By Florence Duvivier and Jiachen Yang, professors of strategy at NEOMA Business School
New technology is constantly evolving and changing our consumption habits as a result. For example, since the pandemic, it is clear that over the past 12 months consumers have turned to online shopping on a massive scale, making it the new norm.
To avoid the spread of Covid-19, e-commerce has taken hold even faster than expected. But what about the ultra-connected and over-informed generation Z; the first generation of true digital natives? We decided to conduct an exploratory study which focused on this generation, born from the year 2000 onwards.
Our study is based on a hundred or so interviews conducted in France, India and China. Our questions concerned the consumption habits of generation Z since the pandemic, its changes and persistence, and its impact on companies wishing to remain competitive. Indeed, generation Z is expected to benefit from the greatest transfer of wealth from their parents and grandparents, which is likely to make them consumers with enormous purchasing power.
In fact, generation Z is known to be a particularly demanding group of consumers because of their desire for constant innovation, their spontaneous communication, and the fact that they were born in relatively prosperous times. As a result, they represent a major challenge for companies.
This is also a generation that forms its own opinions from the overabundance of information it obtains through the internet. The future of consumerism and the economic model, which is largely based on consumption, is very much dependent on the dynamism and demands of this generation.
But what did our results show? Well, they underlined that seeking advice on products on the Internet, rather than in a physical shop before buying, is something that has not changed. Generation Z still feels as dependent on the internet after the pandemic, which means that the billboard on the street has much less impact on the generation Z consumer today.
In our opinion, this trend is a phenomenon with major impacts on the economy of the future. In particular, the tendency to consult information about products or services online (“the world of bits” according to investor Peter Thiel) before buying them offline (“the world of atoms”) may be one of the first steps towards the eventual transition of our lives as consumers to the virtual world. Indeed, Facebook has already announced its transformation and rebranding into the Metaverse – an immersive 3D virtual world. According to our study, generation Z may become the first to switch in its majority to a digital world for consumption, production, and living.
Our research also shows that consumption and purchasing frequency has increased significantly since the pandemic. The respondents do not see themselves abandoning these new consumption habits in the future. Because there is less time wasted than in a shop, and the 24/7 availability of online shops is very useful.
We also identified a difference between the attitudes of generation Z consumers in France and those of generation Z consumers in India and China. In particular, we observe that young consumers in more dynamic markets such as India and China, where the consumer culture is more recent, are more willing to keep the consumption habits acquired during the pandemic in the future. Moreover, despite the adaptation of new habits by young French consumers, many of them think they will revert to their old habits once the pandemic is over – which could suggest a form of nostalgia. They are aware of spending more unconsciously and ordering unnecessary products most of the time.
Ultimately, generation Z are by no means spectators – their technological knowledge and their power to influence is incredibly powerful from a consumer perspective. Given that generation Z was born into a time of rapid and continuous change, and has experienced transformative events throughout its lifetime – the 9/11 attacks, the subsequent War on Terror, the 2007-2009 Great Financial Crisis, and the Covid-19 pandemic – generation Z is well equipped to adapt to the demands of life, and companies need to continuously consider this.