Throughout history, brands have had to observe current trends in order to make themselves attractive to whichever generation is dominating markets at that time.
When a new generation comes of age, companies then have to adapt and change the way they market themselves to appeal to the different needs of these people. This has always been the case, but Millennials have still been accused of killing certain industries in recent years. Now, there is a new generation on the horizon, and it could be about to shake up business markets once again. So how can businesses properly prepare themselves for the arrival of Generation Z?
Are Millennials Killing Certain Businesses?
One of the main news stories surrounding Millennials is the way they have killed certain businesses and are to blame for a lot of the things that are wrong in the world of retail. The thing is, however, that numerous sectors have simply failed to adapt to the younger generation and have fallen out of favour. At the end of the day, it is the responsibility of the seller of a product to keep customers coming back. The buyer is under no obligation whatsoever to stick with a certain product or service if it doesn’t suit their needs.
The thing to understand about Millennials is the fact that they grew up in a totally different time to Generation X and the Baby Boomers, which proceeded them. Millennials were alive for the dawn of the internet, but some can remember a time before it became mainstream. They have watched it grow and evolve, and have seen the rise of mobile, social media, and interactive gaming. They have quickly come to realise that some of the old ways of doing things are simply not efficient enough, and have discovered new methods, which are far superior.
Granted, Millennials have been credited with killing off a number of industries. The fizzy drinks sector, for instance, is one which has had to bear the brunt of a change of mindset which first occurred with Millennials. In 2006, for the first time in twenty years, fizzy drinks sales in the United States declined. Millennials were becoming aware of the high calorie and sugar content of the drinks, and forced companies like Coca-Cola to place more focus and even research into lower-calorie offerings. The drinks corporation also bought out more trendy and healthy drinks companies, including Organic & Raw Trading Co. With the decline of soda sales, the coffee industry in particular has capitalised and thrived.
Millennials have also supposedly killed off casual dining chains like TGI Fridays, traditional weddings, beer and mayonnaise. But the other way of looking at the situation is that these industries have harmed themselves because they failed to adapt. Current businesses need to learn from the mistakes of others and make sure they are properly prepared for the next generation.
Who are Generation Z and what are Their Interests?
Generation Z represents the youth of today and the generation which is just entering the jobs market. They were born in the late 1990s to mid-2000s, and have never known a world without the internet. These are people who may have never seen a wired house phone and find the concept of having a conversation over the phone strange. They have grown up with smartphones, and are accustomed to having everything that they need at their fingertips and accessible with a few touches of the screen. Generation Z has often been referred to as the iGeneration, as the rise of Apple products such as the iPhone and iPad has occurred in the same timeframe.
The generation has been heavily influenced by the September 11th attacks in the USA along with the Great Recession, and this has led to feelings of unsettlement and insecurity. They have never known a world in which there has been no terrorist threat, and the failing economy during their childhood had an effect on the kind of things they were able to do while growing up due to many houses bringing in lower wages. Studies have shown that this upbringing has resulted in Generation Z being thoughtful, open-minded, compassionate, and determined.
Research has found that 41 percent of Generation Z spend more than three hours each day using computers for things other than schoolwork. This was nearly a 20 percent rise compared to 2004. Services that have come to the fore during the lifetime of this generation include Netflix and other online streaming networks. This new way of consuming film and TV could eventually kill off longstanding industries like the cinema. It has also been discovered that this generation is less likely to give companies a second chance if they have received bad service. This could be due to the fact that there are widespread alternatives existing in almost every industry, so sticking with the same business isn’t as important as it used to be. Another major characteristic of people from Generation Z is their ability to multitask. Their lives are like web browsers with multiple tabs open, as they juggle social networking with watching live streams and playing games.
How do Millennials and Generation Z Differ?
Millennials and Generation Z have a lot of things in common. They are both adept at using computers and other electronic devices which have become ingrained in their lives. However, there are some small differences between the two generations which could have massive implications moving forward.
Millennials can still remember a time before smartphones and tablets became such a huge part of our daily lives, and recall seeing some old industries as they were dying out. This is perhaps why games and television which have featured nostalgic elements have done so well in recent times. Things like bingo – a game which was much-loved by Baby Boomers but not as much by Generation X – were completely revitalised for Millennials. Bingo switched to an online setting and appealed to younger players by using social media to advertise to them. Not only that, but the colour schemes, aesthetic and graphics of the websites have become fairly youthful. New-school bingo[MB2] , largely played online, attracted Millennials who sought after bonus features and varied gamepl ay – and has been successful in doing so. Pokémon Go was another popular game which used nostalgia to win players over. Many Millennials remembered playing the early offerings on the Gameboy and wanted to relive their childhood when the Niantic title came out in 2016. This kind of nostalgia might not be such a driving force for Generation Z, as they have only ever known a world full of electronic devices and the internet.
Another major difference between Millennials and Generation Z is the state of the economy they grew up in. Millennials were raised in times of economic prosperity, whereas Generation Z grew up during the recession. This has led to the younger generation being much more pragmatic than its predecessor. For this reason, they are interested in long-term, smart investments. They are also keener on buying things that save them money, while Millennials were always seeking the product which provided the best experience.
There is also some evidence that Generation Z could bring back a return of in-store shopping. Millennials are all about online retail, but according to Marketing Dive, 80 percent of Generation Z like to browse physical products in brick and mortar stores. However, they still often opt for e-commerce for convenience. Finally, it has become apparent that Generation Z is less likely to be influenced by brand names, and will be more focused on their independent image. They can use social media to find communities where they belong and don’t need to conform to social norms by wearing a particular product that is in fashion. This could represent a seismic shift in the way big brand names market themselves to the younger generation. Tried and tested tactics which have become commonplace may need to be completely rethought.
Will Companies need to Market to Two Different Demographics?
Businesses certainly need to learn from past mistakes in order to deal with the shift from Millennials to Generation Z. It is imperative to keep an eye on changing trends and adapt to them as and when they arrive. However, focusing purely on the next generation could pose a problem.
The wisest method for companies now is to make themselves available to both generations. This can be done by finding similarities between the two. Influencer marketing has been proven to be influential with both groups of people, along with ethically-motivated marketing models such as going plastic-free. They can also both be targeted by personalisation and drilling down into the various subcultures.
The best way for small businesses to prepare for the arrival of Generation Z is to make sure they are aware that there will be a swing in the next few years. They need to adapt quickly to changes, but also stay true to their existing Millennial client base.