What makes Generation Z so unique and crucial to the businesses of today?
Gen-Z accounts for around 25% of the world's population, making them the largest and first digitally native generation. As stated by Trendhub, this demographic is globally-shaped in a hyper-connected age where audiences hold a broader view of culture and diversity, with access to trends from all over the world shaping their preferences. Tapping into this diverse and complex consumer is fundamental for future business growth. Here, we touch upon key observations surrounding the youth consumer habits of today, including the movements across sustainability and transparency, inclusivity and storytelling as well as analysing what luxury means to the youth consumers of today.
CLIMATE CHANGE AND TRANSPARENCY
Gen-Z is consistently notified by digital media and therefore informed by the urgency of climate change. The climate crisis has created a sense of anxiety among young people, with a study by Pew reporting that three-quarters of Gen-Z across the globe are frightened of the future. These anxieties are forcing brands to adapt to make this generation of consumer feel secure to shop with them. Brands are gradually taking action through design and material innovation to reassure consumers. For example, The North Face has redesigned fleece sweaters making their products easier to recycle. Meanwhile, L’Oréal is planning to eradicate single-use plastic all in the name of solving issues for their Gen-Z consumer.
While some may find that fear of climate change paralysing, there is a wave of young activists who are taking action, shifting the perspective towards more positive narratives and promoting tangible action. Tiktok influencers, like sustainability scientist Alaina Wood (@thegarbagequeen) and Caulin Donaldson (@trashcaulin) highlight new wildlife sanctuaries, the power of wind farms and they reframe trash-picking as scavenger hunts. As champions of sustainable consumer practices and authenticity, Generation Z influences other generations to do better to pave the way for a more optimistic future.
For too long, energy and consumer product giants have placed the burden of change on individuals. Consumers now are increasingly rejecting this paradigm, insisting that brands and institutions take responsibility for their waste and pollution. There is an emphasised appreciation for brands being upfront and realistic about their sustainability targets, spurred by a demand for transparency amidst a surge of greenwashing accusations. Not only this, as Gen-Z enters the workforce, employers are being forced to understand the implications of climate change on their businesses as they prioritise Gen-Z views as employees.
STORYTELLING AND INCLUSIVITY
Grounded in community and connectivity, Gen-Z are increasingly able to define their own path, away from the structures of the mainstream as they reject conformity. External validation becomes less of an incentive for individuals as changing norms encourage self-expression, shown by the rise of social platforms like BeReal.
As well as valuing authenticity and transparency, Gen-Z also places high importance on various social issues, including inclusivity and mental health. Brands that advocate for the causes that resonate with this generation have a higher chance of earning their trust and support. In fact, nearly 70% of Gen-Z state that they want brands to add value to society. However, it is not as simple as just making a one-time statement, brands must be sincere, transparent and consistent with their stance on certain matters and embed it into their brand values.
There is also a wave of growing confidence surrounding diverse bodies, lifestyles and identities challenging social norms as explored in our Macro book. Movements for body-neutrality triggers questions around the societal norms set for size, shape and ability. These values challenge brands to take more profound steps to cater to a wide range of bodies beyond tokenistic inclusion in fashion shows and ad campaigns.
Has Gen-Z forced a redefinition of luxury? It is clear that Gen-Z possesses a set of values and ideals that are radically different from previous generations. While the traditional definition of premium still resonates with the youth consumer, research shows they are not status-seekers. Instead, they are passionate about products that integrate with their values and connect with them in a more personal way, giving 'luxury' a whole new meaning.
Gen-Z consumption has also shifted towards prioritising services rather than directly owning products. Rental models continue to rise, encouraging temporary custodianship as consumers seek affordable newness without commitment. Luxury brands are recognising this growth, showcased by Tommy Hilfiger’s latest collaboration with emerging platform Rotaro.