Business Insider and The Daily Beast just posted articles asking if Gen Z could put Facebook out of business. The shortest answer I can provide is simply: yes. And Costco, Target, x/y/z cable company or financial services firm, and anyone else who fails to read the signs. Disruption is on our doorstep -- not tomorrow or even in five years but ten years from now we will be looking at a very different landscape. Whoa, wait: Did I just dare say Target? The darling of retailers who, for so long was the hero to WalMart’s zero when it came to being hip?
If you don’t mind, let me relay an actual quote from my brand-obsessed 12yo son last Saturday: “Go into Adidas and it’s heat. Walk into Target and all you can walk out with are Cat & Jack sweats.” For those lacking a pre-teen in your house this means: Target ain’t cool. After he said it, I came home and a quick Google search revealed that in 2017 Target saw a 2.2% drop in same store sales at brick-and-mortar locations, which it attributed to a decline in customer visits with shoppers picking up fewer items on average. Now, obviously, this decline isn’t 100% attributable to Gen Z (of course it isn’t!) but it is a harbinger of changing consumer preferences – and how quickly tides can turn. Don’t believe me? Just ask Silicon Valley’s favorite power couple, Sandberg and Zuck.
Let’s talk about cable companies next because it’s got disruption written all over it. According to a May 18 report, cable TV subscribers peaked in 2012 and have been on a slow decline, losing 3.4MM subscribers since. Meanwhile, Q4, 2017 saw Netflix add 2MM net subscribers in the U.S. alone. Plus there’s the rise of Hulu, Amazon Prime, and Roku, not to mention streaming services by Showtime and HBO. You know where I’m going: Gen Z doesn’t watch “regular TV” (this is what my kids call it). Instead they binge on YouTube and Netflix so obsessively it makes Nicholas Cage in Leaving Las Vegas look sober. So, rather than hate Reed and Marc for their success, a more productive use of time is to figure out how they did it.
All of this will morph as Gen Z ages – we’ve already discussed their surprisingly (at least to marketer’s) evolving views on privacy. Some of this is no doubt because of parents clamping down out of increasing concern about these kids' digital consumption and resultant digital footprint. When I was 13, you were cool if you had a landline in your room. Now the average age a kid gets a cell phone is 10.3; roughly 55% have their own tablet or computer; and some estimates say they spend up to four hours a day online. In short, all they’ve ever known is interconnectedness to the Internet. They are still children who are vulnerable like every generation, only in their case it’s to the continual presence of technology. They are less likely to physically hang-out with friends; less likely to go out on dates; and less likely to even want that penultimate rite of passage: a driver’s license.
Why is the next decade different than the last? Because Gen Y and Gen Z are the first two cohorts whose haptic memory is of technology, and with Boomers exiting the stage they represent half the population. Put simply, generations are turning over, something that only occurs every quarter century. Which is why it's a good idea to keep a close eye on what's happening, and not fall into the trap that just because you're older means you know everything. Doesn't mean everything old is bad and must be thrown out with the bathwater. Gen Z’s obsession with the 80s/90s (think, Stranger Things) is a good reminder everything old can be new again so long as it's marketed stealthily: you know, in a way that doesn’t make you look like a Try Hard.