Recent reports predict that Gen Zers will not only yield tremendous spending power in the near future, but that they will also change the face of retail. One of the first to offer this prediction was online media firm Insider, Inc. In November, a Bank of America study substantiated the same by disclosing that Gen Z’s economic power is not only the fastest growing globally, but that this generation will disrupt some industries based on their values. The reports should serve as an alert for brands wishing to capture their share of this market.
At first glance, the summary of these studies sounds like a good news, bad news story. The good news is the tremendous spending power of Gen Z. Bank of America (BofA) reported that by 2030 earnings of Gen Z will account for more than 1/4 of all global income hitting $33 trillion.
This doesn’t even include the estimated $78 trillion of wealth transfers expected to occur as members of the Silent and Boomer generations pass and bequeath money to the Gen Zers.
The bad news is that Gen Z may negatively affect some industries. What BofA has found is that many Gen Zers will be deserting traditional industries like tobacco, alcohol, travel and meat. More than half Gen Z’s told BofA that they don’t drink alcohol. Another 50%+ said they have a meat restriction of one type or another. As for travel, BofA predicted that GenZ values around sustainability and the ecological cost of travel could also impact airlines and hotels.
Industries likely to benefit are Ecommerce, new media, sustainable luxury, and online payment, says BofA. These should not be surprising as Gen Zers were born and raised on social media. More than 25% told BofA they prefer paying by phone. Credit cards didn’t make their top three options. Earlier articles also reported on the high dependence and usage of digital platforms and mobile devices by Gen Z.
In preparing for the Gen Z finance surge, brands need to ensure that they can easily and safely accommodate mobile payments. Websites and social platforms must also be easy to navigate and use with mobile devices. Brands seeking to market to this generation will need to look more to using digital platforms rather than cable TV.
Industries dealing in goods that may be adversely affected should consider their options. For example, many Gen Zers said they were considering cannabis over tobacco.
The plant-based meat industry was quick to recognize the change occurring in their arena. Eco-friendly clothing and apparel made of recycled materials may be a partial answer to some in the clothing industry.
BofA even discovered that financial institutions need to change for Gen Z. The generation is a lot more favorable to mobile-focused investment platforms and robo-advisors.
It even warned mortgage companies that home sales may decline because GenZers favor city living over a move to rural areas or the suburbs.
The bottom line is that brands need to recognize the change in the marketplace of the future and begin adapting and preparing now.