The past nine months saw the next generation enter the workforce.
Born between 1995 and 2010, so-called ‘Generation Z’ reached the age of 19, and those who didn’t continue their education started their career journey.
Unlike the millennials – ‘Generation Y’ – who were likely to be nervous adopters, these individuals embrace technology. In fact, they are highly connected to it and by it, having grown up with the web, mobile phones and social media.
This is also the first time the emerging economies have been so impacted by what has traditionally been a western way of segmenting baby boomers. Here, members of this generation are not just tech-inspired but globally connected. To them, technology creates opportunities for a better way of life.
The social network revolution that this generation has grown up with is demanding new types of relationships. They blog and tweet if they like something. They will do it even more if they don’t. They expect direct relationships with brands and can transform the fortunes of brands through their influence. In fact, a new breed of celebrity has been spawned purely through social media awareness. These individuals become opinion formers for their generation.
Their purchasing behaviour is also somewhat different. They research intensively online. They seek opinion and validation through social media. Their offline demands are for experience, not just transactional efficiency.
I imagine you are thinking: ‘What does this really have to do with me?’ Most customers of financial services companies are at least one or two generations removed from the Z-ers. It may be 20-30 years before they become target customers of our industry. However, I believe this generation will be transformative in three areas.
Firstly, generations influence other generations. There are more than 30 million adult social media profiles in the UK. In the US, 45 per cent of grandparents are on Facebook. The new behaviour of this generation will change the behaviour of many who came before them.
Secondly, companies are changing to keep up with this generation, and it will start with retailers. Whether they are fashion brands, high street stores or online supermarkets, they are already reacting to this generation. We will be forced to keep up as companies redefine their experiences.
Lastly, there is very much an investor view to this world.
This generation is forming new industries and creating new companies. The likes of Mind Candy, which created Moshi Monsters, or King, which created Candy Crush, are rapid success stories.
WhatsApp, the messaging service, was formed largely off the back of Generation Z – and was a $19bn (£11.3bn) acquisition by Facebook. These companies are creating the next big investment opportunities and those firms who identify and back them – especially in their early years – have the potential to generate wealth for investors. However, to do so you need to understand this generation.
So the basic take-out would be: ignore this generation at your peril. Yes, they may be some-way off being your next big customer, but their parents already are, and their influence will reshape how we work today.
Ed Dymott is head of business development at Fidelity Worldwide Investment
