What Can Small-Business Owners Learn From Gen Z Consumers?

Born between the mid 1990s and early 2010s, Gen Z are the youngest generation of consumers at present, and their expectations of brands differ hugely from those of their older counterparts.  

According to 2021 research by experience management software company Qualtrics XM Institute, which surveyed 9,000 U.S. consumers, Gen Z are a force of trendsetting consumers who influence the purchasing behaviors of older generations, making it even more important that brands cater to their demands. What can small-business owners learn from them? 

Brand Values and Transparency

A brand’s values are increasingly important to all consumers. This is especially true for Gen Z – Qualtrics XM Institute’s research found that they’re more likely than baby boomers to be familiar with the brand values of the products they buy and to say the brands they purchase from are doing enough to address societal and environmental issues (31% versus 17%).  

“​​Gen Z are more aware of a brand’s values and use those to decide whether or not they want to stay a loyal customer,” says Moira Dorsey, principal XM catalyst at Qualtrics XM Institute. “Highlighting these values can make companies more appealing to consumers who use them to guide their buying decisions.

“Small businesses should make sure they’re delivering on their brand promise, whether that’s fast shipping or easy pickup. Gen Z consumers will hold companies accountable to their promises and 70% of them will change brands after a bad experience, so it’s essential to get that right,” Dorsey adds. 

This sentiment is one shared by Hogoè Kpessou, founder of her eponymous luxury womenswear and handbag brand, and at 24 years old, a member of Gen Z herself. Kpessou notes that her generation is significantly more socially conscious than older generations and cares more about how that translates into what they’re spending. 

“Gen Z are a lot more appreciative of transparency, and they want to support companies that address social issues,” Kpessou says. “There’s a lot more information that’s accessible to this generation, and this allows for more socially conscious decision-making.

“Gen Z want to make sure the brand values align with them – not just product-wise but also politically. Gen Z don’t easily support brands with policies or beliefs that harm any marginalized group. I believe this can be seen in how ‘cancel culture’ has manifested itself.” 

Social Media’s Role in Branding

Transparency can be shown by businesses in different ways – perhaps a brand could share a behind-the-scenes peek into its operation via TikTok or create an open dialogue with the customer via comments on an Instagram post.  

While brands once aspired to have a perfect and polished output, owning up to mistakes and being more authentic can give small businesses a significantly better chance at engaging with Gen Z. 

Gen Z are a lot more appreciative of transparency, and they want to support companies that address social issues. [...] There’s a lot more information that’s accessible to this generation, and this allows for more socially conscious decision-making.

—Hogoè Kpessou, founder, Hogoè Kpessou

Gregg L. Witt is co-author of The Gen Z Frequency: How Brands Tune In & Build Credibility. He believes that thinking outside the box when it comes to marketing to Gen Z instantly helps a small business create its own unique identity. 

“When done authentically, getting weird can be a very effective strategy to win with Gen Z,” Witt says. “Weird can even be a brand survival strategy and a way to stand apart from the competition or to defend your ground. People today are expecting brands to get a little weird – young people simply have more free time to ‘embrace weird’ and make it part of their lifestyle.” 

Witt recommends five points of action for small businesses looking to shake up their Gen Z marketing efforts: 

1. Have a good reason for getting weird. Be clear how you’ll captivate your audience or grow your fan base – don’t just jump on the bandwagon. 
2. Create a shared vision of “weirdness” with your team by defining five to seven characteristics. These could include creating content that is clever, shocking, or funny. 
3. Break down the barriers, and prepare to educate and sell your vision for this new approach. 
4. Assemble the right team to create this unique content. 
5. Use a Discord or Slack channel to share ideas with your content creators. 

Gen Z are turning to TikTok for more than just entertainment, using the platform as a search engine to find places to eat, shop, and learn. To excel with this generation, small-business owners must have a presence on TikTok so they can engage and share their vision. 

“Social media is a great way to reach Gen Z consumers,” Dorsey adds. “More so than any other generation, Gen Z say social media is key to maintaining relevance. Having a strong brand presence online will reach Gen Z where they are as digital natives.” 

Gen Z's Expectations of Your Business

While social media has an important role to play, it cannot be solely relied upon for surefire small-business success. Witt believes that while technology tops Gen Z’s needs and wants from businesses, it's only important if it enhances the overall experience.  

“In today’s world, brands can no longer expect to reach Gen Z by relying on traditional social media alone,” he says. “An effective alternative is to learn to engage with fandoms and online communities. Gen Z look for brands that are already contributing authentically to the cultures and subcultural interest groups that young adults are interested in or that are part of the community.” 

Here’s Witt’s cheat sheet for what Gen Z want from small businesses: 

• Entertainment: Be less serious – instead, be more enjoyable and gamified. 
• Ways to make money: Create or sell products that have a resale value to help young people boost their finances.
• Clarity: Communicate clearly at all times.
• Convenience: Strive to make Gen Z’s lives easier.
• Interest: Be legitimately captivating and “weird” with storytelling.
• Support: Offer help in the form of tools, technology, and programing to assist young people in achieving goals.
• Relevance: Offer more relevant learning opportunities as alternatives to traditional college. 

“Above all, Gen Z value community and connection around shared values,” Witt concludes. “This is directly related to acceptance and being perceived as ‘cool’ among peers. They don't demand inclusivity – it's expected.”