Pages

Wednesday, January 12, 2011

Generation Z-consumers of tomorrow

Shekhar Gupta, parthdamor | sjmsom, iit Bombay

Generation Z – Consumers of Tomorrow

What is the first thing that would strike our mind as soon as we listen to the word ‘Marketing’ that has become the buzz of today’s business world? Philip Kotler? 4 P’s of Marketing? Brand? Or most probably ‘Consumer’? Have we ever tried to think beyond the existing or the apparent? Have we ever conceptualized our thinking to look into a world of marketing that is going to be in the near future? The world is changing very fast and this volatile nature of the market and consumer is leading the marketers to plan their branding strategies that would make the right fit into the world we are expected to be exposed to in the recent future. This idea of looking into the future marketing scenario needs to study the ones who are going to be the Consumers of Tomorrow – ‘Generation - Z’.

What is Generation – Z?

“They do Nintendo’, they utter on Twitter’ and the only “Face” they book is when they come visible on “Facebook” unless they find it obligatory to do so. Nevertheless, they do lots of e-read, e-mail, e-file, e-fax, cloud and surf. They may not have a wristwatch but they would have a smartphone to see the time.”

Generation – Z refers to the ‘people who are born between the mid 1990s and 2010’ and are popularly known as ‘Digital Natives’ or ‘Net Generation’ or ‘iGeneration’. We focus our attention towards the Generation Z. One of the main differences between Generation Y and Generation Z is that Gen Y’ers remember life before the proliferation of mass technology, while Gen Z’ers are born with full mass technology already in existence .This makes them both comfortable and dependent on technology such as communication tools, internet cell phones, MP3 players, I-pods undeniably. Generation Z are the forerunners of Generation Alpha, those to be born in the decade of 2010 and are very much in line with the digital future. Today, the Generation Z makes up for nearly 18 percent of the world’s population which is a large pool of consumers to be considered by marketers for the coming tomorrow.

What makes Generation – Z different?

Each Generation is characterised by different experiences that make & shape their perspective. Though the types of influences that shape each Generation are similar in many ways, the characteristics and qualities of the Generation Z are completely different from the others which can be analysed on the following points:

Online – Generation: The internet has experienced a phenomenal growth and development - in terms of penetration, technology, applications and adoption during Generation – Z. A research shows that 91% of this group is active online and have developed very different communication styles and preferences to their parents. Due to the huge influence digital technology has had in their short lives, these children have experienced radically different childhood experiences than other generations had. The figure below shows some developments that played a crucial role in shaping their perspective towards technology.

Advancement & Speed of Technology: Every Generation has seen the emergence of a ‘disruptive’ technology that rendered the then existing technologies irrelevant. Now, the time span between the emergences of new technologies has reduced and ‘innovation leaps’ are increasingly becoming smaller. The new technologies continue to emerge faster than ever leading to a stronger ‘connection’ between newer Generations.

Increasing overlap between Generations: The connections between the generations are becoming stronger which leads to the shorter span of technological innovations. The increasing overlap between the generations is mainly due to the ever-increasing pace of technological development and advancement in digital media and communication tools.

Relationship with parents: Generation Z experiences a tighter connection with their parents on a number of dimensions. Generation X is raising Generation Z with a high involvement parenting style. Some of the illustrations which show it are:

a. Common Technology: Generation Z has grown up with the technologies that their parents have always been using and feel very comfortable with such as mobile phones, laptops, video games, online networks, etc

b. Brand Experiences: Generation Z and their parents are developing an affinity for and purchasing the same brands.

c. Taste Commonality: They share their taste of recreation, entertainment, hanging around with their parents e.g. they watch the same entertainment channels that their parents watch. Many gaming companies are catering to family gaming segment.

d. Family Values & Ethics: Generation X saw a social trend of divorces and thus, is expected to instil stronger family values, along with old notions such as work ethics, etiquette and resilience. This, along with a better education, will help Generation Z become more tolerant, respectful, and responsible.

What makes Generation-Z lucrative to marketers?

Long gone are the days when marketers used to rely on a captive audience. The ownership of the communications is increasing getting shifted from the provider to the customers. Today’s teenagers do not respond to marketing in the same way as previous Generations. In the five years this Generation Z will be working, earning and consuming. Understanding the different behaviours, interests and preferences of this group can help marketers to craft their strategies. The following points present a complete and clear picture of the traits of the Generation – Z kids and the marketing implications which they provide to the marketers:

Web presence: Generation Z spends maximum of their time online and has a strong preference for the interactive media. And, social networks play an important role in making a strong influence on the consumer decision. According to a global survey of children, 50% of all tweens (8–12years) globally are online daily and 25% interact daily with peers in other countries. To effectively market to Generation Z, companies will need to have a strong presence online: Profiles on networking portals, Virtual world based marketing, detailed product information and the ability to easily make purchases.

Awareness & Education: Generation Z has a wide exposure to large and varied information sources and activities which is expected to make them smarter, flexible, and more responsible. Today’s kids are very knowledgeable and are able to understand and relate the various aspects of a problem because of the increased exposure and bend towards conceptualized learning and thinking. For instance, 75% of teenagers consider global warming to be ‘a serious concern’ and rate it even higher threatening than drugs, violence or war. A more informed and smarter Generation Z is expected to evaluate product in terms of their attributes, utility, brand name, trends etc. Companies will need to take a proactive stance toward the environment as they market to Generation Z and should look towards providing green products/ services.

Orientation towards technology: As an advantage of having been born in a digital world, Generation Z is proficient with and largely dependent upon technology. They are living in a real time environment which is the result of increase in comfort and dependence on electronic gadgets and this will lead them to make early purchases and increase demand for such products. Companies will need to adopt real time marketing techniques and turn towards sales channels such as text messages, mobile marketing, internet marketing, and online interactive media portals which offer gaming applications and video/music downloads.

Value Oriented: The privilege of being brought up by Generation – X has made Generation Z conservative financially, though they are materially comfortable. They are surrounded with the competitive markets full of variety and diversity and they look out for the products and services which provide the maximum value-for-money. Today’s marketers need to market their products cautiously. A guarded spending might reduce the credit card culture which is prevalent in Generation Y and could lead to decreased affinity for loans and other borrowing schemes.

The Road Ahead

Generation Z will be leading the world in a couple of decades from now. The generation of entitlement is going to continue to grow, so from a marketing perspective, it’s very important to be prepared to speak to youngsters in the right way as this generation is keen, mobile and digitally wired in toto. They prefer sending a text than talk. They tend to see social media as ‘the norm’ and ‘socializing’ is necessarily about hanging out with friends, shopping, (or sometimes even leaving chair for that). And that is why, they are able to incapacitate a brand, kill a campaign, and demolish the bottom line of a company by starting an insurrection quicker than we thought with the help of few status updates on Facebook or Twitter. This active group will be less interested in hybrid marketing – where an online presence merely improves an offline business.

Generation Z believe in the concept of self-branders. They’re not easily impressed with old marketing tactics because they realize that there is a new way that is more effective: viral marketing. This is most important prediction since it can affect widely. As advertisers look to find a way to explore media spaces, such as the 30 second spots, banner placements, etc., Generation Z will continue to find ways to access the information quickly. They tend to be impatient and expect instant results as information is available freely and fast. The Generation Z are not good listeners and lack interpersonal skills. So when it comes to work, in future they may barely be seen in an office communicating with their colleagues but might live their life in the virtual world.

Beyond 2025, there could be drastic changes in the work culture, ethics and values that will be set forth by the Generation Z. This doesn’t signify that traditional marketing will disappear, but there is a need to shift the paradigm to online media with the attributes and quick response characteristics that they demand. Marketers who are accustomed to traditional marketing models should start preparing for future marketing trends now.

The early adopters will enjoy the rewards of the new consumers when they come of age in next decade. Many companies have already started taking steps to target these young consumers. E.g. McDonald’s mobile marketing campaign to launch McFlurry or Nike’s Personalization service, NIKEiD, allowing customers to design their own shoes. Virtual world marketing (e.g. Avatar marketing) is a new tool what modern marketers are looking for.

The moral of the story is Marketers will need to be more convincing in creativity to engage the teens in something interactive because they don’t want just engagement, they want to go beyond conversations and they expect more from their brands than ever before. “├╝ber teen” is on the rise, and the time is now to implement the most agile, fickle and trickiest to engage generation.

You may not be web savvy, but within five years, your business will need to be as savvy as the kids are now’.

No comments:

Post a Comment