Generation Z is reshaping the future of businesses and changing the world of tomorrow
A young, growing generation, the so-called Generation Z, the first generation of real Digital Natives, is becoming more and more important for the economy and social interaction. For example, a few years ago companies focused their advertising entirely on television, image campaigns and advertising on websites, now YouTube, Instagram, Snapchat and TikTok are the most common advertising media. And advertising is just one example of the great change that Generation Z, born between 1997 and 2012 is causing. But why is their influence so big?
Generation Z grew up with the internet and smartphones, they don't know a life without them.
Friendships and social life are very important to them. For people of this generation, television hardly plays a role anymore, instead, streaming providers are on the rise. The digital natives grew up with smartphones in hand and thanks to media such as YouTube, anyone can now quickly cook, craft, play the guitar or learn other things. If this generation has questions about certain events or terms, they prefer to use Wikipedia or Google instead of encyclopedias. As a result, this generation will probably find its way around the everyday life of the future better than previous ones and has developed into a hypercognitive generation that is very good at collecting and referring sources of information and combining virtual and offline experiences. Based on these influences, Generation Z has new expectations of their environment. Therefore, it will change the world of marketing and consumer behaviour, but it will also force all industries to transform.
The fact that people behaviour will change can already be seen today from three key features:
- In the future, owning goods will be less important than having access to them. A current example is the rapidly growing business model of sharing goods, such as cars or bicycles.
- Furthermore, the differentiation through individuality as an expression of personality and ethical behaviour will reshape the future development of the consumer market.
- Along with technological progress, a lot of opportunities arise for companies in the process of transformation, but along with the transformation, companies also face a lot of challenges.
To remain successful in the long term, companies must deliver added value to consumers and reshape a change in individuality, ethics and consumer behaviour.
The world should adapt to the requirements of Generation Z
Around 2 billion young people around the world are assigned to Generation Z. From 2020, their number makes up 35% of the employees and 40% of the advertising-relevant target groups (sources: ManpowerGroup and MNI Targeted Media). Companies that want to continue to be successful in the future should therefore quickly adapt to this generation and consider how they can reach and involve them.
What should industries do to get Generation Z excited?
First of all, businesses in all industries, need to be aware that this target group has better access to information than many others before. Before Generation Z customers decide on buying something, they will search for as much information as possible in advance through various channels to become fully experts on the provider's service, solution or product. The internet means that there are no limits to access the information. Furthermore, factors such as benefit, added value and sustainability play a much greater role than before when deciding on products.
As already mentioned, ownership used to be decisive, today it is more important to have access to products and services without having to own them yourself. Especially in times of Corona, security is more important than ever, especially when it comes to existence and health. Nowadays customers expect holistic product and service offerings to match their living environment.
Stay ahead of fast-evolving trends
To provide a seamless customer experience, anticipate customer needs and bring solutions to market before competitors, should be the strategy that all companies must have to reach. This reduces or even eliminates the likelihood that Generation Z will find faults and look for competitors that fully meet their needs. To better predict the next set of needs that may arise, businesses need contextual data that allows more personalized functions.
53% of consumers look forward to Artificial Intelligence (AI) making interactions a better experience, therefore companies need to take advantage of technology to gain customer loyalty and satisfaction. By tracking data analysis and customer issues, companies should build technology-compatible solutions that satisfy customers and, in turn, produce added value for the company.
Some industries are already leading the way
Automobile manufacturers and sporting goods retailers have already managed to bind consumers to products or services that primarily have nothing to do with the end product through the ecosystems created in these living environments. For example, there are shared mobility models, such as cars, bicycles, or taxis. Apps are being developed for athletes, which the running community can use, for example, to buy training plans, nutrition or sports shoes. In these ecosystems, the products of cars and sportswear are only marketed indirectly, however, a strong relationship with the brand is being built.
The younger generation is usually the first to get excited about and try out new technologies. This also applies to Artificial Intelligence or Chatbots. Younger customers, in particular, are open to communicating with a machine, as long as their problem is solved quickly. That is why companies should integrate such innovative technologies into their customer service. And chatbots in particular offer advantages for both sides, this makes it easier to meet customer expectations and at the same time, companies can use chatbots to reduce waiting times on their hotlines and thus improve their customer service.
Ethics and brand awareness
The younger generation increasingly expects companies, including to take a stance on social issues. The actions of a company must correspond to the ideals of the Z Generation and these ideals must permeate the entire stakeholder system. Generation Z consumers are usually well informed about brands and the realities behind them. If not, they know how to quickly access information and develop an opinion.
The influence of Generation Z, the first generation of true Digital Natives, is now growing. For businesses, this change brings both challenges and attractive opportunities. Time will tell how the world will change and how prepared companies are for that change. To take advantage of such an opportunity, the first step is to be open to change.