Building a business for Generation Z

With most of Generation Z now in their late teens and early twenties, a new wave of consumers, employees and proprietors is emerging. According to a survey from RBC, challenging economic conditions have strengthened the desire for entrepreneurship in Canada, especially among younger people. Known as a tech-savvy generation, Gen Zers are leading the way in innovation and changing the way businesses operate. Who are they? And what influences or concerns them? As their purchasing power and employability increases every year, it’s important to learn how to build a business that’s attractive to a Generation Z audience.

Who is Generation Z?

It can vary from different sources, but in general, Generation Z refers to people born between 1997 and 2012 and make up roughly 30% of today’s working population. Known for their digital acuteness, they’re the most racially and ethnically diverse generation in Canada’s history. Having faced a recession in their early years and most recently a pandemic, a profound impact was left on their values and beliefs. Although there may be more life paths open to Gen Zers compared to previous generations, they unfortunately face increased financial instability. As uncertain as their future may seem, they represent the second-largest cohort of our working population and need to be considered.

Key Distinctions Between Gen Z & Millennials

While business owners have spent the last decade getting acclimated to Millennial traits, they’re now required to do the same for Generation Z. Although both generations bear many similarities, Gen Zers took what Millennials started and intensified it.

Gen Zers Value Diversity & Equality

Gen Zers are the most accepting of diversity and equality and are challenging definitions about race, gender and sexual orientation in ways that Millennials have not. In a Monster survey, 83% of Gen Z candidates said that a company’s commitment to diversity and inclusion is of utmost importance when choosing an employer. For example, having more culturally diverse workforces, supporting females through the ranks of hierarchy, and having open conversations about sexual orientations and systemic racism.

Gen Zers Believe Speaking Up is Important

Gen Zers exhibit an inherited desire to have a positive impact on the world. Millennials want to make a difference too, but Gen Zers are more inclined to be vocal about it. According to a recent study, 59% of Gen Zers think they should speak out on social issues, and 51% think brands should do the same. Whether that’s by calling out injustices or wrongdoings in public or on social media, they believe that issues need to be acted on and not just talked about.

Gen Zers are Technology Driven

Unlike most Millennials, Gen Zers grew up during a time where computers and the internet were widely prevalent. Having only known smartphones, they’ve always been able to meaningfully engage with people from different cultural backgrounds and over a much wider geographic area. That being said – nothing comes without a cost. Gen Zers has been shown to be more prone to depression, stress or anxiety, raising questions about whether technology and social media could be potential causes.

Gen Zer’s Place in the Working World

Generation Z grew up during a time where information and distractions were easy to come by. This has made them experts at multitasking and learning new things by themselves through non-traditional routes, such as YouTube or online courses. Their attention span has been significantly impacted and is comparatively lower than Millennials. As a result, they’re less inclined to pursue 9 to 5 jobs and are more likely to work independently or to hold multiple jobs. They enjoy flexibility, autonomy and are attracted to entrepreneurship.

4 Ways to Attract Gen Zers to Your Business

At this point, you might be wondering how all these traits have influenced Gen Zers approach to brands, experiences, and retail.

Be Sustainable

Gen Zers care deeply about the impact of their shopping habits and are advocates of sustainability. These traits impact their purchasing decisions and who they want to work for.

• Commonly known as recommerce, Gen Zers loves second-hand goods. According to Ebay’s Recommerce report, 80% of buyers in the second-hand marketplace are Gen Zers. It is also suggested that the resale market will outpace traditional retail in the next 10 years. If it makes sense for your business, bolster your sustainability credentials by taking part in this circular economy.
• Millennials and Gen Zers are especially attracted to green packaging with 83% of those age 44 and under willing to pay more for it. Are you being sustainable at every step of your supply chain and production cycle? Are your products sourced locally and are your suppliers aligned with your sustainability practices? Many eco-friendly packaging options are available such as recycled paper, cardboard, plant-based, biodegradable, etc.
• Embrace digital transformation. Remove all paper from your business by changing to online billing, email receipts and replacing your document storage with cloud storage. Make sustainability part of your business’s DNA.

Be Active Online

Gen Zers spend most of their free time online, with most of that time spent on social media.

• They’re the driving force behind emerging social commerce. They use social media to shop their favorite products and to connect with their favorite brands. Platforms such as TikTok, Instagram, Facebook, YouTube or Pinterest can be used to entice them with personalized offers and offer a frictionless buying experience.
• They love great content, especially short video content. With an attention span of roughly 8 seconds, keep your videos short and sweet. Research shows that 64 to 85% of people are more likely to buy your product or services after watching a video. Don’t know where to start? Follow trends on social media and simply replicate what others have done successfully.
• In today’s world, everyone has a smartphone. This is no different for Gen Zers, who spend upwards to 5 hours a day on their devices. Ensure your website is mobile-optimized, favoring an ideal and engaging experience that’s easy to navigate and browse.

Be Authentic

Gen Zers have a way of knowing if a brand is being authentic or not. Don’t be afraid to show your true colors and to build a brand that you can be proud of.

• Align your values with theirs via your brand image, messaging and actions. As a business, you need to empower them if you want them to spend, advocate or to work for your business.
• Offer your platform as a way for individuals or employees from marginalized groups to share their stories. Gen Zers are much more likely to buy from a brand who speaks up on social injustices.
• Influencers play a massive role in today’s online economy and could be a worthy spend in your marketing budget. Based on a study from LTK, “92% of all Gen Z adults credit social media influencer recommendations as the most important driver of purchase decisions online, above brands, retailers, celebrities and store associates.” Look for influencers who are trustworthy, popular and that truly believe in your brand.

Be an Omnichannel Business

At this point, it’s quite apparent that Gen Zers love to interact and to shop online. Does that warrant getting rid of your physical location? Not quite. Many of them still want the option of being able to interact with your business in-store.

• Give you customers the ability to return or exchange any items or services that were purchased online in your physical location.
• Mirror your online shopping experience to your in-person experience. Your marketing, selling and customer service should all be the same. You want to create an integrated and cohesive customer experience, whether that’s online or in your store.
• Be unique and showcase who you are as a brand in your physical store. It should be a real-world reflection of your online image. it should be a place where your customers can learn about your business, shop their favorite products or services and interact with employees.

Closing Thoughts

As much as Gen Zers are often criticized by previous generations, they’re now a huge part of our working economy and deserve to be respected. Instead of trying to alienate them, let’s be cognizant of their traits and try to understand where they’re coming from. By doing so, your business will be in a much better position to profit from customers of tomorrow.