In my last Collab Hour presentation, I mentioned that there was evidence that Gen Z (the generation that starts in the mid to late 1990s) shows different preferences than Millennials, especially regarding their relationship with the “local”. Based on the questions and comments at the end of the presentation, there was great interest (and some incredulous disagreement) with this statement. So I thought I’d write an article about what we know about Gen Z, focusing on things like the preference for “small” and “local.”
I’ll start by saying that “generational histories” can have insight, but we shouldn’t overstate how well we can describe the collective actions of tens of millions of individuals. Also, there’s nothing magical that makes a Gen Z-er different from a millennial, who’s only a few years older, so what we’re really talking about are subtle changes over time. more than stark differences that arise at what are partially arbitrary birthdate thresholds.
Also, we don’t know much about alcoholic beverages yet. Depending on which threshold you’re using, the legal drinking age of Gen Z is capped at 21-23 (18-23 for our Canadian readers), and if you remember being that age, you probably had quite a few preferences. different from what you have now. So we need to separate the differences between Gen Z and Gen Y that are real worldview differences from those that are differences based on age and life stage.
Gen Z cares about actions, not attributes
With those two paragraphs of caveats out of the way, as you dive into the data, I think there are many signs that the next generation will want different things and interact with your businesses in different ways, like all the generations before them. If I were to state this as an all-encompassing meta-theory, Gen Z cares less about attributes and cares more about actions. So who you are in terms of “local”, “small”, etc. matters less than what you do as a local small business.
Let’s start with “local” support, which generated the most discussion during my Collab Hour. I scoured the raw data from our Nielsen-Harris survey last year (which we sampled specifically so we could look at some of these smaller age groups).
Here is the percentage of respondents for whom the local was quite or very important according to age:
- 21-24 = 57%
- 25-34 = 66%
- 35-44 = 70%
As I wrote above and mentioned on the call, we are not talking about a seismic shift, but a trend. Now you might say “maybe they’ll care more about it in a few years when they’re older and can afford it!” It’s a good theory, but I don’t necessarily see it in the data.
Here is the same Nielsen survey from 2015. Please note: we did not boost the sample that year, so the sample is only 26 for 21-24 year olds (compared to 136 this year). That said, at the time, 21-24 year olds were After likely to say that local was important to them.
- 21-24 = 69%
- 25-34 = 63%
- 35-44 = 65%
Again, I don’t mean to exaggerate these results or suggest that they are definitive. We are talking about a larger survey question with a small sample. The margin of error is almost 20% for this group of 21 to 24 year olds in 2015.
That said, I think this data supports a larger theory I’ve laid out: Gen Z cares less about who you are and more about what you do.
This means that weaker automatic local support does not translate into a rush of Gen Z users to large enterprises. Salesforce search found that 63% of Gen Z say they “trust business” compared to 71% of Millennials. This follows the longer three-decade trend of declining trust in big business (see chart below with data of Gallup).
Trust in big business
Source: Gallup (2020)
So, stepping back, I believe Gen Z will be willing to support local businesses, but they won’t support them just because they’re local. This is a generation that wants to connect and know all about who they’re buying from, and as the most connected generation ever, they have the skills to find that out quickly. A McKinsey Report coined Generation Z as the “real generation” (it didn’t become a nickname) and discussed how they will have ethically grounded consumption: “In a transparent world, young consumers don’t make distinction between the ethics of a brand, the company that owns it, and its network of partners and suppliers. A company’s actions must match its ideals, and those ideals must permeate the entire stakeholder system.
For small brewers, this could mean an initial challenge to connect with Gen Z – local small businesses won’t get their trust or business just by being small and local. But it offers a greater opportunity. By taking action as part of your community and walking, Gen Z may be more likely to connect with local brewers who demonstrate why local support matters.