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Gen Z’s loyalty (and their spending) matters

Members of Gen Z – those born after 1997 – are demanding that the companies and brands they choose reflect these values.

Before life could even throw the first lemon, Amanda Belzowski was making lemonade for charity.

As a rosy-cheeked infant, she drew crowds to a lemonade stand set up by her mother to raise funds for pediatric heart health. As soon as she could pour a glass herself, she enthusiastically took over all duties. Now 17, Amanda has proved her business smarts and philanthropic mettle, raising nearly $200,000 for heart health and earning a nod as one of Plan Canada's Top 20 Under 20.

While the Toronto teen's résumé may stand out among her Generation Z peers, Amanda represents her cohort's increasingly entrepreneurial spirit, engagement with the world and focus on social and environmental responsibility.

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Even more than their millennial predecessors, members of Gen Z – those born after 1997 – are demanding that the companies and brands they choose reflect these values.

"What's huge among people my age is how environmentally conscious these companies are," the Grade 12 student says. "[So] when you're going to buy a shirt, you're thinking, 'Why am I buying this? What's the purpose?'"

Canadian companies that want to capture the loyalty and purchasing power of Amanda's generation are starting to respond. According to market research, brands popular among today's young people have built an extensive charitable platform, are exhibiting more transparency, and, perhaps most importantly, are transmitting their message to these digital natives through their main channel of communication: smartphones.

Free the Children co-founder Marc Kielburger highlights what a handful of Canadian companies are doing to get it right.

"We find that when companies are genuine in their outreach, strategic in their engagement and are able to communicate impact, they've become extremely popular with the young demographic," he says.

Kielburger singles out Vancouver-based telecommunications company Telus Corp. as a leader of the pack.

Telus was named the most outstanding philanthropic company in 2010 by the Association of Fundraising Professionals, Kielburger says, noting that Free the Children has teamed with the company's mobile division to create We365, an app that helps kids track their volunteer hours, reward philanthropic work and serve as a hub for like-minded young altruists.

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It doesn't hurt that the company uses adorable animals – the catnip of social media marketing – to great effect in its ads.

"They've been able to create a high degree of relevancy this way," he says.

Healthy living is another key concern among young people, says Kielburger, which had made Toronto-based Freshii Inc., a fast-food franchise that specializes in nutritious meals and sustainable packaging, extremely popular with the high-school and university crowd.

Smart corporations are also using social media to propel their outreach strategies. This month, Royal Bank of Canada rented ice-cream trucks to hand out free frozen treats to Greater Toronto Area students. The bank hoped happy recipients would use their sticky fingers to tweet about the sugary windfall by using the hashtag #rbcstudenttreats. The ploy worked and #rbcstudenttreats wound up trending on Twitter.

But it's not just a matter of selling product. Businesses must adapt their workplace culture to attract the next wave of top-tier talent, recent graduates that may just as willingly strike out on their own.

Leerom Segal, Klick Health co-founder and chief executive officer, understands this concept better than most.

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The Toronto-based entrepreneur has helped to shape an environment that often gets singled out as one of Canada's top places to work.

While his company is certainly heavy on the perks – a squash court, free Starbucks coffee and a concierge service that provides everything from grocery to dry cleaning pickup are just the beginning – Segal intuited that an open, democratic system of communication would be key to making employees feel valued and empowered.

Klick employees use Genome, an online operating system that serves as a hub for the entire company. On Genome, employees mark their progress on projects, give "kudos" to a co-worker for a job well done, and publicly contribute to Klick It Forward, the agency's charitable initiative.

They're also encouraged to speak up if they don't like something and post their thoughts on Genome. Thanks to the Internet's democratization of opinion, Gen Z is growing up with the belief that their opinion matters. It's an idea Segal encourages.

"A lot of leaders like these things conceptually but the first time something bad is posted about them or they don't agree with one of the comments or ideas they end up pushing back and that completely undermines the power of all these new tools and this new approach," he says.

It's also getting tougher to fool kids these days. Increased business literacy among young people, thanks to both interest and access to information, has made it difficult for companies to get away with what is seen as irresponsible practice, particularly when these practices impact struggling economies across the globe.

Canadian retailer Joe Fresh received an unwelcome taste of this backlash last year after the deadly collapse of a Bangladeshi garment factory where some of their clothes are manufactured.

Today's teens are growing up with an elevated sense of responsibility to the world and have the available tools to take effective action, says Ande Baweja, president of AIESEC Edmonton, a global youth leadership group, noting these kids will be the future corporate leaders that effect real change on a global level because the values they hold have always formed a part of their consciousness.

Ethical consumerism

If there's one thing post-millennials understand better than their generational predecessors, it's that the power to create change resides in their wallets.

Impact, the youth program run by insurance company Co-operators, cites Canada as the world leader in ethical consumerism, a trend driven in large part by the efforts of today's young people making ethical purchasing decisions.

"Frequently that means products that are environmentally conscious, low-impact, that are socially conscious such as fair-trade products," says Matthew Johnson, director of education at MediaSmarts, an agency that researches how young people engage with the Internet.

Johnson says there's mixed evidence as to whether they follow through on these purchases consistently, but they're receiving considerable reinforcement from the celebrity world, with Canadian actors such as Pretty Little Liars star Shay Mitchell and New Girl's Hannah Simone extolling the virtues of smart consumerism.

Simone, a former model and MuchMusic veejay, recognizes her influence on her young fans and feels it's important to make responsible and impactful choices.

"Celebrities are given an incredible platform to speak about the issues they care about – our fashion choices can create awareness and attention for a brand that is socially conscious versus one that isn't," Simone writes in an e-mail.

"Making conscious choices about where we spend our dollars can impact change – if we want products that are kinder to the planet and ensure fair treatment of those who create them, we need to make our choices known."

Whether the drive toward smart consumerism remains a trend or becomes part of the future economic landscape, savvy Canadian companies recognize that spending bit more to ensure ethical and responsible standards is an investment they can't afford to forgoe.

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