The unique lifestyles and thinking processes of global Gen Zs are resulting in patterns and trends that are vastly different from those of the earlier generations. Increasingly, thanks to social media, virtual existence, artificial intelligence, and the ability to ask questions and seek answers largely on their own, the below-30 individuals behave in a manner that requires a different form of understanding. In the developed world, and growing pockets within the emerging markets, they live longer with their parents, marry late (even in the late 30s and 40s) if they do, do not think of families and children even when they stay with parents, and spend more time with themselves or in virtual worlds than with friends and relatives.
Financially, their investments are geared to living, rather than death, and expenditures are driven by immediate needs and desires, rather than long-term planning. This does not imply that they do not understand the importance of making decisions that will affect the future, do not believe in exponential growth of investments, and do not give two-hoots about purchasing assets. The difference with the previous generations is that the savings, investments and assets need to finance their ongoing and future lifestyles, rather than be twisted towards the needs of their children and grandchildren. The money that they have, or will earn, needs to take care of their desires, rather than be saved or invested for another generation.
It is generally undesirable to generalise such a prognosis. Obviously, the above does not, and cannot, apply to every decision. Still, let us give a few examples to explain how Gen Z’s behaviour is different from yours, or mine or older generations. Life insurance is of no use to the youngsters. They do not want money after their deaths. Rather, since they understand the cruciality of insurance, they will invest in life insurance policies, where the payouts are attractive, and during their lifetimes. In contrast, they will invest in health insurance since they realise the growing costs of healthcare, and how private hospitals, which they desire, are extremely expensive. A recent survey among global Gen Zs proves this.
When it comes to real estate, they have no emotional attachments. Unlike those in their 40s, 50s and 60s, a roof over the head is essential. As one of the project managers in a Chennai-based publishing firm explains, “The fear of my generation, and my parents is, and was, about where we will live when we retire. Hence, one of the first things we buy is a house as a safety option. No one can throw me out of my own house.” This does not work for Gen-Zers. For them, a house is not necessarily a home. It is an investment. They will, if possible, buy in a location that may offer lucrative rent or resale value. Even if they live in the house, they have no connect, as they will as easily shift cities for work, and put the property on rent, or sell it to buy another one in a new location. An address, or the place where they stay, is crucial. Not the place they own.
Expenditure too is driven by valuations, not values. They desire branded goods, even if the brands are unique, niche and innovative, and not necessarily those that are famous and popular. But they will seek discounts and smart purchases (during festive seasons or online sales). This does not imply that they will bow down, and buy cheaper products. It means that they will buy the best, or among the best, and seek better monetary value, or value for money. To achieve this objective, they are willing to postpone buying decisions by a few weeks or months till they find better value. They are even willing to forgo the so-called essentials or necessities to save money to buy the products that they desire. Fine dining can go out the window, if the Gucci or Armani remains in sight, and within reach.
A recent book on three decades of Indian reforms highlighted the buying habits of the youngest generation. One of the Gen-Zer was quoted this way: “We believe in global issues like Climate Change and greenhouse effect. Our spending is dictated by new fashion trends and cultural icons.” She added that her clothes may be influenced by neo-street wear or human aesthetics with a ‘gothic grunge’ style. Her make-up may be related to cruelty-free brands, whose imagination and messaging are “humble and subtle.” This is vastly different from the older generations, which are obsessed with high-premium and elite goods, which are either popular globally, like a Merc or Lexus, or seemingly-unattainable, like a private plane. In this sense, money has a more philosophical, rather than physical or immediate, appeal for the youngest generation.