Decoding Gen Z: what’s driving this consumer cohort now?

The younger generation appears to be a myriad of contradictions. These consumers campaign for sustainability, yet ferociously hunt down the latest viral product on TikTok. They say they hate tech but appear to be glued to their phones.

Yet Gen Z is an endless source of fascination and confusion for trend forecasters, brand marketeers and ingredients companies alike. Not just because they are the future of spending power, but also because they are so unpredictable compared to previous young generations.

Love codes "prioritise inclusivity and unbridled emotion"​

On the topic of Gen Z’s specific needs and preferences, Swiss fragrance company Givaudan is dedicating an entire exhibition "What is love?" ​to this generation. The showcase, which will run in New York and Paris in October, focuses on Gen Z's definition of love and seduction, which has been translated into exclusive fragrance creations.

The company said it had extensively researched the topic to ensure “the most accurate and nuanced olfactive expression of these new 'love codes', which prioritise inclusivity and unbridled emotion.”​

While Gen Z certainly has a different view of love and relationships to previous generations, and a hyper-focus on inclusivity, it also has a very different view of consumption.

Ernst & Young (EY) shared that in a 2023 study, 47% of US Gen Z consumers said they had bought something in the past 12 months that made them feel guilty.

Creating 'work-arounds' to these barriers​

According to Marcie Merriman, EY Americas Cultural Insights & Customer Strategy Leader, Gen Z has a greater awareness of the environmental impact of their purchasing than past generations, coupled with a desire to 'do the right thing'.

“However, they believe doing the right thing often comes at additional cost and lacks in convenience,”​ said Merriman. “So, they are creating ‘work-arounds’ to these barriers – and new markets in the process.”​

Merriman referred to the pre-owned and repair market, which has seen substantial growth in the fashion industry​ in recent years.

She believed this was because “they allow Gen Z to get the goods they want with lower environmental impact.”​

Merriman also said that in her research she frequently hears Gen Z consumers say they feel bad for purchasing products that are not environmentally friendly.

“Brands may have their business now, but when a customer feels bad about buying your product it isn’t a long-term strategy,” ​she said.

EY research revealed that globally, 46% of Gen Z consumers said they expect to buy more second-hand products within the next three years (Source: EY Future Consumer Index, Global, 2023)​.

According to Merriman, the recent explosion of the second-hand market (mainly in fashion) is “largely driven by Gen Z’s desire and awareness to purchase second-hand for both financial and environmental reasons.”​

“The “not new” market is a norm for ​Gen Z and 66% of Gen Z global consumers said they would repair things rather than replace them (Source: EY Future Consumer Index, Global, 2023)​,”​ she said. “They are aware of the longevity of their purchases and intentional in their spending choices.”​

Loyalty is hard to come by​

Gen Z’s ability to generate word-of-mouth influence, spreading farther and wider more rapidly than any past generation had the ability to do, has also changed the consumer landscape.

Merriman notes that while Gen Z can be vocal when they are happy with a product, gaining their loyalty is increasingly hard to come by.

“From social media reviews to user-generated content, they expect to be fully understood by the brands they support and will “share the love” with their networks,” ​said Merriman.​

“But part of this means they are holding brands to a higher standard and will intentionally avoid buying from brands that have wronged them in the past, or are not doing enough to fix the wrongs of the world.”​

Taking steps to curb spending​

The looming financial crisis may also have contributed to Gen Z putting less emphasis on the environment than it previously did, as they can't afford to pay the prices for more eco-friendly products.   

Merriman said that EY’s research now shows that consumers are prioritising issues that affect them directly as individuals, rather than those that feel like collective challenges, such as their concerns about the planet.

“Naturally, many are taking steps to curb spending but how they manage their budget is dependent on where they live,” ​said Merriman.

“Globally, people are focused on value, with 73% of consumers noticing pack sizes reducing but the price staying the same and 64% believing private label products are just as good as branded ones.”​