3 Popular Gen Z Niche Verticals
As Gen Z’s purchasing power increases globally, their spending habits reveal specific market verticals of engagement. These areas are primarily CoffeeTech (a sub-category of FoodTech), Wearables (a subcategory of IoT), and what I like to call Simplified FinTech (or SimpleFin). In this article, I’ll give a brief overview of each industry, and its appeal to Gen Z. We can expect the popularity of these verticals to grow with time as Gen Z ages, and as Gen Alpha begins to interact in the digital economy.
1. CoffeeTech Gen Z is crazy about coffee. I’m not just talking about burnt Starbucks. I’m talking about forking over their hard earned dollars for expensive coffee brewed via sustainable technological methods, IoT devices like Ember which adjust mug temperature to always ensure warm sips, and Smart brewing machines, and the like. As a result of Gen Z’s popularization of perfecting the technology of coffee crafting, the speciality coffee market is expected to reach a whopping $83.5B by 2025. An example of a boom that was started by Gen Z is the widespread rise to fame of Cold Brew drinks. According to Grand View Research, “The global cold brew coffee market size was valued at USD 339.7 million in 2018 and is expected to register a CAGR of 25.1% from 2019 to 2025.” I don’t know about you, but that’s A LOT of coffee! We will definitely only be experiencing upward momentum and growth in this market thanks to Gen Z. 2. Wearables Within the IoT category, wearables are a Gen Z must. As per Intelligence Insider, “Gen Z is the fastest-growing generation among smart wearable users.” This is due to the fact that Gen Z actively seeks ways to optimize their lifestyle. Because of the ease of usage of wearables, and Gen Z’s tech-savvy ways, it is only natural that wearables have become an attractive feature and inseparable factor of their daily routine. As per Grand View Research, “The global wearable technology market size was valued at USD 32.63 billion in 2019 and is projected to expand at a compound annual growth rate (CAGR) of 15.9% from 2020 to 2027.” Wearables will continue to become adopted by older generations with their popularization thanks to Gen Z. 3. SimpleFin Within banking, there are some interesting statistics to point out about Gen Z. According to some surveys done by Manole Capital Management, “80% of respondents said that they are using a major national bank and 20% were with smaller financial institutions. Over half, 55% of our Gen-Z survey, would open a bank account with a financial institution with no physical branches. We asked respondents if they use their online banking services and we received an almost unanimous "YES" response, at 96%.” Gen Z has undoubtedly shown tremendous support for fully digital banking solutions. However, Gen Z also happens to be the least educated generation about banking, which technically makes sense as youngsters don’t deal with as much capital flow, and therefore do not know how the financial services sector works. We can expect to see an increase in demand for virtual financial assistants and on-demand AI agents that can simply walk Gen Z through processes like applying for Credit Cards or doing taxes – hence alluding to the simplification of FinTech or “SimpleFin”. To wrap it up, Gen Z’s top 3 verticals are CoffeeTech, Wearables, and SimpleFin. Overtime, it will be exciting to see how these niche markets evolve and grow.