Consumer behaviour has changed drastically since the growth of technology, fintech and especially e-commerce. Consumers are much more intentional with what they buy and who they buy it from. A segment of the consumer demographic that is reshaping how businesses approach marketing, pricing and sales channels is Generation Z, a.k.a Gen Z.
Globally, Gen Zs account for over 40% of consumers, and at a total population size of 19 million, this group of 13- to 28-year-olds currently make up an estimated 29% of South Africa’s population.
By 2030, this cohort is projected to have an annual spending power of more than R1,1 trillion. They already influence more than 80% of household purchasing decisions, making them a cultural and economic force no brand can afford to ignore, the report finds.
In South Africa, although many Gen Zs earn under R5 000 (excluding side hustles), they are skilled at managing their money, saving an average of R1 800 a month. More than 60% are also running side hustles to supplement their income in order to cope with the cost-of-living crisis.
They mainly spend on data, airtime, food, drinks, beauty, gadgets and entertainment and value durable, high-quality goods that give them a sense of stability, identity and cultural relevance.
In this article, we look at why small businesses should target Gen Zs, how to do it and the benefits of having the youth as a consumer base.
Who is Gen-Z?
Generation Z, or Gen Z, refers to the cohort born between 1997 and 2012, following Millennials. Known as “digital natives,” they are the first generation to grow up with internet access and smartphones as part of daily life. They are characterised as socially conscious, diverse, tech-savvy, and financially pragmatic.
Gen-Z Consumer Characteristics
Gen Zs tend to have a pragmatic approach to finances and education. Also, they have an affinity for technology, a belief in social causes and a strong individualistic streak. In terms of consumer behaviour, this generation displays the following:
- They tend to be more informed consumers and will often research and weigh up options before making a buying decision.
- They are less attached to specific brands and prefer shopping around for the best deal.
- Gen Zs place high importance on brand ethics and corporate responsibility, more so than Millennials.
- Gen Zs are most likely to shop via social media and e-commerce platforms.
When it comes to shopping, Gen Zs are showing the following preferences:
- Despite being the most online generation, Gen Zs prefer shopping in-store.
- Gen Zs also appreciate having real shop assistants help them with queries.
- They have high expectations as consumers, both in terms of customer experience/service and product quality.
- They like individualised shopping experiences that can be tailored to their own personal preferences.
How to Market to Gen Zs
The following is a list of tips which can help you market your business to the next generation.
Tip 1: Experience Matters for Gen Z
The previous generation – Millennials – want brands that appear to share their moral and ethical values, but Gen-Z wants more excitement. They are looking for brands that understand their world of trends, spectacles, digital intimacy and instant gratification. If your business is currently geared towards customers whose motivation is ‘live responsibly’ or ‘keep everything slow and steady’, it might be time to switch gears.
Tip 2: Pop-up Retail and Sensory Retail Environments
Gen Zs want a more immersive shopping experience, so you need to make them feel excited to shop. A study by Freeman revealed that Gen Z consumers felt a stronger sense of trust towards a brand after participating in a live event, and 64% continued to feel that trust for at least a month.
You need to start prioritising more pop-ups, workshops and customer-led experiences in your business. This will prove to the younger generation that your brand is genuine.
Tip 3: Create Genuine Connections
Gen Zs don’t want brands that just perform; they are seeking brands that show up, mean what they say and make space for real connections. To earn the trust of Gen Zs, you need to forget about traditional influencer marketing and aim for more authentic digital content.
Tip 4: Authenticity Over Perfection
Gen Zs grew up with smartphones and advanced technology and quickly grasped the concept of social media and algorithms. However, they still prefer a genuine human connection. Your business needs to show up on TikTok, Instagram Reels, and YouTube Shorts as your full, relatable, unfiltered self. Behind-the-scenes footage, team shoutouts, user-generated content, and candid posts can grow the connection with Gen Zs.
Tip 5: Sell an Identity
Gen Z wants to be seen, understood, and included, but they also want to have fun. To ensure your business is attractive to them, you need to create experiences that enable them to co-create with you. This can be done through a number of ways, like asking them to name a new product, designing merchandise, or sharing their own user-generated content with your products.
Tip 6: Build your Business for the Next Generation
Marketing to Gen Z isn’t about doing a TikTok dance or using their slang. It’s about understanding their mindset: they want to be entertained, engaged, and empowered through authentic content.
Why Understanding Gen-Z is Critical for SMEs
Gen Z matters to businesses because they represent the future of the global consumer base and workforce. As digital natives with a large purchasing power, they are reshaping markets by demanding authenticity, purpose-driven branding, and sustainable practices.
Understanding Gen Z is essential for three primary reasons:
- Trendsetters and word-of-mouth: Gen Z influences the buying habits of older and younger demographics alike. Their peer-to-peer recommendations and social media virality dictate what becomes culturally and economically relevant.
- Value-driven consumption: Gen Zs refuse to support brands that lack a social or environmental conscience. For many, a company’s stance on diversity, sustainability, and ethics is a direct dealbreaker.
- Workforce transformation: As a young working demographic, they are forcing companies to adapt by prioritising mental well-being, flexible work arrangements, and salary transparency.
So, the question is, should SMEs target Gen Zs? The answer is yes. SME founders who want to future-proof their businesses need to ensure they align their products and customer acquisition strategies with the demands of Gen Z.
Consumer behaviour has changed drastically since the growth of technology, fintech and especially e-commerce. Consumers are much more intentional with what they buy and who… Read More
