Pay attention to the Gen Z

Jan 31, 2022

Who are the Gen Z

Generation Z (or Gen Z for short), is the demographic cohort succeeding Millennial’s(Gen Y). Researchers use mid-to-late 1990’s as starting birth years and the early 2010’s as ending birth years for this cohort. Current age of this cohort would be in the range 9 to 24 yrs.

How big is this cohort ?

In 2019, members of Generation Z accounted for 2.47 billion (32%) of the 7.7 billion inhabitants of Earth, surpassing the Millennial population of 2.43 billion and was the largest generation cohort1.

By 2025 it is estimated that 29% of the U.S population will be Gen Zers2. Another important data point to look at is nine of 10 members of Gen Z live in emerging market nations. 89% of Gen Z are in emerging markets where population skews are younger. India accounts for the largest share with 494 M (20% of overall Gen Z)3

In terms of spending power Gen Z’s combined income will reach a whopping $33 trillion by 2030, accounting for 27% of global income and surpassing millennial’s’ income starting in 20314. Just in US alone, Gen Z’s annual purchasing power is estimated as high as $323 billion, with researchers believing this can grow by more than 4X when accounting for Gen Z’s influence within their household.5

The future user growth as well as spending power of this cohort has large scale implications across all industries and something which leaders have to be cognizant and account in their plans.

Unique characteristics and needs of Gen Z

The Gen Z cohort has a lot of unique characteristics which is important for builders to factor in their products and solutions. There is lot more research to be done on sub-cohorts within Gen Z especially in emerging markets where there is large diversity in income levels, language, device usage and host of other factors.

Media consumption is unique - Gen Z consume significantly more online video content and has also accelerated after the COVID outbreak. Gen Y still consume content across sources across media types including online video, online TV and broadcast TV6

Short attention spans - The attention span of the average Gen Z consumer is eight seconds. This generation tends to toggle between different pages and apps. Research7 also points to how attention span of children are affected by technology and given that over half (55%) of Gen Z use their smartphones 5 or more hours a day and over a quarter (26%) use their phones 10 or more hours a day8 shorter attention spans is the norm.

Authenticity is a key factor - Storytelling must be authentic, informative, and engaging. Gen Z can see through staged material and thus feels it is false and ultimately not helping to build an affinity with the brand.9 Gen Z’s search for authenticity generates greater freedom of expression and greater openness to understanding different kinds of people.10

There were lot of micro behaviors which are unique to Gen Z and has implications for product builders like the concept of file folders and directories. I just picked the Top 3 abstracted list above which resonated with me and is not exhaustive

"Concept of file folders and directories, essential to previous generations’ understanding of computers, is gibberish to many modern students". Digital natives cannot imagine a world without Search”11

To summarize, it is extremely important for all of us to be aware of this generational cohort both in terms of its size as well as its incredible spending power. It is also imperative to understand their unique needs and aspirations while designing your products and services

What do you think ? Have you already started addressing this cohort in your plans ? Are there any behaviors which you have observed in Gen Z which was unique ?

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