We millennials get blamed for a lot. We’re all apparently lazy, entitled, and the killer of a ton of products and industries. These include retail stores, letters, home phones, even the housing market. But our time has now passed, and there’s a new generation to start putting the blame on: Generation Z.
Millennials are also known as Generation Y, and the next group to come up the ranks is Gen Z — anyone born between 1997 and 2012. The big news is that a lot of these people are starting to come to an age when they really do a number on the economy. This group currently makes up about one-fifth of the United States’s population and is the most racially and ethnically diverse group of people in that nation’s history. So, honestly, it’s time industries started paying attention.
It shouldn’t come as a surprise then that there is one place businesses should go to find out more about Gen Z, and that’s online. This group doesn’t know a time when the internet didn’t exist, and most of them won’t remember a time that the internet wasn’t readily available in their own homes. In fact, that annoying phase where you had to hang up the phone to go online is likely news to them.
As the e-commerce business continues to grow and thrive, this is the generation that businesses will turn to. After all, Gen Z influences about 70% of their family’s spending. Considering many — if not most — still live at home, this is a number to pay attention to. That influence can bring in billions of dollars in spending for the industry that listens.
But while many might assume that the young like to spend, it’s not the case with this generation. Researchers have found that Gen Z are actually opposed to taking risks, and it influences spending habits. This could be bad for businesses moving forward, as each will have to find a way to make this incredibly influential group spend money.
One area where this could happen quickly is with retail stores, especially those such as Hudson’s Bay (TSX:HBC), which is already struggling. The company could be going private soon as a last-ditch effort to save the stock, as it continues to close retail stores. Hudson’s Bay has been moving to focus on an online presence, where sales have remained relatively strong, and away from its retail stores that cost a fortune to operate.
While this would be a strong move by Hudson’s Bay, with many analysts believing the company needs to go private to save its stock, it might not matter for Gen Z. Hudson’s Bay is old and doesn’t have a lot of influence with a younger population. If this company can’t start gaining interest, especially online, then it might go the way of the dodo bird.
What it does have are Bay Days. Gen Z, with their cheaper spending habits, will likely love seeking out discounts on some big brand-name items. As they start going to university and buying apartments and even houses, Hudson’s Bay could do well to continue these sales to keep them coming back.
Meanwhile, there is one titan of industry that should continue to take advantage of Gen Z, and that’s Shopify (TSX:SHOP)(NYSE:SHOP). Shopify and Gen Z are both the faces of the future, and Gen Z will love how they can easily buy and receive products all over the continent from anywhere between multi-billion-dollar enterprises and a mom-and-pop side project. Each has the same access to Shopify, and each has the same access to this generation.
This means Shopify is likely only in the beginning of its influence, as is Gen Z. For those looking to take advantage of where this group is headed, I would highly recommend investing in a stock like Shopify if it comes down. That could be a while, as the company continues to pump out increases in revenue and grow at an exponential rate.
Fool contributor Amy Legate-Wolfe owns shares of Shopify. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of Shopify and Shopify. Shopify is a recommendation of Stock Advisor Canada.
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