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Demystifying Gen Z: Understanding and Engaging with the Next Generation of Investors

Feb 22, 2024 | Corporates

Gen Z is literally changing the game when it comes to what they buy, how they invest, and the kind of workplaces they’ll work in. 

Even though everyone’s been trying to figure them out, a lot of brands are still missing the mark on how to really get their attention. So, in this article, we’re diving deep into the Gen Z universe. We’re spilling the tea on what makes them tick, from their core values to their unique tastes, as well as giving some top tips for businesses looking to connect with Gen Z investors.

Breaking Down Misconceptions

The most common misconception about Gen Z is that they have a sense of entitlement and a lack of willingness to work hard to succeed. 

But, a study by Stanford University reveals a very different reality. According to their research, Gen Zers are generally more self-driven individuals who deeply care about others, strive for diversity and collaboration, and value flexibility, authenticity, and non-hierarchical leadership. 

On top of this, according to a study by Oliver Wyman, 54% of Gen Zers in the US and UK have a side hustle, demonstrating their entrepreneurial spirit and willingness to hustle in the face of economic challenges.

Older generations looking to fathom how Gen Z ticks, have to remember that they’ve grown up under unique circumstances. They’re the first digitally native generation, and are trying to thrive in the face of the climate crisis, COVID-19, and consistent economic instability.

With this in mind, it’s important companies recognise Gen Z’s unique challenges and how this shapes their financial decision-making. Limited opportunities for homeownership, for example, has pushed the younger generation to look for other ways to secure their financial futures. 

Gen Z is eager to invest, with a significant portion actively seeking investment opportunities, particularly in sustainable and socially responsible ventures. 

Insights into Gen Z Values and Preferences

A recent study by Motley Fool revealed that 37% of Gen Z investors choose to invest in individual stocks – the most popular asset. There’s a lot of competition to attract this investment and having a connection with a company is a big driver for Gen Z in deciding where to put their precious cash.

Understanding Gen Z’s values and preferences is crucial for effective engagement. They prioritise authenticity, diversity, and social responsibility in brands they support. They value experiences over material possessions, seeking memorable and immersive interactions with products and services. This also extends into the companies they invest in.

Furthermore, as well as spending a lot of time on digital channels, the Stanford study found that Gen Z also values personal, and in-person communication. They require opportunities to engage meaningfully, to probe and to receive clear answers to their questions.

Practical Tips for Engaging with Gen Z

Based on insights into Gen Z’s values and preferences, here are some practical tips for companies to engage effectively with this demographic:

  • Authenticity: Strive for transparency and be genuine in communications and actions. Gen Z can quickly spot inauthenticity and values companies that are true to their values.
  • Personal engagement: Personalise engagement with investors and open up opportunities for two-way conversations. Offer opportunities for in-person engagement, as well as through digital channels. Our recent blog about reimagining AGMs has some great tips. 
  • Digital Engagement: Leverage digital channels, including social media and online communities to reach and engage with Gen Z. Companies that effectively utilise digital platforms can build strong connections with Gen Z consumers and investors.
  • Diversity and Inclusion: Prioritise diversity in an authentic way, devise robust initiatives to drive forward greater diversity and inclusion and be open and honest about how they perform. Be open to suggestions and questioning from younger investors.
  • Sustainability: Prioritise sustainability and corporate social responsibility initiatives. Gen Z is passionate about environmental and social issues and will seek to invest in companies making waves. But again, be authentic and open to questions, suggestions and criticism from the new generation of investors in this area. 

By embracing authenticity, diversity, sustainability, and digital innovation, companies can build meaningful relationships with Gen Z investors, driving long-term loyalty and success in the marketplace. 

Understanding and engaging with Gen Z is essential for businesses to thrive in the evolving landscape of consumer behaviour and investment trends. As Gen Z continues to shape the future of commerce and investment, companies that adapt to their values and preferences will be well-positioned for success in the digital age.

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