The COVID-19 crisis has resulted in fresh opportunities for ‘frugal innovation’ in Australia – the act of starting a business venture to ‘create value from values’. 

 Gen Yers and Zers are driving this movement, hoping to build and lead a better world in the wake of the pandemic. According to research conducted by Deloitte in 2020, nearly three-quarters said the pandemic had highlighted new issues for them and made them even more sympathetic toward the needs of others in their local communities and around the world, with a similar proportion saying they intended to take actions to have a positive impact on their communities. 

As traditional employment became less viable in the face of government-enforced lockdowns and waves of restrictions, job losses gave some individuals the motivation to start ventures or consultancies based on life-long dreams (such as a bakery or self-publishing imprint) or new consumer demands (home improvement services or PPE equipment). These formally trained and self-taught opportunity-spotters are driven by a belief that, in times of crisis, makers can do more with less – and for more people. Some innovators have even committed to making it official. According to the Australian Securities and Investments Commission, the number of new business registrations in July 2020 was 34% higher than in July 2019. 

 These small businesses – either newly established or recently pivoted – aim to uphold DIY values of making, repairing, and hacking for a cause, often putting cultural change, education, and social purpose before entrepreneurial gain. This non-traditional approach appeals to Gen Yers and Zers, many of whom think that although businesses have shown a genuine commitment to society during the pandemic, they are individually responsible for positive change. 

Melbourne has seen a boom in passion projects that have grown (or pivoted) into successful ventures. As hospitality worker side-hustles turn into restaurants or meal delivery service replacements (such as 

), Instagram accounts evolve into destination music festivals (

), and locally-made beauty and sanitation products (

) challenge global giants, we can see from the public’s embrace of small businesses that there are countless opportunities for growth. However, a reliance on informal networks highlights the limitations around scaling and standardisation. With the DIY movement flourishing in cities Down Under and creating new business prospects in less-than-ideal economic circumstances, what can large corporations learn from smaller ventures about accessibility, experimentation, and low-fidelity products and services?

Gen Z is the ‘steward, don’t sell’ generation, so the shift towards creating businesses that benefit others first and become profitable over time seems natural. In a global study published by EY, Gen Zers from around the world expressed that if they were in charge, they would provide more resources and support for small, local businesses, emphasising cooperation rather than individualism. 

Melbourne, known as Australia’s culinary capital, has seen an uptick in community-minded food ventures. Two examples are Joey Kellock's cult delivery service-turned-restaurant 1800LASAGNE and Tom Jacobson’s community project FairFeed, staffed by hospitality workers who’d lost their job because of the pandemic. Both ventures were started to make a positive impact in spite of tough circumstances – Kellock had just lost all his festival-related work when COVID-19 hit and needed to turn his side hustle into a full-time business, and Jacobson wanted to create jobs for hospitality workers while serving anyone who needed budget-friendly healthy meals delivered. 

“With the rise of localism, the customer becomes a new point of value,” explains Dr. Charlie Ranscombe, a senior lecturer in product design at Swinburne University. 

 Young people are driving the shift to supporting local firms, with 74% of Gen Yers and 73% of Zers saying that once pandemic restrictions are lifted, they’d take actions to have a positive impact on their communities. 

 Ranscombe points out that pre-COVID-19, customers may have made purchasing decisions based on price-point and how much they personally wanted to buy something, rather than where a product was made. “Nowadays, people want to support local ventures, so the product becomes a signifier of subscribing to local values,” he explains. 

Gen Yers and Zers want to make a tangible difference through their work

Ranscombe argues that people value longevity and shared community over perfection, which explains why brands with active social media communities, like Fluff CC or 1800LASAGNE, tend to do well. “The way that we consume mass-market products hasn't changed a great deal since the 1950s. Make more stuff, consume more stuff, show your status or your success by getting an incrementally better version of stuff,” he says. “Younger generations have just figured out more quickly that it’s not a sustainable way to live.” 

Cleaning product brand Soap Club was founded by Brunswick-based maker Zibby Aitken-Valtenbergs. She hand-makes cold process soap and castile soap that’s refillable, vegan, and free from palm oil. On social media, the product itself is the basis of all the visual branding rather than imagery of Aitken-Valtenbergs working behind the scenes or photos of the ‘ideal customer’. Who is it for? According to its website, it exists for “everybody who believes that products should be gender-neutral, cruelty-free, locally-made, and natural.” 

 This inclusive and simple messaging may seem insignificant, but the way businesses talk about themselves online matters. After all, 50-60% of the primary influence in Gen Z’s brand decisions comes from social media and online channels. 

“A brand like Soap Club knows from the outset that this is how they want to contribute to their community and the broader environment,” explains Dr. Amanda Spry, a lecturer in marketing at RMIT University’s School of Economics, Finance, and Marketing. “When we know the brand is independent and it is smaller scale, perhaps it's more believable that they can act in a way that is consistent with their stated purpose and values. For example, their pouch return-and-refill system – that’s a tangible action connected to their purpose of sustainability.” 

 One-person microbusinesses (such as Soap Club) or small, friendly teams working from studios (Fluff CC) are vastly different from multinationals like Aēsop, which relies on hyper-consistent branding and a scholarly approach to beauty. 

“The local businesses almost feel like the maturing of the maker movement into a minimum viable product solution, inspired by the proliferation of start-up culture,” says Ranscombe, explaining why Soap Club may feel far more trustworthy or appealing to younger generations. “What those microbusinesses are doing isn’t really much different to people just tinkering in their sheds.” 

Small-scale production processes allow for rapid adaptation

Collaboration as a path to outliving ‘crisis mode’ operations

A slower pace of life during waves of lockdowns has seen young people embrace their ‘maker’ abilities. Indeed, research published by McCrindle in May 2020 highlighted that 53% of 18- to 25-year-olds and 50% of Aussies aged 26-40 said they’d been spending more time on hobbies and creative pursuits since the pandemic began. 

 While some have turned to these activities simply to alleviate frustrations and anxieties, others have also been using them to solve societal challenges on an individual level, whether that’s by setting up a vegetable garden to reduce their carbon footprint or learning to knit to cut textile waste. 

Sukhmani Khorana, a Sydney-based research fellow, led a qualitative study to better understand how this desire to care for the environment manifested among young first- and second-generation Australian migrants. The research found that there was often a hesitation to speak up about climate change even if there were small things that participants did at home, like growing a vegetable patch or using a KeepCup for their takeaway coffee. 

 Khorana even coined a phrase to describe the movement: “‘Quiet environmentalism’ is the commitment to doing the work but not necessarily engaging in outward-facing forms of environmentalism, such as protesting or community organising.” 

Smaller businesses are better able to tap into this ‘quiet environmentalism’ than larger firms as they’re “able to make changes iteratively based on feedback,” says Spry. “Corporate businesses can’t be as quick to pivot to sustainable practices or focus solely on local makers. They have their brand reputation and a significant market presence to consider. So, they also need to be protective of that.” 

 Khorana argues that environmental awareness can be a conscious choice as long as it’s not too costly: “Some people do need a soft entry into things which they wouldn't otherwise think about in their everyday lives. If you're saving money, that's the soft entry into more explicitly environmental activities.” 

 In the UK, Whirli is tapping into this by offering a money-saving and sustainable solution for accessing children’s toys.

How can big brands adopt a small biz mindset?

Encourage long-term relationships with products

Ranscombe notes that, traditionally, the consumer expectation was that once they bought an item, its condition would become worse over time the more it was used. Now, customer satisfaction often derives from longevity, with people expecting a product to change over time but for brands to ensure it lasts for a long period or can be fixed if it deteriorates. 

 Melbourne-based clothing label Arnsdorf, for example, relaunched in 2017 by restructuring its entire operation and bringing manufacturing in-house. To balance out its premium price point, the label offers complimentary alterations and repairs on any item of clothing. This commitment to sustainability granted Arnsdorf the opportunity to be one of eight brands featured in department store David Jones’ Mindfully Made online hub. 

 The criteria to be selected included values such as Australian made, Community Minded, Sourced with Care, Reduce and Recycle, and Kind to Animals. 

Be flexible with your brand language, not identity

A brand’s use of language can help build customer perceptions – it’s how they can change people’s behaviours, expectations, and beliefs. 

 “Major brands have been about consistency for so long,” says Ranscombe. “There is so much value in the brand name that the risk of diluting that is always pretty terrifying.” He suggests that being flexible with what a brand believes is acceptable can, ultimately, help rather than hold it back. 

 For example, supermarket chain Coles has transformed one of its inner-city flagship stores into a sustainability-focused concept as part of a commitment for the entire Coles Group to be powered by 100% renewable energy by 2025. 

 This shift towards sustainability reflects a desire to build brand value and trust with customers instead of competing solely on price. 

DIY doesn’t mean do everything yourself

From making their own bread and furniture to giving themselves haircuts, many Gen Zers expect a DIY mindset to persist beyond the pandemic. 

 Ranscombe sees a push towards shared ownership in branding, rather than individuality, becoming more visible. “The rise of brand collaborations has been a useful way for companies to tap into the communities connected to specific cultural groups or makers,” he says. “That means they can attach themselves to the values expressed by whoever they’ve chosen.” But he warns that brands can’t be territorial. “With co-ownership, you’re introducing non-standardisation and opening up the brand. Pre-COVID, this might [have made] brands more nervous because it dilutes their identity.” 

 Now, such collaborations are more likely to be driven by the opportunity to offer what the customer is looking for.

Charlie Ranscombe is an interdisciplinary researcher working in design practice and new product development in the fields of aesthetics, user experience, and design visualisation. Dr. Ranscombe's focus is in researching approaches to better understand product appearance, and how brands change appearance to stay relevant to key user groups while maintaining core brand identity. Dr. Ranscombe has completed case studies in consumer electronics (Apple, Samsung), automotive (BMW), and packaging design (Crown Lager). Findings have given brands an in-depth understanding of where their products stand with respect to competitors as well as projections for new designs that will be innovative and maintain brand identity.

Dr. Amanda Spry is a lecturer in marketing at RMIT University’s School of Economics, Finance, and Marketing, and serves on the editorial review board of the European Journal of Marketing.

Dr. Sukhmani Khorana is a Vice-Chancellor’s senior research fellow based at Western Sydney University’s Young and Resilient Research Centre.

Gen Y (born 1982-1996)

Gen Z (born 1997-2010)

Oceania

Australia

Citizenship

Shopping

YourStory

Deloitte

ABC News

Good Food

Interview with Dr. Charlie Ranscombe conducted by the author

Soap Club

McKinsey & Company

Interview with Dr. Amanda Spry conducted by the author

Creative Supply

McCrindle

The Daily Telegraph

South China Morning Post

Young & Resilient Research Centre

Interview with Dr. Sukhmani Khorana conducted by the author

Broadsheet

Vogue

Start it up | Medium

Mumbrella

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