Baby Boomers are fading, Gen Xers are aging, and Generation Z is rising. Companies intending to be serious players in the retail landscape must turn their eyes to the Generation Z market. Known colloquially as “Zooners,” this market segment is aged 12 to 25 today. They comprise approximately 32% of the Philippine population and represent 300 million consumers, ASEAN-wide.
Zooners are a unique breed and we will do well to understand them. This is a generation that has seen nothing but political and economic turmoil. The more senior Zooners were born during the height of the Asian Financial Crisis of 1997 to 1999. They also lived through the hardships brought about by the global financial crisis a decade later. Unlike the generations before them, Zooners are well aware of the value of money and what it takes to eke out a living.
Filipino Zooners lived through political upheaval as they witnessed the ouster of President Joseph Estrada in 2002, the scandal-ridden years of GMA and blowback of infrastructure shortfall under PNoy. Their idealized image of a President was shattered as President Duterte cussed his way through his presidency while praising China, our tormentor in the West Philippine Sea row.
But all these were nothing to the consequences of COVID-19. The pandemic consigned Generation Z to two years of home confinement, unable to learn or socialize in the traditional manner. Zooners who just entered the workforce face a tight job market as companies downsize due to the contagion.
Zooners grew up with technology, hence, are considered “digital locals.” They are the first adaptors of artificial intelligence, automation robotics, digital and alternative payment methods, data cookies, voice controls, and automated digital marketing.
The turmoil that Zooners had to go through has given rise to unique characteristics. They are more financially pragmatic and risk averse than Generation Xers or Baby Boomers. As such, the greater majority prefer to study STEM courses over the humanities since STEM is perceived to offer more job security. This has made them analytical thinkers.
They have a strong belief in social causes and are generally more welcoming of new ideas. This is the generation that normalized the LGBTQIA+ lifestyle and the many permutations that exist under the “rainbow.” They are also the generation that quashed the misnomers (and stigma) of mental illness. Zooners have taken a strong stance against global warming since they are the most vulnerable to it.
They have a strong individualistic streak. Zooners refuse to be defined by categories or labels — they prefer to define themselves by their own terms. They are not as impressionable to trends as the generations that preceded them. Many Zooners prefer to buck fashion trends and instead carve their own path.
That said, Zooners display unique behaviors as consumers. They tend to be more informed and will often research and weigh options before making buying decisions. They tend to be less attached to specific brands, instead preferring to shop around for the best deal. They place high importance on brand ethics and corporate responsibility. They are most likely to shop on-line and are more receptive to ads on social media.
While Zooners are price conscious, they are not price centric. They have a preference for brands or products that show a balance of value, quality, and ethical practices.
When it comes to shopping, Zooners show the following habits: Despite being the generation that spends the most time online, Zooners prefer to shop on-premise to experience the “human touch.” As customers, their expectations on service and product quality are higher than that of Baby Boomers or Gen Xers. They like individualized shopping experiences that can be tailored to their own personal preferences.
Interestingly, Zooners have more influence on the consumer market than their spending power suggests. A great number of them still live under the roof of their parents and dictate the family’s buying decisions.
Experts from KMPG Consulting suggest broad guidelines when targeting the Zooner market. Products must be gender and size inclusive and must be sustainably manufactured. Services must be personalized, whenever possible, and frictionless to the extreme, using technology as an enabler. Experiences must be extraordinary and delivered as advertised.
As for attracting the Zooner market, companies will have the best chance of attracting them if they have an omnichannel strategy. Although this is true for all customers, it is especially true for Generation Z since they use multiple channels to shop – from on-premise, to social media, through influencers, through live streaming, etc. A seamless connection between channels must be assured. Moreover, Zooners demand an immediate response to product inquiries. While they do not mind talking to robots, many still prefer human interaction when booking a purchase.
As mentioned earlier, a socio-civic or humanitarian slant will always be an advantage when addressing a Zooner customer. But an occasional environmental post on social media won’t do. Zooners are sensitive to a brand’s dedication to an advocacy. The effort channeled by brands towards their advocacy must be palpable and sincere. Correspondingly, Zooners are activists and will not hesitate to call for a brand boycott if they discover unethical practices.
Zooners have become a market demographic too important to ignore. Brands playing the long-term game will do well to understand them and address them on their terms.
Andrew J. Masigan is an economist