As a first(?) in blogs focusing on Generation Z, After the Millennials counts its 9th year in 2020. During this time almost a decade of research covering this generation has been collected thanks to great collaboration with other consultants and futurists, and valuable clients challenging us to look for trends in new and interesting places. In this blog post I will report some highlights from this era and suggest what this means for businesses who want to better communicate with Gen Zers as they move into their adult life phase.
Frugal and brand wary
This blog was partly borne out of the concern for worrying trends in the economy and how this might have long term impact on the next generation. The national deficit went from a historic negative of -2.5% in 2001 to over 3% in 2003, largely caused by the Iraq war after 9/11. The financial crisis and a need to stimulate the economy brought the deficit to a new high followed by a steep decline which lasted until 2016. Since 2016 the deficit has increased steeply again, which is unusual in a non-recession period. While the deficit has expanded for some time, the national debt in dollar value has continued to grow as well. The debt percent of GDP is now near record-high levels not seen other than in the period around World War II. Also income inequality has increased during this period, which can be particularly difficult for young adults facing student debts and a steep housing market.
These experiences have etched into the Generation Z psyche. Probably for life. As consumers, Generation Z are more frugal. In spite of their young age, Gen Z has already built a FICO score higher both Millennials and Generation X. They also tend to view being debt free as being financially successful, expressing an overall greater risk aversion than their parents’ generation. While peer pressure has moved from shopping malls and traditional teen hangouts to social media, social signaling are less often expressed by wearing brand logos and engaging in lavish consumption. Instead Gen Z takes pride in how much money they can save and will proudly flaunt good deals found in secondhand stores and vintage markets. And while environmentally aware youth customers are driving fast fashion retailers like Forever 21 to the point of bankruptcy, reseller apps like Depop are not only pleasing the unique-seeking Gen Z market of social shoppers, but does also speak to their entrepreneurialism as well. Reuse is serious business for this generation and trading esthetically pleasing clothing online allows them to make that extra buck as well. Ironically, label-wariness and thrifting has produced its own brand. Gen Z favorite retailer Brandy Melville flagrantly rides the secondhand trend by selling “thrift looking” clothes – but to luxury retail prices.
Navigating a disordered social media driven world
Of course, paying full retail price hasn’t been necessary since digital connectivity made near perfect price information the norm. The browser extension Honey and coupon apps are just a few ways Gen Zers save on their online loot. 10 years ago Gen Z kids felt lucky if they could sneak a few treasured moments on their parents’ iPhones to play Cupcake Maker. Now they are affecting real time pricing decisions with their fingers.
But while they rely on personalized offerings made possible by predictive analytics and recommender systems, don’t think Gen Z is unaware of the hidden bargain in the form of privacy loss. Growing up digital natives, they are fully aware their personal data is being collected by third parties that use it to learn intricate details of who they are. But while Gen Zers are more likely to use ad blockers and search encryption technologies, they have accepted the tradeoff entailed in giving big businesses their info. What they are less willing to share is their private selves where there is little else to gain than fame or infamy.
When most Gen Zers were still very young we took a comprehensive look into the tendency of parents to overshare personal pictures and information about their children. In 2012 we speculated that Gen Z, in contrast to their Millennial brothers and sisters would develop not less, but a heightened sense of privacy awareness. Indeed, young social media users today use social media to capture a moment, not archive their lives. We noticed this trend in 2013 with Snapchat which was designed to capture the moment without leaving digital footprints. We later observed In Rinstagram and Finstagram, which allowed users to maintain different profiles for different audiences. Social media purging is another way to avoid lingering breadcrumbs.
While privacy is important to Gen Z, so is authenticity. YouTube became to the go-to platform to advocate for people and issues less seen in mainstream media. LGBTQ issues became personalized with uber-famous You Tube vloggers like Tyler Oakley, Shane Dawson, Joey Graceffa and Jeffrey Star. But while You Tube has established itself as a cornerstone of entertainment with the younger cohorts, competing only with Netflix, short form videos on TikTok is quickly soaking up the 5-second attention-generation. In terms of content TikTok users strive neither for privacy filtering nor earnest confessions, at least not in the most obvious ways. For teens today social media are becoming the platforms where they can share non-sensical memes and soundbites, not reveal their inner thoughts and feelings. But while depersonalized humorous memes are less sensitive to the problem of oversharing, TikTok might yet be the biggest privacy violator of all the social networks. Last year the Chinese company agreed to settle 5.7 million dollars with the US Federal Trade Commission for failing to secure parental consent for minors according to Children’s Privacy Law. Tik Tok, formerly known as Musica.ly, is also under investigation in the EU for breach of the GDPR.
Anxiety, depression and the burden of salvaging a dying earth
Anybody who hasn’t lived under a stone has read the news that young people today are depressed and anxious. Explanatory variables have shifted from growing social pressure, ubiquitous hand-held technologies, and school shootings. The cause is multivariate, but it is safe to assume that kids today increasingly worry about issues outside of their own locus of control.
This January The Bulletin of the Atomic Scientists adjusted the clock to reflect human-caused threats such as nuclear weapons and accelerated global warming. The 70-year-old symbolic clock was moved from 2 minutes to 100 seconds closer to midnight, indicating that “a true emergency — an absolutely unacceptable state of world affairs that has eliminated any margin for error or further delay.”
Generation Z is coming of age at a time in which civilization seems to be entering its twilight. Already in 2010 Millennials and Generation Zers made our government responsible for securing their legal rights to a safe climate by forming the lawfirm Our Childrens Trust. Ten years later these 21 children have fought a number of lawsuits in a persistent fight to hold the government accountable. Swedish climate activist Greta Thunberg has achieved iconoclastic status for leading the global movement, and record number of youngsters are making their voices heard around the world. It is a major issue that politically divides younger from older generations, especially in the Republican party. Parents and grandparents may scratch their heads why their children, otherwise much more obsessed with school achievements than they were themselves, skip school to strike for the climate. The truth is that Generation Z and Generation Alpha recognize that they will be personally affected by decades of planetary mismanagement, and as a consequence, eco-anxiety is an increasingly recognized form of mental distress.
The shift from general optimism among Millennial youth to realism and even cynicism among Generation Z youth, cannot be seen in isolation from these existential threats. Every other issue, ranging from economic activity, political regimes, implementation of new technology, and lifestyle habits and culture are all areas that will be seen through the lens of a biosphere in peril.
How should businesses adapt?
Compared to the highly structured and anticipated adolescence of Millennials, Generation Z’s journey towards adulthood has meandered to early adulthood through political, economic and environmental upheaval. Despite their helicopter parents’ attempt to protect them from the harsh reality outside, highly attuned, but adult emergency struck cohort type emerging. The 40-year old trend of increasing focus on self-actualization and individualism is now giving way to a sense of imminent disaster which make Gen Z engage in objective causes and actions. Uniting this generation together as a hardworking, well-informed and entrepreneurial yet risk averse and sometimes quite miserable cohort. Products and marketing messages that appeal to hedonism and shallow, solipsistic consumerism will fall flat. Generation Z do not only expect transparency and CSR policies to be implemented across whole supply chains, corporations now have to play an active role in mitigating existing problems as well. It’s not enough to become carbon neutral, you have to become carbon negative. It’s not enough to Not Be Evil, you have to be Actively Good, where “good” is defined as any action that counteract decades of destruction. Salesforce CEO Marc Benioff is aligned with this mindset when uniting 300 businesses in the effort of planting 1 million trees, but it still might not be enough. Companies that find themselves pressured by shareholders to make future sacrifices for short term profit must remember that the negative PR such strategies entail might not be worth it. Virtual pixie dust and viral engagement from a critical and elusive cohort could be far more prolific than expensive marketing campaigns – if the strategy is more than cosmetic. Viral approval is the gift that keeps on giving and far more sustainable than traditional marketing because of its organic origin and authenticity.
After the Millennials has a decade of experience in tapping into this organic growth. Applying insights derived from foresight, data analytics, content analysis and domain knowledge, companies across a number of industries have developed symbiotic relationships with Generation Z and improved their communication and outreach to this cohort. Please don’t hesitate to reach out!