of software. If you let your brand become an “open source” that Gen Z can adapt, improve and evangelize, everybody wins.
In the next few years, many companies will dedicate time and resources to understanding the Gen Z customer. If your company has no concrete plans yet on how to engage this audience, the time to act is now. The companies that are able to change their approach to marketing, engagement and development of talent are set to win.