Data Privacy & Gen Z: Transparency, Control, and Incentives

It’s easy to make generalizations about the differences between generations–they have different opinions, influences, upbringings, and attitudes. But when it comes to data privacy, it’s not that simple. Views on this issue can vary greatly within and across generations. But new insights show that one generation in particular, Gen Z, has a unique relationship with data privacy that will require companies to rethink how they engage with younger people if they want to create brand loyalty and increase marketing effectiveness.

Gen Z is the first generation to be raised in the 21st century. Because they’ve grown up with technology and the internet as an essential part of their daily lives, Gen Zers are characterized as digital natives. They’ve also come of age during a major shift around data privacy, including the rise of data privacy regulations like GDPR and CCPA/CPRA. They are also much more aware than the average person of large scale data privacy news, like the Facebook/Cambridge Analytica scandal in 2018, and are likely more aware of the potential risks and benefits of sharing data and may take steps to protect their privacy. These combined factors all contribute to how Gen Zers view data privacy.

An independent study commissioned by FreedomPay and Cornell University found that Gen Z is more cautious about data sharing than millennials or baby boomers, making it harder for companies to collect their consumer data. But the study also found that Gen Z is more inclined to give out personal information if there is a reward involved. Specifically, the study found that 69% of Gen Zers prefer cash discounts, while 31% prefer loyalty points.

In addition, research from Morning Consult shows that, regardless of a consumer’s age or generation, transparency and control are the most positive actions companies can take in regard to data protection.

These two concepts – incentives, combined with transparency & control – are central to a privacy-first data economy. If companies can offer mutually beneficial privacy options and data sharing, plus provide incentives and rewards to their customers, both parties benefit. Companies get better data to drive sales and marketing (without violating privacy), and people get control over their data, rewards for engaging, and better user experiences.

With Gen Z comprising nearly 40% of total consumption in the U.S., companies who embrace a privacy-first model with incentives will be better positioned to harness the purchasing power of this generation, while meeting higher expectations for transparency and control for how their data is collected and used.