The youngest generation of consumers is starting to emerge as a new force

To reach this younger generation, brands need to understand them. The important thing for brands to do is to be well-informed and accustomed to a fast pace of change, Gen Z is not going to make it easy.

Are Brands Ready for Gen Zers?

Defined as people born between 1996 and 2012, Gen Zers are already earning real money and spending it. Moreover, they are growing more prominent demographically: by 2025, Gen Zers will constitute the same share of Asia’s population (25 percent) as millennials (born between 1980 to 1995) will. 

Gen Zers also spend more time on social media than any other age cohort, and they are more careful about how they use it: McKinsey reported that 36 percent of Gen Zers say they “carefully curate” their online presence. Gen Zers are also more likely to follow their favorite brands and to use social media and video-based platforms when making fashion decisions. Perhaps because Gen Zers are still very young, some of their attitudes appear contradictory. For example, they like personalization, but only a few of them are willing to provide the kind of data needed to deliver it. They say they prefer ethical products, but only a minority are willing to pay more for them. These are, of course, very broad generalizations, and there are substantive differences within the cohort. 

Gen Zers Customer Segmentation.

According to McKinsey, there are at least three that are particularly important: 

• Brand-conscious followers, who represent about a quarter of Gen Zers surveyed, keep a close eye on trends and then buy (usually online) the brands that are trending. They like to mix and match to create a personal style and tend not to be loyal to particular brands. 
• Premium shopaholics are spontaneous. They love to shop and enjoy every part of the process of researching, comparing, touching, visiting, and clicking. They are brand loyal and trade up to pricier brands when they can afford to do so. 
• Ethical “confidence” visit physical stores more than the other segments do. They like brands that speak to their values and don’t care as much about trends or prestige. They prefer brands that they perceive as environmentally responsible and socially ethical. 

(Source: McKinsey & Company, Asia’s Generation Z Comes of Age)

Edwin Jonathans - Brand Power Plus