Across generations, young people have always been influential. Their ideals, desires, and experiences shape the world they’re interacting with. Before us is a new generation — Generation Z. As early as now, this generation is reshaping the way companies behave and the way we view consumption. How so?
In McKinsey’s article, ‘True Gen’: Generation Z and its implications for companies, they explored this matter in detail. Let’s boil it down.
What is Gen Z?
According to McKinsey, it is the context in which a generation emerged which shapes the way they behave:
The Gen Z are those who are born roughly around 1995-2010. This generation is the first one to have grown in the digital space. Since their childhood, they have been exposed to the internet and the quickly growing world of technology.
With this, the Gen Z are exposed to massive volumes of information and knowledge about the world. Because of this exposure, the search for truth is in the core of Gen Z’s behaviour.
With exposure to the world’s diversity, a Gen Z knows that they cannot define themselves or others in a single way. They have an extraordinary sensitivity when it comes to the differences in worldviews of other people, preferring dialogue over confrontations. A Gen Z lives pragmatically, seeking the truth behind all things.
What is the implication of Gen Z behaviour to companies?
With the truth-seeking Gen Zs now continuing to increase its sphere of influence, companies also need to adjust how they do business.
The truth-loving nature of Gen Zs has changed the way consumption is viewed in three key aspects:
1. From possession to access
With so much access to information, not only does the Gen Z examine products closely before they make the purchase, they analyze even the very act of consuming.
For the Gen Zs, consumption no longer equates to ownership. For them, consumption is all about having access to products and services.
With this, there is now a high value placed on companies providing unlimited access to goods and services. For instance, car-riding services, video streaming and subscriptions are some of the things which are booming these days.
The rise of services which connect consumers to brands such as online stores and food delivery services is another evidence that consumption is now becoming a matter of access.
2. Consumption as an expression of individual identity
The search for truth in a Gen Zs perspective is a way to manifest their identity. By knowing more of the world around them, they also get to know themselves fully.
In line with this, consumption is no longer a matter of fitting in — it is a matter of expressing oneself.
Here are some of the things that Gen Zs put a premium on when it comes to products and services they are willing to pay for:
- Personalized offerings
- A brand’s alignment with the causes that they support
- Inclusivity: a growing number of Gen Zs value brands that don’t classify items as male or female
3. Consumption anchored on ethics
A Gen Z seeks transparency, blurring the lines between a brand’s ethics and the company that owns it. With this, a company must match the ideals that their brand conveys.
For instance, if a brand advocates for diversity, then that diversity must also be seen in the composition of the company. Gen Zs desire to know everything about the product they purchase. They want to know where it is made, what it is made from and how it was made.
With this, companies must not only identify their position on topics relevant to their business. They should also make sure that their stances reflect on the way they govern themselves.