Global, technology-focused investment firm Battery Ventures released a comprehensive new report on the preferences and behaviors of Gen Z consumers and the opportunities to serve—and build new consumer-technology businesses around—this digitally native, socially conscious and entrepreneurial generation.
According to the document, co-authored by Courtney Chow, a vice president, and Roger Lee, a general partner focused on consumer technology, last year, Gen Zers—born between 1997 and 2012—surpassed millennials to become the most-populous generation on Earth, representing more than 25% of the global population and an estimated $360 billion in purchasing power. But to tap that vast pool of consumer spending, today’s businesses must adapt to Gen Zers’ different preferences and behaviors compared with other generations—and pivot accordingly.
The report found that companies should consider these core themes when creating businesses to serve this generation:
- Values & ethics: Gen Z has a deep belief in ethical and social consciousness. Specifically, 70% of Gen Zers try to purchase from companies they consider ethical, and 90% believe companies must act on social and environmental issues. It showcases a generation that demands ethical behavior from businesses.
- Entrepreneurial spirit: These consumers have a notable entrepreneurial inclination with 62% of Gen Zers stating they have started or intend to start their own business.
- Health & well-being: Mental health is a priority; 37% of Gen Zers have received treatment from a mental-health professional. This group’s pronounced use of fitness trackers (70%) points towards a holistic–and technology-enhanced–approach to well-being.
- Hybrid/remote work preference: This generation shows an inclination toward a changed work landscape, with 85% of Gen Zers preferring hybrid or remote work. It underscores the evolving nature of the professional world.
- Digitally native: Gen Z is the first truly “digitally native” generation. Immersed in digital tools, entertainment and communication their entire lives, Gen Zers are tech-forward, a trend expected to persist with the advent of new technologies.
- Role of social media: Platforms like TikTok, Instagram and more have taken center stage in the lives of this generation. 97% of Gen Zers use these platforms for shopping, an enourmous shift in consumer retail behavior.
- Diversity: As the most-diverse generation in terms of race, ethnicity and sexuality, Gen Zers’ focus on inclusivity, representation and individuality–and expectation that brands reflect their values–should be a major consideration for businesses.
As the first truly “digitally native” generation, Gen Z has embedded technology solutions, including generative AI, into work, school, socialization, health and wellness and every other area of life. Industry analysts predict that 53% of Gen Zers will be monthly generative-AI users by 2025, likely leveraging these technologies for search and discovery, education, work and entertainment, among other applications.
In selling to Gen Zers, businesses must meet these young consumers where they are—online—by using popular social media platforms to cultivate trust and brand visibility.
Founded in 1983, Battery makes investments in founders and management teams developing category-defining businesses in markets including software and services, enterprise infrastructure, consumer tech, healthcare IT and industrial technology and life-science tools. The firm backs companies at all stages, ranging from seed and early to growth and buyout, and invests globally from offices in Boston, San Francisco, Menlo Park, New York, London and Tel Aviv.
FinSMEs
28/08/2023