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Gen Z Is About to Disrupt Business - Or Not

Gen Z Is About to Disrupt Business - Or Not

Gen Z - loosely defined as those between thirteen and twenty-five years old- garners much media attention. After all, businesses must prepare as this generation enters the workforce and increases consumption. If you don’t appeal to Gen Z soon, your business will get smaller because your products won’t be relevant to them. Or so the pundits will tell you.

The problem is that this logic - repeated every time a new generation emerges - can be deeply flawed. Certainly, each generation makes its imprint on the world and comes with unique habits that change markets. Gen Z is no different. For example, according to Pew Research, they are more racially and ethnically diverse and are on track to be the most educated generation. Those attributes will endure.

The problem arises when enduring attributes get mixed with temporary ones, creating a misleading picture. This includes not accounting for how worldview as conservative or liberal evolves, which affects how customers perceive, consider, and ultimately buy products. Generations don’t freeze their values when they graduate from school - there are shifts over time.

Let’s take two new research reports from Morning Consult to illustrate this. In one report, Gen Z demonstrates strong favorability for NBA players. The top five athletes for Gen Z are LeBron James, Stephen Curry, and Kevin Durant from the NBA, and Cristiano Ronaldo and Lionel Messi from soccer. Professional football only has two representatives in the top ten, while baseball and motorsports don’t have any.

If you’re running the NFL, MLB, or NASCAR, this report will concern you. It can feel like an existential threat. You might assign a team to determine what it will take to attract Gen Z customers, so you have them in the future.

If your business wants to reach Gen Z over the longer term, you might make plans for shifting investment toward the higher-scoring sports leagues. That would be a mistake.

A second new report from Morning Consult demonstrates that Gen Z has strong preferences for horror and animated movies compared to the general public. Cue the studios to produce more horror and animated films for the next fifteen years.

If you create advertising, you may want to consider integrating horror elements or animation in your work. It’s the future! Or maybe it’s not.

The Morning Consult reports are accurate - the implications for the future are in question. Making decisions for your business based on these rankings as a way to future-proof your business would not work. Here’s why.

Over the past one hundred years, the entire American population has sorted itself between conservative and liberal (or lean in either direction), including Gen Z. One result is increased clarity around younger generations skewing liberal and older generations skewing conservative, whether you look at the data in 2022, 1982, or 2032.

Sam Peltzman, professor emeritus in economics at the University of Chicago Booth School of Business, studied shifts in worldview as cohorts age using data from the General Social Survey (GSS). He found that worldview profiles by age group mostly hold steady regardless of what period you look at.

This is a view of his data:

As you can see, younger generations steadily become more conservative as they age, regardless of the specific generation. Peltzman states younger adults are “about as liberal, on average, as they have been over the past fifty years.” Current snapshots of age groups from Pew Research support the allocations in 2022.

The NBA is a fundamentally urban, liberal professional sport, as noted in a previous article. The NBA skews more liberal than any other professional sport. Football and baseball draw equal numbers of liberals and conservatives. The alignment of Gen Z with the NBA is simply the alignment of more liberal customers with a more liberal product. Comparing Gen Z’s affinity for the NBA - or any other liberal-leaning product - to the general population will always yield a higher score for Gen Z until they age.

The same argument can be made for Gen Z’s predisposition to horror and animated movies. Both of these entertainment categories skew liberal overall. So when you isolate Gen Z in research and compare them to the general population, these categories will naturally rise to the top until they age.

These predispositions for the NBA and horror films can easily be construed as enduring traits of Gen Z when in reality, they will change, even within a few years. While their sports and entertainment consumption will likely differ from previous generations to some degree, they will generally follow a similar path as Millennials, Gen X, and Boomers. Worldview evolution inside a generational cohort is in constant motion. It doesn’t explain every individual, but it explains markets.

Understanding how generations change over time is paramount for understanding how much your business needs to prepare for younger generations. Separating real differences from those associated with being younger helps you cut through the noise in the media and make better decisions. Looking at Gen Z - or any other generation - through a worldview lens enables you to get to the uniqueness while providing a broader context for generational changes.

This article originally appeared in the newsletter, Red and Blue Customers

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