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Gen Z Consumers set to revolutionize Industries

Gen Z

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’ materially-different preferences and behaviors compared with other generations—and pivot accordingly, according to global, technology-focused investment firm Battery Ventures.

Today, Battery 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. The full report, titled “Understanding the Next Generation of Consumers: A Gen Z Snapshot,” is available here. (All material facts below are sourced in the report.)

Investment opportunities exist across a number of key industries to better serve Gen Z, according to Battery. The report found that companies should consider these core themes when creating businesses to serve this groundbreaking generation:

“We are thrilled to unveil our Gen Z Snapshot report, which explores the behavior of this rising generation and offers key takeaways for founders and business leaders who seek to capitalize on the consumer shifts these young people are driving,” said Roger Lee, a general partner at Battery focused on consumer technology and co-author of the report. “It is critically important that businesses at all stages appreciate the unique attributes of Gen Z consumers, as failing to do so could result in diminishing relevance and visibility in the market.”

Portrait of a Generation

Over the past decade, the software industry saw an accelerated shift to mobile content consumption, device usage and the development and monetization of social media platforms, coinciding with the maturation of millennials. However, with Gen Zers surpassing millennials’ population share, these young consumers—now 11 to 26 years old—will soon exert a more dominant role in shaping cross-industry trends.

The Battery Ventures Gen Z Snapshot report explores how Gen Zers—the most-educated generation to date, and the most-diverse in terms of race, ethnicity and sexuality—celebrate individuality, authenticity and inclusivity. Recognizing and embracing these deeply ingrained values, along with Gen Z’s heightened awareness of social and environmental matters, holds significant implications for today’s business leaders. This generation not only desires but expects the brands they choose to align with their ideals: In fact, 90% of Gen Zers believe companies must take action on social and environmental issues, per the report.

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. Gen Zers are also eager to use their digital savvy in their professional lives – 85% prefer hybrid or remote to in-office work. Many are interested in charting their own career paths, either by pursuing entrepreneurship, as 62% of Gen Zers have indicated they have started or intend to start their own business.

“Every generation of consumers makes its mark across industries with unique preferences and behaviors. Nevertheless, we feel that Gen Z is poised to be one of the most-influential generations in history, with a distinct—and deeply principled—consumer perspective, coupled with a global platform through social media,” added Courtney Chow, a vice president at Battery and co-author of the report. “We are excited by the potential of new technologies like generative AI, as well as marketplaces that enable re-commerce, freelance work, mental-health access and more, to appeal to Gen Zers, who have never known a world without the Internet and view digital tools as integral to every aspect of life.”

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