As Gen Z, the generation born between 1997 and 2007, enters the workforce and begins to gain spending power, data from Ernst & Young LLP aims to arm companies with a better understanding of this new generation as a consumer.
According to findings in the Gen Z Segmentation Study, “Gen Z is a walking contradiction to society and past youth” in terms of expectations toward social media, core values and politics.
As evidenced by recent environmental and ethical rallies, today’s young generation is thinking about the future. And according to Ernst & Young, 72 percent are spending time on “activities that will help them in the future.” Further, while it is highly assumed that Gen Z represents a liberal political population, the company found that the majority view themselves as having moderate political views with a near-even split between those claiming liberal beliefs (28 percent) and those claiming conservative beliefs (25 percent).
“Gen Z is the most diverse generation yet and our research identified five unique Gen Z segments, each with their own attitudes and motivations,” said Marcie Merriman, Ernst & Young Americas’ cultural insights and customer strategy leader. “Retailers who go beyond understanding how they are different than Millennials — in order to understand the unique needs within the generations and how to appeal to them — will have the advantage.”
To understand the generation, Ernst & Young divided the population into five segments: stressed strivers, big plans and low energy, carefree constituents, authentic activists and secluded perfectionists.
“Companies need a Plan Z and to recognize the power of five — or that each Gen Z segment brings unique value,” Merriman said. “Understanding the drivers of each Gen Z segment is critical to providing them with the products, services and experiences they desire as consumers and the jobs they seek as employees.”
The company says given Gen Z’s diverse, independent and proactive characteristics it is more difficult to gain loyalty and that companies should “embrace transparency to address Gen Z’s trust concerns.” “Transparency will help companies gain Gen Z’s trust and provide them with a platform to remain authentic, connected and fulfilled, and therefore, more aligned with their values,” EY noted in its report.
“Remember that every interaction is an opportunity to build, or erode, trust — and Gen Z is a particularly hard audience to gain ground with,” Merriman said. “Sixty-seven percent of Gen Zers say that people cannot be trusted, which presents a challenge for retailers looking to ‘sell’ rather than connect.”
Further, with Gen Z’s demand for diversity and inclusiveness, Ernst & Young says companies will need to understand “what drives and motivates each individual person — and create and environment that embraces collaboration and inclusiveness beyond how it is understood today.”
And for companies, “being successful,” Ernst & Young notes, “will require a nimbleness, flexibility and adaptability to keep up and deliver on the needs of this generation of contradictions.”
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