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Gen Zs or “Zillennials” are on track to overtake the famous millennial cohort and are set to transform the way business and investing is done with their flight-shaming, plant-based and zero-alcohol habits. Analysts in a new Bank of America research report say that investors and companies should take note of these emerging trends, or risk falling by the wayside.
Get prepared for drastic changes that will disrupt everything from alcohol consumption to traditional financial management, Bank of America strategists said in a recent research report. The fastest-growing generation in the world, Gen Zs or “Zillennials” – the cohort born between 1996 and 2016 – will see a 400% income growth over the next decade to surpass millennials’ spending power by 2031.
90% of the group will be living in emerging markets – a whopping fifth of the population in India and developing countries like Mexico, the Philippines and Thailand also set to account for a significant portion. With their preferences for e-commerce, virtual payments and cryptocurrencies as well as markedly different consumption habits when it comes to meat and alcohol, the researchers believe that certain sectors that lag behind on adaptation or are not aligned with the generation’s values will fall behind.
“The Gen Z revolution is starting, as the first generation born into an online world is now entering the workforce and compelling other generations to adapt to them, not vice versa,” wrote the strategists.
Conducting a survey of more than 14,000 Gen Z-ers in August this year, the analysts found that the majority of the group practice meat restrictions of some kind and do not drink alcohol compared to only a third of millennials who are teetotalers, and many are open or already using new financial technologies such as cryptocurrencies, suggesting that a major reassessment of services will be underway in the banking industry.
In addition, 40% of the younger generation would rather interact virtually with their friends, compared to 35% of millennials, and more Gen Zs regularly watch electronic sports or eSports more than traditional sports games.
The Gen Z revolution is starting, as the first generation born into an online world is now entering the workforce and compelling other generations to adapt to them, not vice versa.
The Bank of America report also finds that Gen Zs are more focused on environmental and social causes across all segments of life, from purchasing more sustainable goods to factoring in ESG-risks in their investments. Polluting sectors such as fast fashion and air travel will likely be hit hard from consumer-driven sustainable activism, and health-harmful industries like alcohol and tobacco will need to innovate their products if they are to avoid falling out of favour with customers.
It is the generation that will have only ever known problem solving through fiscal stimulus and free government money potentially paving the way for universal basic income and health-care access.
Looking further ahead into the future, Bank of America analysts say that the next generation that will bring in sweeping transformations in the world economy will be the youngest of all, who are currently being raised in an era of the global coronavirus pandemic. Dubbed the “Covid generation”, the analysts believe even more forward-thinking futuristic trends will take hold.
“It is the generation that will have only ever known problem solving through fiscal stimulus and free government money potentially paving the way for universal basic income and health-care access,” they wrote.
“Gen C will be unable to live without tech in every aspect of their lives” and “their avatars will protest virtually in the online Total Reality world with their friends on the latest cultural movement.”
Lead image courtesy of Katarzyna Bialasiewicz / Getty Images / iStockphoto.