It’s Gen Z, and the times are a-changin’
● Millennials have been accused of killing so many products and industries — taxis, landlines, snail mail — that it’s become a media trope. But millennials are old news. Today, businesses and marketers are desperately anticipating the murderous whims of Gen Z, the demographic born after 1996.
Gen Z makes up more than one-fifth of the US population and members are true digital natives who report being online “almost constantly”, according to a 2018 study by Pew Research Center. (Psychologists have said their technology use has produced a national mental health crisis in the US.)
More than 70% of Gen Zers influence their family’s spending, according to a 2017 report from IBM and the US National Retail Federation. With that kind of sway and billions of dollars in spending power, they have businesses scrambling to understand their desires.
The generation wields a deadly combination of economic power and social media clout. A disparaging tweet from Kylie Jenner this year about Snapchat wiped out $1.3bn (about R18bn) in Snap’s market value. But businesses have been declared “dead” before. Millennials, after all, were supposed to kill off wine corks, dating, beer, cereal and bars of soap, but those things are still alive.
Still, if a tweet has the capacity to move that kind of capital, how else will this generation move markets and shape industries?
The first expected victim of teen spending preferences is brick-and-mortar retail. Malls in the US have been closing at a record pace as e-commerce becomes the preferred mode of shopping for millennials and Gen Zers.
Retailers are grappling with young Americans’ demand for personalised, digitally augmented shopping experiences. An astounding 93% of Gen Zers prefer to shop without the help of a sales associate, according to a 2017 survey by Adyen, a global payments processor.
The apparel industry at large is already dying. In 1977, clothing accounted for 6.2% of US household spending. Today, that number has halved to 3.1%, according to government data. Even fast-fashion stores, which have made clothing cheaper, are seeing slower growth.
Brands that have historically marketed to teens are struggling as well. Retailers Aeropostale, Pacific Sunwear and American Apparel all filed for bankruptcy in the past two years, and more are expected this year.
Print magazines of all kinds are seeing newsstand sales decline. But teen magazines have struggled more than others. In November 2017, Condé Nast closed the print edition of Teen Vogue. Hearst Communications’ Seventeen magazine, a 73-year-old print publication, slashed frequency from 10 magazines to six in 2016. The company also eliminated CosmoGirl in 2008.
Though print may perish, magazines geared towards young women are bolstering their digital and social channels to spur new forms of online engagement. And it turns out, young Americans are fired up by online political content.
Teen Vogue drew attention for reaching young women on digital platforms during the 2016 election when an opinion piece, “Donald Trump is Gaslighting America”, dominated the news cycle with more than 1.4-million unique views. This year, the brand has seen increased digital engagement, particularly with content on sexual health, reproductive rights and gun reform.
“Teen girls are so much smarter than anyone gives them credit for,” said Phillip Picardi, Teen Vogue’s digital editorial director. “We’ve seen an immense resonance of political coverage with our audience.”
US teens are four times less likely to use cash than the general public and only use cash for 6% of their transactions, according to data from teen debit card company Current. Younger generations are also more likely to say they’d like cashless and cardless options at restaurants. And the majority of people under 30 prefer to use cards over cash, even for transactions under $5.
Unsurprisingly, money-transferring apps — such as Venmo, Google Pay and Apple Wallet — are seeing continued growth.
“This generation has grown up with a mobile device that is also a payment device,” said Stuart Sopp, CEO of Current. “They are going to accelerate the adoption of the digital economy because digital payment is native to them.” — Bloomberg