It is not an unknown fact that each generation’s views, personal choices and consumption patterns are driven by their socio-political-economic experiences. Generation Z, popularly known as Gen Z are people born between 1995 and 2020. They are considered to be true digital natives, as they have been exposed to mobile phones, internet, social networking sites and availability of information at their fingertips from a very young age. In this article, I capture the factors that influence GenZ’s consumption behavior, and what it could mean to the Web3 ecosystem like LaLigaLand, a metaverse ecosystem of LaLiga (can be accessed here, world’s leading men’s professional football league and the likes.
I rely on market search conducted by McKinsey and Company, Forbes Business Council, and Think Now to establish how GenZ’s consumption preferences closely tied technological developments are calling for the need for businesses to explore Web3 technology.
Factors influencing GenZ behavior:
‘True Gen’: Generation Z and its implications for companies,’ by McKinsey and Company available online (hereinafter referred to as “McKinsey article”), dwells into detailed research conducted in Brazil to understand consumption patterns of GenZ and what it means for companies.
This article explains that GenZ grew up in the context of multiple realities, mobility and social networking sites which influences their consumer behavior. “The search for truth is at the root of all of GenZ’s behavior”. This generation relies on easy access and availability of information to create opinions, which drives their consumption patterns. Using social media and networking sites comes natural to this generation, which they utilize to influence other generations through varied methods of influencing. They are True Gen because they use data to drive their decision, ‘they mobilize themselves for a variety of causes, believe profoundly in the efficacy of dialogue to solve conflicts’ and they make the world a better place. Analysis and pragmatism is the basis of their decision making.
As per the above referred article
- Consumption now starts at access to products and services: Approach to the term consumption requires to be revisited. For earlier generations, consumption meant availability of products and the act of consuming. But for GenZ, consumption starts with the availability of information, access to such information which drives their consumption behavior. They rely on varied sources, understand the product and service, evaluate, compare and then decide whether it is suitable for their personal needs.
- Individual identity and values takes precedence over brand: Consumption of goods and services by GenZ is tied to the values they believe in, and what resonates with their individual identity. It has become a ‘means of self expression’ per the McKinsey Article. This article also emphasizes that GenZ is willing to pay for premium products that highlight their individuality, and are eager for personalized products. It also further emphasizes that “Led by Gen Z and millennials, consumers across generations are not only eager for more personalized products but also willing to pay a premium for products that highlight their individuality. Fifty-eight percent of A-class and 43 percent of C-class consumers say they are willing to pay more for personalized offerings. Seventy percent of A-class and 58 percent of C-class consumers are willing to pay a premium for products from brands that embrace causes those consumers identify with. And here’s another finding that stood out in our survey: 48 percent of Gen Zers—but only 38 percent of consumers in other generations—said they value brands that don’t classify items as male or female. Although expectations of personalization are high, consumers across generations are not yet totally comfortable about sharing their personal data with companies”.
- Association with brands tied to ethical values they display: with availability and ease of access to information of varied kinds, and having been popular as a self-taught generation, as per the research findings of the McKinsey article, GenZ expects brands to take a stand. Furthermore, this generation does not distinguish between the ‘ethics of a brand, the company that owns it, and its network of suppliers and partners’. It is essential for companies to showcase that they and their network of partners and suppliers are aligned to the ethical value represented.
- Control over their data and identity: As per the Forbes Business Council article titled, “What Is The Appeal Of Web3 For Gen-Z?”, Web3 appeals to GenZ as it allows control over their own data and identity, which is a backlash by the millennials and GenZ due to control of data and identity by Facebook, Amazon, Apple, Netflix and Google, the centralized data repository giants. Per this article, these generations want technology or applications that have elements that provide for control over their data, identity, privacy and a possibility of earning through these applications. “Web3 is catching on with Gen-Z and younger millennials. They’re going to expect to see more and more Web3 elements that have them in mind offered in goods and services. If your team finds a way to bring this language into your future product line, you’ll be ahead of the game”.
- Everyday experiences like hobbies and home entertainment are a priority: Furthermore in an article titled “The Your And Restless: Generation Z in America’ by McKinze and Company, due to connectivity, GenZ are always shopping, on any available device and in any format or channel. As they prefer to stand out and not fit in, brands are not as important to them, but uniqueness of products are. They want experiences that enrich their everyday lives like home entertainment and hobbies.
What does this mean to business and the Web3 ecosystem?
Technological advances have strongly influenced consumer landscapes. If anything it has brought together individuals of several socioeconomic backgrounds, different generations and varied geographies for a cause, belief or purpose. What does this mean to businesses?
I) Companies may need to transform and adopt technologies that connect with younger generations’ aptitude.
II) Companies are now evaluating their strategy on how to deliver values to the consumer. especially preferences of personalization affecting scale and mass production.
III) Ensure that information pertaining to their business, products or services, values that an organization stands by, etc. are actually accessible, with consumption starting at access now.
IV) Be flexible and provide the option of customization of products to these younger generations. One of the ways businesses can explore this is through partnership with trustworthy brands already in the Web3 space, for example the Laligaland metaverse project which is an immersive space to engage with sports fans and also customers of businesses with the option of creating exclusive digital properties, allow for personalization preferences to peak through avatar customizations and connect these to businesses strategy.
V) Ensure that association with partners for business purposes are those in alignment with the values of the organization, and to ensure that businesses not only preach but also act in accordance with the ethical values they propose.
VI) All businesses will need to keep in mind that younger generations require control over their data and identity, and build a technology strategy that allows for this. Adopting Web3 technologies may just be the way. In fact several consumer brands of the world have explore Web3 technologies like metaverse and nfts. It maybe worth for businesses to understand why these brands are exploring these spaces, the following link maybe of help to understand this aspect: Ever wondered why global brands are on the Metaverse? StadioPlus is a Web3 company bridging the gap between sports industry and futuristic technology. They deliver Web3 solutions to the sports and gaming industry and have created LaLigaLand, a metaverse ecosystem of one of the world’s leading men’s professional football leagues.
Technology has definitely driven the manner in which younger generations conduct themselves in professional and personal spaces. An unprecedented degree of connectivity among themselves and with the rest of the population, has fast tracked consumption and technological trends. This not only opens up several exciting and attractive opportunities for businesses! As stated in the earlier quoted Forbes article, “the first step in capturing any opportunity is being open to it”! Adopting immersive and interactive technologies would create opportunities to better understand the consumer base, their preferences, and stay connected to these younger generations. Is your business ready for it? If not, open to exploring this?