Generation Z currently makes up 24 percent of the global population and is set to have significant spending power. This ‘digitally native’ population cohort, born between 1993 and 2007, will be an important customer base in the future.
The US will be a priority market in terms of the size of Gen Z and its spending potential. India and China also will represent key arenas as they account for 34 percent of the global Gen Z population and have a high number of graduates with good earning potential. In addition, among the smaller markets, Brazil and Indonesia will offer promising returns on Gen Z strategies. Brands are increasingly building their marketing strategies around issues that are important to this demographic, including the environment, health, and the greater common good.
“Companies that are tracking well with Gen Z are those that embrace authenticity and transparency and offer superior customer experiences. Gen Z prefers brands that enable user-generated content and employ social media influencers for marketing,” said Frost & Sullivan’s Visionary Innovation Group analyst.
“As digital natives, their connected lifestyles will drive a range of digital services and new business models. For instance, their comfort with sharing assets will drive the evolution of the sharing economy model.”
Frost & Sullivan’s recent analysis, ‘Generation Z as Future Customers, Forecast to 2027’, highlights Gen Z’s demographic makeup and psychographic customer profile, and identifies the brands that have responded successfully to their particular aspirations and needs.
“With the rise of Artificial Intelligence (AI) and automation, there will be a greater demand for a combination of ‘human’ skills and technical skills in the future workplace. In fact, AI and automation will create entirely new job categories as well as a shift in work environments,” noted the analyst.
“Meanwhile, Gen Z’s need for speed, precision, and convenience will popularize m-Commerce and mobile payment systems. Social media as a direct platform for buying goods and services will grow in importance, and companies will have to deliver a seamless, fast, and engaging mobile experience.”
Some of the strategies that businesses could employ to attract Gen Z buyers include:
– Improving technological performance, as the target audience is highly demanding and becomes impatient with technology that is unresponsive or error-prone
– Differentiating through quality, product availability, and value
– Having an effective environmental and social strategy to appeal to socially conscious buyers
– Gaining a positive digital reputation, as Gen Z uses peer reviews, product information, and retailer ratings to make smarter purchase decisions
– Providing relevant and personalized content that speaks the language of the users
– Designing strategies around Gen Z’s most preferred platforms, such as SnapChat, Secret, or Whisper, to communicate.