As of 2025, Generation Z is not merely shaping the future of consumption, they are defining it with bold, unapologetic clarity. Their spending power is projected to reach an astonishing £9.5 trillion globally by 2030, marking this digitally native cohort as a transformative force in commerce.

For SMEs, grasping Gen Z’s distinct expectations is no longer optional, it is essential for survival. In 2025, their influence shines through trends like using social media as search engines, valuing authenticity over polished ads, and insisting on transparency in brand values. Brands that ignore this shift risk fading into obscurity in a market where Gen Z’s voice echoes loudest.

Why Authenticity Isn’t Optional

In 2025, authenticity stands as the non-negotiable entry fee for brands aiming to capture Gen Z’s attention. Traditional marketing is losing its grip as this generation turns to TikTok and Instagram, using them as primary search tools for products and services. A 2024 survey found that 47% of Gen Z views brands promoting unrelated causes as mere marketing gimmicks, instead craving a genuine alignment of words and actions.

To win their trust, brands should spotlight user-generated content and real customer stories. Gen Z seeks genuine connections and rewarding brands that showcase authentic users with greater loyalty. Take Hinge and Rare Beauty, for instance, which leverage platforms like Substack to share unfiltered narratives, building relatability and trust. Micro-influencers, with their engaged niche followings, outshine celebrities in swaying Gen Z’s choices. Over the next five years, their influence is set to soar as this generation prizes relatability above all.

Diversity: More Than Just Representation

For Gen Z, diversity and inclusion are not optional extras; they are fundamental expectations woven into 2025’s cultural fabric. A striking 68% of Gen Z workers are dissatisfied with their employer’s DEI efforts, and 56% would decline job offers lacking diverse leadership. This mindset shapes their brand preferences too. They see diversity as a core business pillar, expecting representation across body types, ethnicities, abilities, and gender identities in marketing, operations, and leadership.

In the U.S., 30% of Gen Z link DEI to mental health and workplace culture, making it a priority. SMEs can rise to this by embedding diversity into hiring, supply chains, and community outreach, starting with small, impactful steps like diverse decision-making teams. This is not just optics, it is a commitment to reflect the world Gen Z inhabits.

Social Impact: Walking the Talk

Gen Z demands brands take bold stands on social and environmental issues, embedding these values into their DNA. The last few years have seen an increase in rallying behind companies tackling climate change, mental health, and social justice, wielding their economic might to support aligned brands. Yet, they are swift to expose greenwashing or hollow promises.

Trust hinges on transparency and action. A 2025 report notes 67% of Gen Z feel satisfied with brands whose societal impact feels real. SMEs can begin with sustainable practices, like eco-friendly packaging, and share progress through impact reports. Frameworks like Theory of Change or Social Return on Investment help measure efforts in areas Gen Z values, or equity, safety, and sustainability. Regular metrics and community involvement amplify credibility.

Actionable Strategies for SMEs

Gen Z craves raw storytelling over slick ads, favouring brands that share authentic, behind-the-scenes glimpses. Patagonia’s bold “Don’t Buy This Jacket” campaign exemplifies this, prioritising values over profit. SMEs should embrace imperfection and real voices to connect.

Micro-influencers reign supreme in 2025, with 61% of Gen Z preferring brands to partner with relatable creators. Long-term collaborations on platforms like TikTok, measured by sentiment rather than sales, drive authentic engagement. Diversity must permeate operations too; audit supply chains and leadership for inclusivity, taking cues from Glossier’s community-led approach.

Taking a stand requires substance. Gen Z expects sustained commitment to social justice, as seen with Ben & Jerry’s advocacy. Video content, from short-form TikTok clips to podcasts, also captivates them. Building communities through forums or eco-workshops fosters loyalty, while AI-driven personalisation, balanced with privacy, seals the deal.

The Gen Z Revolution: Brands Must Adapt or Fade

Gen Z is not waiting for the future; they are sculpting it now, wielding £9.5 trillion in spending power by 2030. This fearless generation demands authenticity, diversity, and impact, challenging brands to evolve or vanish. Unlike Millennials, who exhibit 73% brand loyalty shaped by economic instability and a focus on quality and reputation, Gen Z, with 66% loyalty, prioritises transparency and social good, readily switching to ethical brands that align with their values. While both generations value authenticity, their approaches diverge: Millennials lean on storytelling and brand narratives, whereas Gen Z trusts peer recommendations over traditional ads, seeking tangible value and social impact.

This distinction is critical for brands moving forward. To thrive, companies must blend the reliability that resonates with Millennials with the purpose-driven ethos Gen Z demands. SMEs, with their agility, can outpace larger competitors by forging genuine, purpose-rooted connections. The time is now to embrace realness, champion inclusivity, prove your impact, and harness technology to connect authentically. As Gen Z’s influence intensifies, brands that build community and live their values will lead the way. They are watching. Will you lead or linger?

For more focused insights, strategic commentary, and deeper analysis on current and developing trends, including demographics and generational shifts, follow NorthStar and The Pulse your go-to sources for navigating SME growth and innovation.