11 December 2023

Gen Z is Losing Steam: How can CPG brands respond to the changing attitudes of Gen Zers?

Crisis fatigue is changing how Gen Z operates in the world. In this piece, the Red Flower Factory unpacks how CPG brands can better address the decline in optimism amongst Gen Zers.

6 minute read

This piece comes from Innovation Specialist Gaby Carruthers of our sister company, The Red Flower Factory.

What happened to Gen Z activism?

Generation Z are the most diverse generation yet, typically pitched as activists, driven by values and keen to make a difference in the world. This has impacted their interactions with brands, demanding stronger ESG commitments and social justice action. Lately we’ve noticed a shift in Gen Z’s behaviours, which influences brand strategy for CPGs; for example Unilever have already taken the decision to stop ‘force fitting’ purpose into their brands. In this article we explore how this plays out in 4 key areas of Gen Z life:

The first Gen Zers entered adulthood in 2015 and in the years that followed there was an awakening to the realities of the world. Coupled with social media and peer-to-peer interaction at a scale never seen before, Gen Z became the first truly global generation. Awareness of social issues ticked upwards, creating a drive to go out and make the world a better place. With newfound awareness of global issues, Gen Z began to lobby government, gaining a reputation as the ‘activist generation’. We pioneered the ‘Fridays for Future’ climate movement which saw school walkouts in 150+ countries. At this time, having only recently reached voting age, there was considerable optimism that governments could deliver on expectations. However, lots has changed in the past few years. We’ve experienced global crises on an unprecedented scale – wars, pandemics, cost of living. The present state of Gen Zers is best described as being in ‘Crisis Fatigue’, we still want the same things, we just have less energy to pursue them.

“Crisis fatigue is wearing them out and Gen Z are becoming more inward facing. […] Their interest in environmental issues and current affairs is ticking downwards. It’s not because they don’t care, but rather it’s a case of mental bandwidth.”

Aditi Kohli, Senior Vice President APAC at GWI

The uncertainty caused by global crises is impacting the wellbeing of Gen Zers, which plays a role in declining optimism. This is in part a hangover from COVID, coupled with the impact of technology. Gen Z are often described as ‘digital natives’, the first generation raised on social media, which has had an unprecedented effect on wellbeing. Globally, ¼ of Gen Zers say their mental health has declined over the past three years. Additionally, 18% Gen Zers rate their mental health ‘very poor’, compared to 13% of Millennials, 11% of Gen X and 6% Boomers.

Where are we now?

Crisis fatigue is impacting our perception of the world. As a generation once full of energy, keen to make things better, our hopes have been reigned in. However, they aren’t completely dashed. We are pessimistic about the present – who wouldn’t be? Looking to the future, realism is emerging. We are accepting the world for what it is, not blinded by false hopes or memories of better times, and we are intent on carving out our own path, focusing on the factors that are within our control.

“Gen Z’s worldview stems from a place of disenchanted realism. […] You can call them cynics, or even nihilists, but they’ll tell you they’re just realistic about the future […] [Gen Zers have] reconciled themselves to the constraints of imperfection and, rather than being overwhelmed by those limitations, are focused on making meaning and finding joy for themselves on their own terms in an imperfect world.”

Oliver Wyman, What Business Needs to Know About the Generation Changing Everything

Technological: We’re Digitally Drained

Technology and social media have a lot to answer for in the eroding mental state of Gen Zers, breeding more pessimism than previous generations.

“I think one of the biggest [differences between Millennials and Gen Z] is a shift from optimism to pessimism. Happiness started to decline, life satisfaction declined, expectations went down.”

Dr. Jean Twenge, Psychology Professor at San Diego State

27% of Gen Zers report a negative effect of technology on their mental health, compared to 19% Millennials, 14% Gen X and 9% Baby Boomers. This is compounded by F.O.B.O, coined by Gallup, the ‘Fear Of Becoming Obsolete’. Gen Z are more fearful of technologies like AI taking over their jobs than older generations. Broadly, the attitude towards new technologies is realistic – accepting their inevitability but engaging with caution. One observable response is nostalgia. – Over 1/3 of Generation Z is nostalgic for the 90s, despite most of us not even being born yet. This goes hand in hand with embracing older technologies, with #DigitalCamera and #FlipPhone trending on Tik Tok, both nearing 1 billion views.

Takeaways for brands

Technology is not the only way forward. New innovations are interesting, but we don’t exist solely online, and are keen to connect in the real world.


Political: No Faith in Government

Politics is the biggest point of pessimism; only 57% Gen Zers believe democracy is preferable to other forms of government. This is due to increasing disconnection from society, in part due to the ‘always online’ culture bred by modern technology. However, despite disdain for current political structures, Gen Z are still politically engaged. We are realists – we still want the same things we always have and recognise the need to act within a flawed system.

Additionally, in the absence of trust in government, Gen Zers are seeking genuine political stances from brands. Consider Oreo vs. Bud Light on LGBTQ+ acceptance:

Bud Light

Bud Light recently ran a campaign with trans influencer Dylan Mulvaney. However, it was met with considerable backlash from Bud Light’s audience, and instead of standing by the partnership, Bud Light released a statement ultimately distancing themselves from their own campaign.

Their lack of allyship, as well as throwing Dylan into a fray of hatred, makes this campaign, or lack thereof, the biggest corporate Pride Month embarrassment of the decade.

Ren Bowman, Senior Marketing and Multimedia Producer at The Digital Voice

Oreo

By contrast, Oreo ran a ‘Proud Parent’ campaign depicting the impact of parental acceptance on young members of the LGBTQ+ community. The advert was very well received, with comments such as:

“[They’re] using their platform to speak for the people.”

Social Media User

“They paid a lot of money to spread this message on our behalf. So yeah, I’m gonna go buy some Oreos to say thanks.”

TikTok User

It can be tempting to fence-sit, especially in extremely polarised countries like the US, but this often comes across disingenuous. Luckily, Gen Zers are much less polarised than older generations when it comes to key issues. Take gender roles for example. Gen Z republicans are 150% more likely than older republicans to believe that traditional gender norms and roles are outdated, suggesting that integral Gen Z values are shared across party lines.

Takeaways for brands

Gen Z are seeking hope and support for their values, but sensitivity and authenticity is important. Align with causes that connect to the core of your brand and don’t stand for everything. As the saying goes, ‘if you stand for everything, you stand for nothing’.


Environmental: Sustainability Slump

Gen Z were previously known as the sustainability generation, pioneering ‘Fridays for Future’. However, as mentioned, crisis fatigue has set in; combined with new adult responsibilities and a cost-of-living crisis, Gen Z are often unable to shop in-line with their values.

Declining trust in government also has a role to play here, reducing expectations. This being said, they are still keen to make a difference, as the biggest believers in individual climate change action out of any age group. Brands can help by making individual action easier:

  • Sustainable fashion brand ‘Yes Friends’ offers high quality basics at prices comparable to high street brands, due to large order quantities and lower margins.
  • SOJO, a Gen Z founded brand, has taken the hassle out of clothing repairs. Dubbed the ‘Deliveroo of Clothing Repairs’, SOJO’s couriers collect damaged garments, take them to seamstresses to be fixed, and return them to your doorstep.

Takeaways for brands

Offer sustainable products at comparable prices and make individual action easy. Gen Zers want to make the world a better place, but crisis fatigue and worsening economic situations mean that we cannot always act in line with our values. Brands that allow us to shop sustainably without compromising in other areas, will gain our trust and loyalty.


Financial: We’re Hustling

Young people believe that the current financial situation is hindering their independence. In Southeast Asia a staggering 95% of Gen Zs and Millennials believe that having multiple sources of income is necessary. However, we do expect things to improve, with 4/5 Gen Zers expecting to be at least as successful as their parents.

Why? Gen Zers are realists about finance, setting themselves up for future success despite the current situation. On TikTok financial advice is shared under #FinTok, which has 4.4 billion views. Gen Zers are also the biggest users of fintech, with apps like Juno making complex financial knowledge accessible to the masses, described as ‘the Duolingo for finance’.

It’s important to understand Gen Z’s financial mindset when selling to this consumer group. One way to reel in young money-savvy shoppers is through loyalty schemes. American makeup company Kiki Beauty have a particularly innovative model, with NFC chips implanted into their products, which can track when the product is opened by connecting to the smartphone app. Through this system, customers are actively rewarded every time they use the product.

Takeaways for brands

Gen Z are money conscious; they appreciate when products are priced fairly and transparently. Achieve their loyalty through discounts and reward schemes.


Conclusion

Gen Z are becoming increasingly realistic, rather than optimistic. We accept the current state of the world and are keen to make better lives for ourselves. We are becoming more inwards-looking, focusing on our own financial futures and individual contributions to sustainability efforts. We still want the same things we always have; we just have a little less faith in government to effect change on our behalf. Against this backdrop, brands can:

  • Stand up for our values, offering a pillar of hope and community.
  • Acknowledge the hard times, holding space for pessimism.
  • Offer deals and loyalty schemes to ease financial pressures.
  • Make individual action easy.

In our latest knowledge piece ‘Gen Z Gets Real’ we explore these factors, and the implications for brands, in greater detail.

Schedule a presentation of our latest report ‘Gen Z Gets Real’ to learn how your company can respond to new demands from the youngest consumer group.

For more information about how the Red Flower Factory can help your brand reach new generations of consumers, check out their website.

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