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October 26, 2017

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Phil's Corner - Emerging Consumers

January 26, 2017

 

In this blog, I have been exploring five dynamics that I believe are shaping our world and creating new “rules of the road” for businesses and other organizations:

  1. How “higher purpose” has become table stakes for a successful enterprise

  2. The marriage of global and local in all that is good

  3. The central role the environment, health and wellness play in everyday life and in our future

  4. The role of technology in driving accelerated opportunity and human evolution

  5. The emergence of a new breed of humans (aka consumers)

In this final entry, I share my perspective on a new world of consumers that is emerging, with different mindsets, values, and consciousness influenced by changing world dynamics.

 

When talking about emerging consumers, we often think about the younger generational cohorts that drive changes in the world. There’s good support for that point of view. Not only are they literally emerging in the sense that they are the consumers who have most recently come into age and purchasing power, they have also created and driven technological and cultural changes that are reshaping the world at the broadest and most intimate levels simultaneously. As someone who has a lot of exposure to Millennials through my kids (now adults) and work colleagues, I can attest to their unique perspective on the world and their outsized ability to shake up the thinking of a late Baby Boomer like me.

 

75 million Millennials were born between 1980 and 1995, making them the largest generation in our country’s history. Though it is crucial to remember that there are diverse segments among them, Millennials share some commonalities that make them stand out from previous generations. They are the first adopters (and often creators) of the digital technology revolutionizing the way people and organizations communicate with each other, pushing for greater speed and efficacy, while piling on new layers of social intricacy and nuance.

 

Their complex networks of information have raised the stakes for companies to be more transparent, responsive, and environmentally & socially sustainable. Millennials’ very vocally support the causes they care about and they are looking for brands to reflect their own values in an authentic way. Rather than pursuing ownership of particular signature items (such as houses and cars) or brands as markers of success or a sense of personal fulfillment, they have instead prioritized individual expression and experiences, thus pioneering the sharing economy that has disrupted so many sectors.

 

Competition for these consumers’ attention is fiercer than ever. Companies are under pressure to deliver goods and services at extreme levels of speed, customizability, and sharability, including high requirements for an intuitive interfaces or usage and access through multiple platforms.

 

Sharing and amplifying many of these characteristics, Generation Z (those born between 1995 and 2015) number 69 million and represent 22% of the population (Millennials account for 23%). Although the majority of the generation are still minors and thus much of their power is still latent, they will soon be key drivers of change in the market and society. While similar to Millennials, Gen Z tends to be “brand agnostic” and more pragmatic and cautious when it comes to social media or spending money, having lived through the Great Recession as children.

 

However, while the importance of understanding the younger generational cohorts is undeniable, they are not the only consumers we consider to be emerging. Diversity has grown rapidly, both in terms of nuance and overall numbers, meaning brands need to seriously reconsider their marketing approaches. Furthermore, the rising emphasis on values and increasing freedom for many members of the oldest generations demonstrate that even demographics which brands have traditionally done well with may be revealing new attitudes and behavior.

 

America has always boasted diversity, but diversity has recently grown to include far more than ethnicity or sexual orientation. Brand narratives that represent disability and body images positively stand to benefit. Generation Z is the first generation to be “majority minority” with a particular growth among individuals who identify as multiracial, and both Z-ers and Millennials are highly poly-cultural in their influences, be it food, media or fashion. The Hispanic market remains largely under-leveraged despite estimates that by 2020 it will be worth $1.7 trillion. Hispanics are also early adopters who very vocally share their discoveries through social media.

 

Once often overlooked or oversimplified lifestyle choices, such as staying single longer (the percentage of women over 18 who are unmarried has grown to almost half of the population), environmental sustainability, or pursuing a holistic view of health, are demanding more thoughtful approaches. The continued fast pace of urbanization (growth in urban areas significantly outpaces the rest of the country) is also reshaping the landscapes of how and where people shop. The relationship between digital and brick-and-mortar retail has blurred from both directions as shops are redesigned to create retail experiences and curbside service and delivery become more widely accessible.

 

Values and the personal or financial freedom to prioritize them have further transformed purchasing behavior in all generations, particularly among Boomers (many of whom have practically become hipsters as they seek exciting ways to celebrate greater free time).  Technological developments and better infrastructure are also widening access to and the convenience of environmentally and socially responsible habits. 

 

Indeed, “emerging consumers” have many faces, but collectively and individually are driving major changes in the way we live, in our economy, and in the way organizations need to innovate and grow.

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