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There’s a generation below millennials and here’s what they want from brands

The obsession with millennials and what they want will soon be replaced by a new, younger and maybe trickier set of customers: Generation Z.

These 13- to 24-year-olds, who make up 71.7 million of the U.S. population, have a message for the world: They're not millennials and they really don't like corporations very much.

Take this statement, by one of 1,000 girls and women surveyed by consultancy Irregular Labs for a new report: "My numero uno message to brands that try too hard with the things that a 40-year-old thinks we would like is: When designing a product or creating an ad, if you think 'oh that's perfect for Gen Z' — that means it's probably a millennial idea and a straight path to failure. We are different."

A woman wears a Gucci handbag at London Fashion Week in February 2018
Edward Berthelot | Getty Images
A woman wears a Gucci handbag at London Fashion Week in February 2018

Here's another thought, from a teen entrepreneur: "As somebody running a magazine, I have to be a bit of a double agent, speaking Gen Z but also corporation (speak) because we need money to run things, so we have to milk the cow. I mean it's a cow, it has no brain."

Faith in companies is a big issue for this group, with 43 percent trusting long-established brands. But corporates better tread carefully, according to one respondent. "Nobody's going to buy a product from a corporation who you know is just out for the money, unless you see them doing good stuff (even if only for the sole purpose of winning trust)," she said.

The report, authored by consultancy Irregular Labs, surveyed 500 13- to-24-year-old females online last October and did in-depth interviews with 500 more. Girls, women and gender non-conforming people only were surveyed because they are currently underrepresented in politics and the media, said report editor Molly Logan, even though they often decide on household budgets are spent (they control 51 percent of personal wealth in the U.S., according to the BMO Wealth Institute,)

"We think that political organizations, brands and non-profits need to need to know what they think," Logan said in an email to CNBC.

Be an authentic brand

A buzzword with Generation Z is 'authenticity,' (a concept that is popular in leadership too), with 67 percent of those surveyed agreeing that "being true to their values and beliefs makes a person cool." But they're not so keen on celebrities: only 19 percent admire something or someone because they have a mass following.

"Gen Z craves a personal, authentic connection. We grew up watching and interacting with YouTube stars who were just like us, not elusive, Hollywood celebrities. As such, we appreciate the chance to engage with authentic, imperfect art," is one way of summing up how this generation feels.

Source: Glossier

Beauty brand Glossier, a firm that closed on a $52 million funding round in February, is one such company that gets it right, suggests the Irregular Labs report. It used "real" women with a range of body shapes to advertise its Body Hero wash and lotion, photographing them in the nude and featuring them on billboards in Los Angeles and New York City. But before the big ad campaigns, it built its brand on Instagram, with founder Emily Weiss using it to ask followers what they thought of logos and packaging.

Social status

Instagram is one way to find out how the older and younger groups represent themselves. Yes, they are quite vain, the report concedes, but Generation Z is much more "real" than millennials, posting less-than-flattering selfies and relying on sassy picture captions over posed pictures and emojis.

Only 15 percent of those surveyed are keen to have "a ton" of followers on social media sites and they relate to quality over quantity when it comes to brand partnerships with influencers.

"We'd rather see companies supporting homegrown heroes than industry giants," wrote one 16 year-old. Think New York artist Molly Soda (one of her Instagram posts is below) over a celebrity such as Selina Gomez. "Whereas someone like Selena Gomez clearly has a team of people polishing her image and making her life look perfect, online personalities are allowed to be candid about their personal issues, making them a lot more relatable," she added.

This group may be particularly hard for brands to reach because 75 percent claim they do not follow the latest trends. "The key is to know your brand and evolve accordingly. Quick about-faces and trend-chasing will be seen for what they are," writes report author Logan. Generation Z are fans of companies that are reliable as well as creative, such as Converse, Starbucks and sneaker company Vans. High-end brands should take note: 25 percent of this group is saving up to buy a luxury product, and they like Gucci over Coach.

And the generation claims to scrutinize marketing. "If your marketing makes statements in support of gender equality, make sure you have the corporate culture to back that up," Logan adds.

Brands, be warned.