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Gen Z: The World’s most powerful consumers.

Gen Z will soon make up 32% of the world’s population, and account for 40% of global consumers. As the first generation to be complete digital natives their digital behaviour is transforming the consumer landscape, permeating the whole demographic pyramid and impacting on cross-generational shopping habits. When considering the influence they have on their parents’ spending their buying power expands from $44 billion to $600 billion. With this size, dominance and influence they are set to become the most powerful consumers for the coming decade.

Having never known life without complete self-digitisation, for Gen Z there is no boundary between the on and offline worlds. In fact, they often exist in the former as naturally, if not more so than the latter. Whereas most Millennials hesitatingly grapple with their digital identity, preferring to cloak themselves in anonymity, Gen Z’s digital life is dominated by the near constant production of videos and images of themselves. Consequently, while Millennials rely on the internet primarily to access information, opting for platforms like Facebook and Instagram, which trade predominantly in text and still images, Gen Z seeks more media rich vehicles for self expression, preferring platforms like TikTok.

This prodigious content creation and constant connectivity is a vital facet of their social lives. Social networking transcends being just a hobby and is in fact a primary means of identifying themselves. Rather than aligning with particular communities for long periods of time, they move between groups, experimenting with different ways of being themselves and shaping their identities over time. Despite being identity nomads, they are not fickle. They look for meaningful online connections, so value authentic self-expression, which in turn fosters high-levels of trust - 56% of Gen Z make friends with someone they only know online and have never met in person, and 23% trust someone they meet online more than someone they meet offline.

Unsurprisingly, the characteristics defining how Gen Z socialise online are shared by how they consume. When it comes to fashion, the clothes they choose to wear are a part of who they are seen to be. Therefore, the importance of authenticity extends beyond just the individuals they connect with and includes the fashion brands they choose to invest in. They expect brands to take a stand when it comes to environmental and social issues and are quick at gathering the information they need to establish the authenticity of a brand’s worldview - 65% of Gen Z try to establish the origins of anything they buy before purchasing.

Gen Z don’t just look for fashion brands which share their ideological preferences, but ones which can offer them a bespoke shopping experience. Because they have fully immersed themselves in the online world their digital footprint is often bigger than their physical one, meaning their data exhaust is a treasure trove of information about them. They are hyper aware of the information they are sharing, and what organisations can do with it, so they expect a personalised experience in return - nearly half of them will stop visiting a site if it’s unable to anticipate what they want, need or like.

Additionally, Gen Z have come to expect sophisticated and engaging digital experiences. Given the omnipresent role of connected technology, their expectations for the digital world far exceed those of any generation that has come before them. Unlike previous generations their digital fluency has seen them embrace advanced technologies with 64% of them thinking artificial intelligence will have a positive impact on the world, compared to 46% of Boomers. They know what cutting edge looks like, and expect increased adoption of emerging technologies like virtual reality and biometrics over the next 5 years.

As Gen Z looks to the future, e-commerce is stuck in the past. Since the launch of Amazon and eBay in 1994 and 1995, e-commerce has remained largely confined to endlessly scrolling through grids of images. During the pandemic fashion retail made a definitive shift online and e-commerce’s share of fashion sales nearly doubled over a period of 8 months, jumping forward 6 years worth of growth, and compressing transformations in consumer behaviour that were meant to take years, into months. As a result, new pockets of momentum have opened up and new ways to compete have developed. As online penetration accelerates, successful fashion brands will be those that are able to harness these new market opportunities, specifically by delivering value to the world’s most powerful consumers - Gen Z.

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