Start Preparing Your Business for the Generation After Millennials
Is retail dying?
Many business people, myself included, have opined that with the increased acceptance and convenience of online shopping, consumers will eventually cease to visit retail stores altogether and instead shift their shopping online, specifically through mobile devices and apps.
Let’s face it, a two-day wait for batteries and shampoo is preferable over traffic, parking and crowds -- especially if you have children.
No generation will more contribute to this shift than Generation Z. Roughly defined as anyone born in the mid- to late-1990’s, they are estimated to have an average allowance of $70 a month, which equates to an annual purchasing power of $44 billion. As they start to hit legal employment age, their influence will increase dramatically.
Generation Z, however, will likely have no brand loyalty.
They are reported to prefer and lean toward companies that produce goods and services that have real rather than perceived value, and they more readily rely on the opinions and recommendations of their peers when making a purchasing decision.
While this is troublesome for larger corporations that rely on million- and sometimes billion-dollar marketing budgets to cultivate and maintain brand loyalty through a ubiquitous presence, it represents an opportunity for smaller companies.
To take advantage of Generation Z’s fickleness, and assure that you do not become a victim of it later, here are a few business strategies to consider.
1. Presence. Generation Z will be a completely social and mobile generation, relying on mobile devices almost entirely for content consumption, browsing and shopping, as well as social media for interacting with friends. For this reason, your strategy needs to prioritize mobile marketing and social media. This includes having a mobile-ready website and a strategy to consistently engage with customers through social media.
2. Value. Creating value in your products, through better quality design and manufacturing, will elevate the reputation of your company, an important attribute to Generation Z. It will no longer be enough to create value through branding alone, as this generation will see through this and ultimately call you out.
3. Transparency. Generation Z will demand that companies be honest and transparent. With social media and peer reviews, companies will be unable to hide from negative comments or controversies. Instead, companies should be ready to face these challenges head-on with a well thought out and, more importantly, expedited strategy for dealing with conflicts.
4. Tastes. These future consumers are unique in that they respect and value individuality while placing a great deal of importance on group acceptance. It is a complicated balance, one that will baffle older generations (myself included).
Embracing these new and unique tastes will help your company better connect with this generation. If nothing else, your company should consider hiring and nurturing individuals from this generation as part of your marketing team (when they are old enough, of course).
5. Convenience. Never assume that the same conveniences of your generation (call centers, for example) will suffice for Generation Z. This generation will demand the convenience of browsing, shopping and receiving customer service through mobile and social-media channels, so your strategy, from marketing to operations to human-resource management, needs to consider this.
6. Privacy. Collecting and using data has been a hot and sensitive topic. While many companies collect and regularly use customer data to tailor shopping experiences, Generation Z will be much more tech savvy, understanding better than most how to control the data that they share. Businesses will need to respect privacy to a greater extent or risk losing customers to other companies who will.
One of the best examples of a company taking advantage of the fickle nature of younger generations is Under Armor. When the company started, it set a goal to unseat Nike as the top sporting-apparel company, an extremely lofty idea considering Nike had a multi-million-dollar marketing budget to defend its position.
Instead of trying to compete head-to-head, Under Armor went after youth, who unlike their parents, had not yet developed a brand loyalty to Nike or any apparel company. By aggressively pursuing youth sports, then growing with their consumers to supply college teams and eventually professional sports teams, Under Armor seeded, nurtured and grew a large and loyal base of customers.
It helped that they also made great products.
Some believe that Generation Z will pose immense challenges and headaches to businesses. Maybe that will be the case, but for companies that have the patience and the plan to deal with them, a huge market of consumers with growing purchase power and no brand loyalty are just waiting for a company to court them.
Will you be one of them?
Do you have tips for making an impact with Generation Z? Please share your thoughts in the comments section below.
Entrepreneur Leadership Network Writer