Generation Z are today’s consumers and tomorrow’s business leaders. And while many businesses have focused their marketing and sales efforts on the Millennial market, the Gen Zers, as the new up-and-coming generation, must be recognised.
While many companies may view Gen Z as an audience too young to be significant, the truth is that they have the fastest-growing income, set to increase by 140% in the next five years to $17 trillion in 2025. And according to TransUnion research, South Africa’s Generation Z is helping to drive the consumer credit sector forward. The report found bank personal loans, home loans, store credits, and vehicle loans are the fastest growing products among credit active Gen Z consumers.
In a 2021 TPN survey, data on tenant aspirations by age shows those in the 18-29 bracket have the biggest desire of all age groups to buy a property within the next two to five years and are the least likely to want to keep renting for the foreseeable future. When asked about property preference, they are by far the most flexible age group.
“Generation Z is proving to be very different from the Millennials when it comes to their views on property. A recent Bank of America survey indicates that over 80% of Gen Zers want to own a home. To achieve this dream, they’ll give up spending on experiences like travel so that they can save for a deposit for a home loan,” says Carl Coetzee, CEO of BetterBond.
“This is a generation that has never known a world without Google,and is accustomed to spending considerable amounts of time online.“They are very comfortable with remote living – 40% of those aged 16-17 prefer hanging out with friends online to doing so in person, and will happily settle anywhere that has a good internet connection,” adds Coetzee.
Although many marketers may neglect the digitally native Gen Zers, the reality is that they have enormous purchasing power and influence.
“Gen Zs represent a group with a lot of buying power. As the first generation with no memory of a pre-internet world, they are far more connected through technology to goods and services than the generations before them,” says Aisha Pandor, CEO of SweepSouth.
Convenience over brand
While today all generations are prioritising convenience over brand, this is particularly true for Gen Zers.
“Businesses need to remember that this is a cohort that cannot remember a time when anything wasn’t on demand with a tap or swipe. As a result, they are experimenting with both established and emerging ways to simplify purchases. Self-service accounts are now used by more customers than not. More cutting-edge offerings powered by artificial intelligence and automation are gaining traction, too,” says Robin Fisher, senior area vice president, Salesforce, emerging markets.
According to Jonathan Hurvitz, Teljoy’s CEO, this means that brands and businesses must recognise that doing things as they have always been done doesn’t work for what is likely to be the majority of their customers.
Hurvitz explains: “It necessitates an in-depth evaluation of how you create value, and tailoring that value to meet the needs of Gen Zers at the exact point where they want it. Brands which choose to ignore the needs and preferences of this segment of the market do so at their peril, as these are groups who call for products, services and approaches that align with their values and financial goals at large.”
Businesses that recognise the relevance of the new buying market should emphasise values and social responsibility as a key approach to gaining the attention of the audience. What is the significance of this? According to Salesforce’s State of the Connected Customer report, while the majority of the population trusts corporations to be honest and behave in the best interests of others, Gen Z customers (36%) are slightly more likely than baby boomers (42 %) to have doubts about a company’s honesty.
”Businesses need to pay attention to this sizable group who will more and more define buying trends. As a generation that is focused on social and environmental impact, and brand identity, they will set the standard for the value that consumer products need to add to their lives. With their strong opinions, they will undoubtedly compel other generations to adapt to them, and are poised to become the most disruptive to economies, markets and social systems,” says Pandor.
Says Pieter Twine, general manager at MySchool MyVillage MyPlanet, “We agree that Gen Zers will play a significant role going forward, as they’ve been raised in a decade of social rights movements, and if not already highly engaged in consumer activism, are keenly aware of sustainability and positive environmental practices. With their mindsets attuned to the work many of our beneficiaries carry out, we look forward to this generation helping the charities that MySchool MyVillage MyPlanet supports nationwide.”
Despite their youth, Gen Zers are today’s new customers and wield economic power. Businesses that want to compete and grow must consider this new digitally savvy generation when developing marketing strategies. Importantly, businesses must recognise that this generation will be closely watching brands to see how they respond to societal challenges. If businesses can successfully communicate with this new market, they will have a better chance of succeeding.