As political polarization grows, the term snowflakes has widely been used to criticize people that are sensitive, easily offended, and young. 

But Generation Z members arent bothered by it.

A study by U.S. consulting firm Oliver Wyman found that not only are Gen Z (those born between 1997 and 2012) well aware that their generation is often negatively stereotyped as easily bruised, lazy, and entitledthey see themselves in an entirely different, or rather positive, light. 

Having grown up witnessing school shootings, their parents coping during the financial crisis, and most recently living through a pandemic, Gen Zers think of themselves as realistic, resilient, and unsentimental.

And the researchers agree. The reportwhich studied the generation over a two-year period and surveyed 10,000 young adults in the U.K and the States, as well as monthly consumer surveys of over 150,000 people in 10 countriescrowned Gen Z as the most resilient generation so far, as a result of having seen too much tragedy in their short lives.

Its why GenZ has become a generation of activists that are fighting for social and environmental justice which is exactly what they are often criticized as snowflakes for.

Haters say theyre snowflakes and dont work as hard as us. Theyre missing the point: Gen Zers are just acting their wage, notes the A-Gen-Z report. 

Having seen how their parents financially struggled through the 2008 crash and the recent pandemic, Gen Zers prioritize security and stability above all else, when it comes to finance. 

At the same time, they dont want to be another cog in the machine. After witnessing their siblings struggle with student debt and their parents work slavishly before getting laid off, Gen Z has taken note and is resisting the status quo. 

They have no interest in unrewarding, low-paying jobs that are damaging to the planet. And with higher college enrollment rates and stability from the bank of mom and dad, Gen Z have no shortage of options in a tight labor market. 

3 ways employers can win over GenZ workers

Whether leaders think of Gen Z as snowflakes or resilient, its clear that businesses will need to win them over sooner rather than later: The generation represents 25% of the worlds population, over $7 trillion in purchasing influence, and will comprise 27% of the workforce by 2025.

And the incoming workforce isnt afraid to walk out on employers (or rat them out on Tiktok) if they dont align with their values. 

1. Offer more opportunities related to social impact. 

According to the report, nearly two in five Gen Z workers say having professional opportunities to affect critical issues makes them more engaged in their workplace. It suggests businesses should encourage employees to take up volunteering opportunities at a social impact-related organization of their choicewhile still paying them. 

2. Consider naming a chief purpose officer. 

Move over chief people officers and chief product officers, theres a new CPO in town as a growing number of businesses install a dedicated C-suite leader to oversee purpose and sustainability. Its a move that Gen Z approves of according to the report. Purpose-driven companies have experienced higher market share and growth than their competitors, it adds. 

3. Embrace their individualism 

When it comes to identity, Gen Z defies all labels. According to the report, this generation embraces spirituality, but is not religious; they dont want to define their relationships; and they embrace gender fluidity.

For employers, addressing the evolving perceptions around identity presents more than including pronouns in email signatures. Gen Z workers want their employers to embrace the changing norms and amend their policies and practices accordingly, according to the report. Gen Zers want employers to be on the same page as they are about bathrooms and pronouns, in the office and elsewhere. Gen Zers want inclusivity to be so normalized that no one needs to discuss it, the report adds.

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Companies have to think very carefully and very strategically about how they approach pricing strategy, EY Parthenon Chief Economist Gregory Daco tells me. Were no longer in the 2021 or 2022 environment where demand was quite robust and companies were being rewarded for exercising pricing power because everybody was doing so.

Procter & Gamble (P&G), the maker of consumer goods like Tide, Pampers, and Charmin, has a strategy to offset higher material costs and supplier inflation by continuing price hikes and showing product innovation. Prices across categories increased by 10%, but sales volume decreased by 6% from the year prior, according to the latest earnings report for the period ending Dec. 31. More price increases will go into effect in February, Andre Schulten, CFO at P&G, said on the Jan. 19 earnings call. The drop in sales volume was consumption-driven, and the other half was due to inventory reductions in China and Russia, Schulten said. P&G net sales for the quarter ($20.77 billion) were down 1%, but surpassing analysts average projections of $20.73 billion. The higher pricing resulted in organic revenues increasing by 5%.

Regarding product innovation, P&G chairman, president, and CEO Jon Moeller pointed to Dawn Powerwash dish spray. The product creates suds inside the spray chamber, letting you apply those directly to the dishes. Compared to non-ultra Dawn, the company claims Powerwash is five times faster at cutting through grease. Powerwash hit the market in January 2020. It was at a premium price, Moeller said on the earnings call. The brand has grown at 50% since that introduction, and Dawn has driven 90% of category growth in that situation, he said. Weve got a lot of innovation coming.

Meanwhile, in 2022, Chipotle Mexican Grill, Inc. (CMG) increased menu prices three times. Thats due to factors such as inflation in ingredient costs, wage inflation, and energy prices, CFO Jack Hartung told me late last year. When we look at our menu prices compared to competitors, were still a terrific value, Hartung said. Our food cost and our people cost are by far the largest items on the P&L, he said. We dont want to cut back on our food. Weve never tried to reduce the quality of our fresh ingredients. We want to invest more in food and our people.

Chipotles total revenue increased 13.7% to $2.2 billion in Q3 2022. In-restaurant sales rose 22.1% year-over-year. However, thats less than the second quarter, when in-restaurant sales increased 35.9% compared to the year prior. During our talk, Hartung told me that in Q4, prices could increase 15% year over year until it drops down to 11% in the first quarter of 2023. Chipotles Q4 earnings are scheduled to be released on Feb. 7. On Oct. 25 (when Q3 earnings were announced) CMG closed at $1,584.02. It closed at $1,555.19 on Jan. 20. 

Then theres Disney. Under returning CEO Robert Iger, The Walt Disney Company is trying to get back into the good graces of loyal customers by reversing some park-related fees from former CEO Bob Chapeks era. However, theyre not exactly lowering ticket prices across the board. 

Disneys parks chief, Josh DAmaro, said in a blog post on Jan. 10 that customers of Disneyland resort in Anaheim will have greater access to the lowest priced ticketsnearly two months worth of $104 park ticket dates. After a price increase in October, a one-day Disneyland ticket now ranges from $104 to $179, based on the day. Other perks include, beginning on Feb. 4, customers can access photos taken at rides for free instead of paying for a photo pass. 

At Disney World Resort in Orlando, guests with annual passes are now able to enter the parks after 2 p.m. without first securing a reservation. (With the exception of weekends at the Magic Kingdom park.) Overnight self-parking will once again be complimentary to guests staying at Disney resort hotels. Guests buying the Disney Genie+ service will also get digital downloads of their attraction photos. 

While this doesnt address everyones feedback, these changes will increase flexibility and add value to our guests experience, DAmaro said in the blog post. Disneys latest earnings report is scheduled for Feb. 8.

In order to create the most effective price strategy, every company has to evaluate its market position, brand position, and client base, Daco says. Theres no one formula for every company, he says.

See you tomorrow.

Sheryl Estrada
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Big deal

Betting that high inflation would continue to deteriorate demand, short sellers stuck with consumer discretionary (non-essential goods) stocks throughout 2022, according to the latest S&P Global Market Intelligence data. Short interest in consumer discretionary stocks on all major U.S. exchanges ended 2022 at 5.01%. It was the most-shorted sector throughout the year, the report found. Short interest, which measures the percentage of outstanding shares held by short sellers, averaged 2.25% for the S&P 500 at the end of 2022.

Going deeper

"A Simple Intervention That Can Reduce Turnover," a new report in Wharton's business journal highlights research co-authored by a Wharton management professor, Maurice Schweitzer, that finds overloading workers with too many difficult tasks in a row makes them more likely to quit.

Leaderboard

Tim LaLonde was named CFO at Evercore (NYSE: EVR), effective March 6. LaLonde will succeed Celeste Mellet, who is leaving Evercore in early February to pursue a different area of finance. LaLonde joined the firm in 2001 and currently serves as co-head of the U.S. advisory business and holds several other global senior leadership roles around the firm. In his new role, LaLonde will oversee Evercores financial, tax, internal audit, investor relations, information technology, and facilities functions and will also continue to serve as a member of Evercores management committee.

Ernest (Ernie) De Paolantonio will step down from his role as CFO of Journey Medical Corporation (Nasdaq: DERM), a commercial-stage biopharmaceutical company, effective Jan. 27, to pursue another opportunity. The company also announced the appointment of Joseph M. Benesch as interim CFO. Journey Medical is conducting an internal and external search for a permanent CFO.

Overheard

"With inflation still high and indications of continued supply-demand imbalances, it is clear that monetary policy still has more work to do to bring inflation down to our 2% goal on a sustained basis."

Federal Reserve Bank of New York President John Williams informed the Fixed Income Analysts Society, Inc. at an event in New York on Jan. 19, Reuters reported.

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Its a public relations challenge that could determine whether the country meets Bidens ambitious goal to cut greenhouse gas emissions in half by 2030.

Relying on tax credits and rebates made the climate legislation it was approved in August with only Democratic votes  more politically palatable than regulations that force wholesale changes in polluting industries.

But it also means the administrations battle against global warming will be waged one household at a time, said Shannon Baker-Branstetter, who works on energy issues at the Center for American Progress, a liberal think tank closely aligned with the White House.

It is very incremental, she said. So it requires a very sophisticated communications strategy.

Biden acknowledged the hurdle during a recent Cabinet meeting as he talked about the incentives that are becoming available this year.

Folks need to know how to take advantage of these benefits that we passed. Thats on all of us around the table here to make sure we get that message out clearly, he said.

The White House says it is piecing together a plan to partner with state governments, contractors, retailers and social media influencers to get the word out. Lowering utility bills is going to be a key driver, said Josh Peck, a senior policy adviser on clean energy issues.

Its also collaborating with Rewiring America, a nonprofit focused on ways to electrify homes and businesses, and companies like Airbnb, Redfin and Lyft. As part of the effort, Rewiring America created an online calculator that shows what credits or rebates homeowners might be eligible for, depending on their ZIP code and income.

Buying a heat pump or installing solar panels is a major expense line and a major opportunity for savings, said Ari Matusiak, the groups founder and CEO. So its really important to make sure people are aware of the resources they have available and the benefits they can unlock in terms of bringing energy bill savings.

But the White House faces an uphill battle.

Polling shows that while Americans support action to slow climate change, they are broadly unaware of the Inflation Reduction Act, the massive legislation that includes financial incentives to lower emissions, and skeptical of their own role in the climate crisis.

An AP-NORC poll released in September, one month after the law was signed, found that 61% of U.S. adults said they knew little to nothing about the legislation. And despite the multibillion-dollar investment in climate solutions, only a third said it would help climate change; about half said it wouldnt make a difference.

The White House says its not rattled by the results. The goal is to make sure consumers know the financial benefits of energy efficient products at the moment that theyre making key decisions on which products to buy, Peck said.

One of the challenges here is trying to meet consumers where they are when they make decisions about these purchases, he said.

Majorities of U.S. adults said they are unlikely to install solar panels or buy an electric vehicle in the next three years, according to the AP-NORC poll. Among those, at least half said financial incentives would not make a difference in their decision.

Homeowners typically are reluctant to swap out furnaces or water heaters until they absolutely have to shell out the money for them.

One day the heat wont turn on and its negative 10 (degrees) outside and you say, Oh crap, Ive got to get a furnace, said DR Richardson, co-founder of Elephant Energy, a Colorado company that helps homeowners install electric heat pumps and other appliances. So the biggest challenge from our perspective, and from a climate perspective, is to get people to think ahead of time about how to replace these assets.

Most homeowners dont understand what equipment qualifies for a rebate or a tax credit and even contractors are not always aware, Richardson said. While some heat pumps qualify for a full rebate, others do not or are only eligible for partial rebates.

So its just a nightmare if youre not used to working in building spreadsheets to analyze and understand all this stuff, he said.

Not all of the incentives are ready either. While people can get a tax break on the cost of an electric car, solar panels or heat pump, rebates for low- and middle-income Americans seeking to make their homes more energy efficient are not yet available. The Energy Department is still developing the system to distribute that money.

Cecilia Muñoz, director of the White House Domestic Policy Council in the Obama administration, said she learned in her tenure that its critical for government to invest in the delivery of policies.

Too often we as advocates and policymakers applaud when policy gets enacted and then stop paying attention, she said. Instead, they need to design ways to target people directly to help them understand the steps that they can take and the ways that the government is going to make it easy.

The Energy Department has begun releasing information to states about their allotment of $9 billion to support household energy upgrades, including weatherizing homes and installing heat pumps.

And Biden, a self-described car guy, has been doing his part to promote electric vehicles, making appearances at the Detroit car show in September and on the TV series Jay Lenos Garage.

Donnel Baird, founder and CEO of BlocPower, a Brooklyn, N.Y.-based company that partners with utilities, government agencies and building owners to improve energy efficiency, has worked with Lowes and other retailers to promote green appliances.

The idea, Baird said, is that the checkout person says, You know, you can get a tax credit if you dont get that gas lawn mower and get a green one instead. While such engagement may not have immediate results, Baird said hes confident the tax credits and other benefits of the climate law will become better known.

It took years for the ACA to get going, he said, referring to the Affordable Care Act, also known as Obamacare. I think the same thing could happen with this law.

Dan Pfeiffer, a former top communications adviser to President Barack Obama, sees another lesson in the Affordable Care Act.

The ACA got more popular the more that Republicans tried to repeal it, he said, suggesting that Biden take advantage of any Republican efforts to roll back to the Inflation Reduction Act to draw more attention to the laws benefits.

I have no doubt the White House has thought of all of this, Pfeifer said. But the problem is that none of it is easy.

He added: The bulk of the work starts now.