Part #3 - Gen Z And How They'll Impact Business

This is the final part in a 3 part series-post on Z Generation and their impact on business.

Three forces are emerging from the Z Generation that will force businesses to think and operate differently and those forces are driven by technology and behavior.

Possession Replaced By Access

The Gen Z'er is a more pragmatic and realistic consumer and is inclined to access and evaluate a wide
range of information before purchasing.

For Z'ers, consumption means having access to products and services but not necessarily owning them. Car-riding services, video streaming, and the subscription model for almost any good or service is quickly becoming the norm.

For example, auto manufacturers are renting out vehicles directly to consumers, so instead of selling 100 cars they sell one car to 100 people. The sporting-goods business is transforming by providing access to equipment and coaching vs. just selling sport gear. Companies, to succeed, must  create products, services, and experiences that 'connect' consumers to their brand.

Gen Z - it's all about identity

Singularity: Consumption Expressed As Individual Identity

Gen Z'ers are all about identity. Consumption therefore becomes a means of self-expression vs. adhering to the norms of a group. More importantly, Z'ers are willing to pay more for personalized items. The days of the bespoke are upon us.

To cater to Z'ers, who are always and everywhere online, companies must develop a data strategy that guides what they offer in terms of product/service by collecting and interpreting customer  information - while, at the same time, protecting the privacy of that data.

Companies will have a two-track business model: one for scale and mass production and one for customization catered to specific consumers. Companies will have to become more agile and flexible to survive.

Consumption Steeped in Ethics

More and more, consumers expect brands to 'take a stand'. The goal being to take positions on topics or causes that make sense for the brand. In most cases, these should not be political in nature but  must match the brand's ideals.

Gen Z'ers are well educated about brands: the origins of what they are buying, where it is made, what it is made from, and how it is made. Therefore, marketing, in the digital age, will pose complex challenges as traditional channels of distribution become more fragmented and ever changing.

In Summary

Young generations have always influenced trends and behaviors in societies. For Gen Z'ers the search for truth is at the center of their behavior and consumption patterns and technology has given them unprecedented connectivity and access to information.   For companies, this brings both challenge and opportunity - but a business must be open to it, recognize it, and embrace it.


Jim Lavorato, Principal
Fund-House Ventures
www.fundhouse.com