As a Millennial born in the 80’s, I recall the feeling of running my fingers through the stiff cardboard catalogue at my elementary school library to find the books I needed to complete my homework. By the time I was a teenager, when I was meant to be studying for my final exams, I could usually be found furiously typing away in chatrooms with ‘friends’ in far-off places. The ways to access and share information changed dramatically during the period of my schooling and I embraced it. Not only could I access the collective global knowledge through this new world wide web but I could also contribute to conversations in chatrooms and forums. It gave me a breadth of reach, knowing I could digitally transcend geography.
This transition, from living in an analogue world and having to adapt to the new reality created by the internet, means that I am a digital immigrant. The generation after me, Gen-Z (born 1995-2010), didn’t experience this. They have been nicknamed the iGeneration as they are digital natives having never known the analogue world that the rest of us grew up with. The iGeneration have endless knowledge at their fingertips. They can learn languages on demand through apps or learn to build cars through videos on YouTube. The way and the pace in which they consume information is vastly different. For them the digital world isn’t an extension of reality, it is reality.
What does this digital reality mean for realty? It has everything to do with which trends will change the way we inhabit spaces, and which will fade away. In 2019 Gen-Z became the largest population group globally. The values and expectations of this generation, the first digitally-native one, must be front of mind for the property industry as they are soon to be the main consumer of space. By 2030, 75% of the workforce will consist of Millennials and Gen-Z. Already meeting the needs of Millennial talent has been described as a ‘nuclear arms race’ with property firms looking to out-tech, outfit and out-maneuver their competitors by retrofitting portfolios and looking to flexible-workplace provider. Brokers meanwhile have leveraged social media through Instagram, podcasts and TV shows for publicity. I imagine it won’t be long until we see brokers on TikTok.
A recent survey found that 55% of Gen-Z spent over 5 hours per day on their phone and have a tendency to use multiple screens simultaneously.
While many values of Gen-Z and Millennials are aligned, Gen-Z has far greater engagement with technology than mine. A recent survey found that 55% of Gen-Z spent over 5 hours per day on their phone and have a tendency to use multiple screens simultaneously. While a caveman is commonly depicted holding a club, our Gen-Z hold tight to their phones. If you have a younger relative, you have likely noticed that they tend to live their lives over the top of their devices. For real estate professionals to not engage with apps, video and smartphone technology, simply won’t reach a Gen-Z audience.
Interestingly, while the internet has become the main way that Gen-Zer’s experience the world, they have also gained an increased appreciation for personal meetings. Dr. Kent Wessinger conducts global research on the behavioral patterns of Millennials. He found that only 2% of Millennials felt that face-to-face meetings were effective, while a recent poll indicated that Gen-Z has a strong preference for face-to-face meetings. As such, we can expect to see platforms such as Zoom or FaceTime playing an increasing role at work, replacing email and instant messaging which had been so lovingly embraced by us Millennials. This will hold especially true for real estate transactions where face-to-face communication is particularly important to establish trust, and you can say goodbye to those in person meetings. Workspaces should be designed to accommodate more video calls and cultivate intimate communication.
In Dr. Wessinger’s research 81% of Millennials indicated that content on podcasts, YouTube, and email were the channels of communication that stimulated their purchasing decisions. Gen-Z also use social media as a way to research important decisions and most review at least three sources before making a purchase decision, most often turning to YouTube for product reviews. “The real estate sector cannot ignore the fact that video dominates communication, more than 80% of internet traffic will be video by 2022. Gen Z seeks ‘learn more’ accessibility and seek frictionless access to information in decision-making” says Marcia Favale, CEO of Blingby, an interactive technology using video.
Facebook is passé, Snapchat is on the downfall, and Instagram is currently the most popular social media platform for Gen-Z according to a recent Business Insider survey. Social media is ingrained into the lives of Gen-Z and propagating their virtual identity is as important as their real person. Their awareness around privacy concerns has them flicking over from features where they can share publish personal content such as Facebook profiles, to sharing Instagram Stories to their closed group of connections that disappear into the abyss after a few hours.
Much like they can purchase a ‘skin’ on popular game Fortnight or purchase players on e-sport games for their virtual team, Gen-Z come from a mindset where they willingly pay for additional add-on features.
Gen-Z is used to having a two-way dialogue and want to be involved in the co-creation of the products they consume with the expectation extending through to real estate. “Having a branded office that customizes your employee capacity and buildout requirements are the new norm, not a ‘nice to have,’” shared Melissa Libner, Knotel’s Head of Marketing – East. Much like they can purchase a ‘skin’ on popular game Fortnight or purchase players on e-sport games for their virtual team, Gen-Z come from a mindset where they willingly pay for additional add-on features. As such, the future workspace might include options to ‘purchase’ the experience of using a luxury designer chair for a day, or a ten-minute massage for a nominal amount or credit. The way that this might be included in a lease agreement through a building’s shared amenity offering is interesting to contemplate. The impact on broker agreements, even more interesting.
While the way that commercial real estate is marketed, designed and delivered has adapted well to the requirements of the Millennial workforce, to engage Gen-Z will take a momentous push. As the digital experience becomes an indisputable expectation, advancements like digital twins is only the tip of the iceberg. The physical environments will be controlled by smart phones and smart technologies. Written communication through apps, emails and text messages will be phased out, with natural forms of communication like speech, hand gestures and facial expressions reintroduced over virtual channels. Interaction between real estate brands and their Gen-Z customers will be a two-way dialogue as Gen-Z want to be more involved in shaping their experience.
Gen-Z’s empathetic outlook and real concern around climate change was epitomized by 2019’s Time Person of the Year and Gen-Z spokesperson Greta Thungberg. Sustainability must be ingrained in both the lifecycle of buildings and a real estate company’s governance. Fifth Wall’s recently announced $200 Million Carbon Impact Fund addresses this need well. Both this generation’s expectations and legislation like The Green New Deal will require buildings to be more ‘woke’ around their ecological impact. Only by taking the time to strategize on how they will meet the expectations of what will be the most influential generation by 2030 will real estate companies be able to reach a growing demographic and not run the risk of isolating an entire generation of customers.
Copyright Nikki Greenberg. All rights reserved.