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Ernst & Young research uncovers five distinct Gen Z segments business leaders need to know.
Employers and business leaders take note: a one-size-fits-all approach to defining a generation will cost talent and customers. As Gen Z, the generation of those born between 1997 and 2007, begins to enter the workforce and flex its newfound spending power, connecting with them is critical.
Don’t assume! Gen Z contradicts many expectations.
Ernst & Young recently released the Gen Z Segmentation Study, which confirms bucketing the most diverse generation to date into one simple type would be a costly mistake. Research shows Gen Z to be a walking contradiction to society and past youth when it comes to social media usage, core values and politics.
These identities provide the foundation for the five key Gen Z segments:
“Companies need a Plan Z and to recognize the power of five—or that each Gen Z segment brings unique value,” says Marcie Merriman, cultural insights and customer strategy leader for EY Americas. “Understanding the drivers of each Gen Z segment is critical to providing them with the products, services and experiences they desire as consumers and the jobs they seek as employees.”
Societal changes impact how Gen Z is being raised.
There are many components influencing the diversity we are seeing among Gen Z, such as technological innovations, medical advances and changing social norms. Gen Z is the first U.S. generation born of three generations, meaning their parents can be baby boomers, Gen X or millennials. The research shows that diversity also exists among the parents of Gen Z:
The study found a correlation between parenting styles and the Gen Z segments they foster. The more involved parents are, the more likely their child is to be a Stressed Striver or Authentic Activist, while the more detached parents are likely to raise a Carefree Constituent or Secluded Perfectionist. The following chart further details these relationships:
Companies should embrace transparency to address Gen Z’s trust concerns.
As an extremely diverse, independent and proactive generation, Gen Z have strong personalities and values, making it hard to gain their loyalty—67 percent of Gen Z say that people cannot be trusted. With the disposable nature of the current society, loyalty may seem like a lower priority to Gen Z, causing a greater challenge for companies. Transparency will help companies gain Gen Z’s trust and provide them with a platform to remain authentic, connected and fulfilled, and therefore, more aligned with their values.