Millennials are over and it’s time to talk about Gen-Z.
In a note to clients on Wednesday, analysts at Goldman Sachs argued that while much has been made of millennials in the media and investment community, it is actually the generation that follows millennials — who are also known as “snake people” — that matters more.
“America’s youngest generation, ‘Gen-Z’ or those born after 1998, are now entering their formative years and rising in influence,” Goldman writes.
The firm adds:
At nearly 70 million in size and growing, the eldest of which are now entering college and/or the workforce, this cohort will soon outnumber their Millennial predecessors. Raised by Gen-X parents during a time marred by economic stress, rising student debt burdens, socio-economic tensions and war overseas, these youths carry a less idealistic, more pragmatic perspective on the world. Born device in-hand, Gen-Z is America’s first generation of true “digital-natives” and they will be America’s most diverse to-date (first to be majority non-white). Over the past several years, educators, employers, researchers, retailers and the like have spent significant time and resources dissecting the Millennial mindset. But the time has already come to focus to Gen-Z, which promises to be just as, if not more, influential.
So I guess that’s it: millennials have had their day in the sun and now it’s over. The more important economic force of tomorrow, it seems, are toddlers with iPhones.
In Goldman’s view, the reason it’s time to move on from millennials is that Gen-Z simply represents a bigger, more important change in the US than millennials ever did.
Gen-Z, for example, will be the most diverse generation to date and as a result, in Goldman’s view, “Gen-Z is not just diverse by a matter of fact, but they also hold a more positive view of the rising ethnic diversity in America than prior generations.”
Diversity for Gen-Z transcends race, gender and sexual orientation. Take fashion, for example, where “normcore” has emerged as one the prominent style trends. Bland, boring, basic and in most cases absent of brand logos, this style leans more towards blending in than standing out. And for Gen-Zers, not relying on a designer brand’s latest fashion trends to establish their identities is exactly the point. For the retailers, this presents a new challenge should this trend hold.
Financially, Goldman thinks Gen-Zers will be a more financial conservative generation, with 46% of Gen-Zers saying in a recent TD Ameritrade survey that they are worried about accruing student loan debt, something that has hamstrung many millennials (who are, in some cases, still stuck in their parents’ house instead of forming new households and starting families).
Millennials, then, were in a lot of ways merely younger versions of their Baby Boomer parents with a little bit more digital fluency and a lot more student debt.
And on top of all this, the simple reason Gen-Z matters more is that they will soon be a bigger generation than millennials.
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