The older cohort of Gen-Z – those born roughly from 1997 to 2012 – is now coming of age. Accounting for over 40% of consumers worldwide, Gen-Z are an increasingly financially autonomous demographic, with significant cultural and spending power that is only predicted to grow.
Eschewing traditional media consumption for influencers and algorithmically generated content, this generation of digital natives and their heightened expectations of the corporate world pose a number of unique challenges for brands and how they interact with consumers, other brands, and wider global issues.
Inheritors of a post-recession financial landscape and a critical climate emergency, Gen-Z consumers demand that brands not only do good, but do better. Spending habits are largely underpinned by a collective consciousness around sustainability, inclusivity, and authenticity. For brands, this means taking a panoramic view of the challenges and opportunities presented by a more socially aware consumer base.
‘When thinking about your brand protection plan, think about it in a very holistic manner,’ advises Sally Britton, IP partner and head of brands at Mishcon de Reya.
Britton, who was a brand manager for multinational companies before qualifying as a lawyer, emphasises the importance of sustainable supply chains, suggesting that brands ‘make sure that the right contracts are in place with the right manufacturers, because Gen-Z are looking to engage with the brand on a wider level; not just the name, not just the packaging, but also the way your products are produced.’
One approach Britton cites as ‘a development that particularly aligns to the expectations of Gen-Z consumers’ is becoming B-Corp certified, awarded to participating brands who adhere to the highest standards of social and environmental performance, transparency and accountability.
Striking the balance
In the age of social media and so-called ‘cancel culture’, where a coarsely worded cease-and-desist letter could be viewed by millions at the touch of a ‘post’ button, brands are increasingly considering the optics of how they enforce IP rights or legal action, and balancing those with consumer perception.
‘Historically, it was just about making sure you had the rights and enforcing them,’ explains Julius Stobbs, founder of specialist brands firm, Stobbs IP. ‘Increasingly, the PR we do has become a bigger and bigger issue. There’s a middle ground where it’s important for companies and brand owners to have rights and enforce them, but not to overreach, not to go too far, or crush people for the sake of it.’
Britton agrees. ‘Some brands’ enforcement programmes are literally just seeing a conflict and writing a letter, and it’s a lot more nuanced than that; you can end up alienating the very community that you were trying to create. Increasingly, we’re seeing that where an infringement has taken place, brands are taking the opportunity to see if there might be a collaboration, or another opportunity. They’re turning what could be a potentially negative situation into a positive one.’
But what about smaller, emerging brands that may find their IP rights compromised by a larger company, but without the necessary finances for litigation? ‘There are a lot of things that can be done to protect the interests of these smaller businesses that aren’t necessarily expensive,’ says Stobbs. ‘The problem is, they perhaps haven’t thought about it. [IP rights] need to be something that’s in the minds of any small business when it starts out. There are lots of things that aren’t really about having a lot of money, they’re more about having thought about the process.’
Under the influence
The meteoric rise of the influencer – an individual who earns an income from social media content creation and collaborations with brands – is also important for brands to acknowledge, given that apps such as TikTok and Instagram are now the primary sources of, well, influence, for most Gen-Zers. As brands apportion significant chunks of marketing budgets to paid advertising campaigns with influencers, how can they remain compliant with relevant laws when advertising on social media?
‘There’s been a longstanding principle in advertising law and regulation that consumers need to know when content is advertising,’ explains Brinsley Dresden, partner and head of advertising law at Lewis Silkin. In theory, indicating that content is a paid advertisement should be a fairly painless process, be it including #ad in a caption, or using specially-developed ‘paid promotion’ disclosure tools that platforms like Instagram have introduced.
‘The fact is,’ Dresden continues, ‘there are still many influencers who are not disclosing that the individual post is an ad. Every week the ASA (Advertising Standards Authority) publishes its adjudications, and every week some influencer is being pulled up for breaking the rules. It’s important to give the influencers some guidelines about what’s expected of them, and crucially, what disclosures they must give.’ Of course, contracting with any third party comes with its own unique risks, and influencers are no exception. Indeed, the last half-decade has seen a litany of scandals involving influencers, for example, where problematic social media posts from the past are uncovered and shared widely online. The reputational harm to brands associated with such individuals could be major, but can be tempered by agreeing the right contract terms from the outset.
‘It’s down to how much power you have in the contract,’ notes Dresden. ‘A penny of prevention is worth a pound of cure. If you don’t spend the money on lawyers or others to do the due diligence for you, bear in mind that once you’re contractually committed to the talent, if you then have to pull a campaign because it comes out that they’ve said something racist in the past, for example, the cost of fixing that and the cost of the reputation damage will dwarf what the upfront cost of doing the research and the due diligence would have been.’
As can be seen, there is no silver bullet to win the business of Gen-Z consumers. But, by taking a multilevel approach across social media and business operations, and by meaningfully engaging with this demographic and those who influence them most, brands can prove themselves as responsive and ready to meet the needs and expectations of the next generation, while balancing their own legal and business needs in the process.