Gen Z shoppers are “significantly more likely” to pay a premium for brands that “aim for sustainability and inclusivity” compared to older generations, reveals new university-funded research.
The study was carried out by Vlerick Business School and Ghent University, analysing responses from 24,798 individuals across 20 countries and various demographics.
It also found that members of the younger generation are more willing to pay for exclusive, on-trend products – indicating a unique consumer profile that values both ethical practices and exclusivity.
Significantly, participants in the UK were among the least inclined in the world to pay more for goods made by brands with sustainable and inclusive values.
Meanwhile, women demonstrated a higher willingness to pay for such brands but a lower willingness to pay for exclusive, on-trend alternatives, compared to men.
Professor Frank Goedertier at Vlerick Business School, who led the research, comments: “Traditionally, many companies have invested in creating brands that are perceived as ‘exclusive’ or trendy, luxurious, high-status. A core motivation for this is that there is the conviction that such brands trigger a high willingness to pay a premium. We wanted to find out whether positioning a brand around ‘inclusivity’ and a commitment to be sustainable and contribute positively to society, could nowadays also trigger such a consumer willingness to pay a premium, especially when targeting new generation Gen Z consumers.
“Our findings can help businesses and marketers optimise their brand positioning strategies. For companies aiming to attract the Gen Z market, the traditional focus on exclusivity alone may not suffice for engaging Gen Z consumers, who are also drawn to brands that make a positive impact and promote inclusivity across various demographics. Similarly, companies with a large female consumer base may benefit from emphasising more sustainability and ethical practices in their branding strategies.”