3 ways Gen-Z is empowering a digital economy
In partnership with Oxford Economics, Snapchat recently set out to explore the role of Gen Z in driving the post-pandemic recovery, digital economy, and their impact in marketing efforts and what this means for the industry at large.
We’ll take a closer look at some of the themes and trends unveiled by the findings, but amongst the key pieces of information in the report include:
- Gen Z will support $3.1 trillion of spending by 2030 across six key markets studied: Australia, France, Germany, the Netherlands, the United Kingdom and the United States
- The global AR market is projected to expand four-fold by 2023
- Technology and COVID-19 are set to transform skills demand, with the majority of jobs to require advanced digital skills
- A greater emphasis for the future workforce will be put on skills such as agility, curiosity, creativity, critical thinking and problem solving playing into Gen Z’s natural strengths
The engines of consumer spending
Gen Z is set to emerge as an independent and powerful source of consumer spending. While most of this cohort are on the periphery of the labor market given their age, this is set to change drastically in the coming years. Specifically, their consumer spending will increase more than six-fold, from $467 billion in 2019 to $3 trillion in 2030, equivalent to 11 percent of total household spending. Further, Gen Z’s share of total employment will rise noticeably from a mere 10 percent in 2019 to 30 percent in 2030.
Beyond digital competence, Snapchat highlighted several key characteristics that will set Gen Z-ers up for success in workforce. These include agility through absorbing information quickly and responding to new challenges with an open and innovative mindset. They’re also more creative and compared to their older cohorts and very curious to engage in forms of communication and content creation including AR, emojis, lenses and filters.
The evolving market
It’s no secret that COVID-19 will act as a significant disruptor, accelerating shifts towards a more digital society and fundamental changes that will transform our world of work.
One of the fastest-growing technologies many have their eyes on is AR. Outlined in Snapchat’s report, it is estimated that the global AR market revenue nearly quadrupled between 2018 and 2020. The next three years are expected to be marked by a similar trend with estimates projecting a 10x increase by 2023 from 2018. Stats aside, what is key to note is that AR’s characteristics pave the path for a significant demand in digital skills comparable to that seen in 2010 with the rise of social media platforms.
Allowing new forms of expression, entertainment, utility and information-gathering it is not only essential to how brands attract attention and connect emotionally at scale, but the technology is facilitating immersive experiences that are redefining retail and online beauty. According to research by Shopify, interactions with AR/3D garnered nearly 94 percent more conversion to sales compared to non-AR channels. Outside of marketing and e-commerce AR will continue to transform how we experience healthcare, education, architecture, entertainment and manufacturing.
The future of learning and re-skilling for a dynamic workforce
While the disruption to formal education amongst Gen Z is a key concern following 2020, the impact on their labor market prospects remains uncertain. To put the rise of online learning into context, platforms such as Coursera and edX enrolled over 180 million students in courses in 2020, up by 1,000 percent compared to five years earlier. As we face increased reliance on remote working, Snapchat’s analysis points to Gen Z’s higher digital competence as largely supportive to their adaptation to this new way of working.
Additionally, in common with all recessions, the pandemic is set to accelerate a new wave of automation driving demand for creativity and curiosity in the workplace—two of the inherent traits of Gen Z mentioned earlier. With this, the increased importance of lifelong learning is set to rise with workers required to adapt to more rapidly evolving demands. This involves picking up new technologies and software to spur new ways of doing business, respond to the structural changes and challenges, and re-skill in a dynamic workforce that will set the tone for the 2020s.