As the future consumer market will continue to be shaped by millennials and Gen Z despite a slowdown in their income growth amid the pandemic, businesses must adapt to agile innovation and redefine their strategies to align with the new priorities and values of young consumers.
Lan Ha, head of population research, and Alison Angus, head of lifestyles at Euromonitor International, said companies should focus on four pillars of engagement strategy to stay relevant to these consumers in times of uncertainty –innovation, price, values, and activism.
“Young consumers are constantly looking for products and services that are new, exciting, and accessible. They want to be a part of the innovation process, collaborating with businesses to get what they want and need,” they said in the Euromonitor Digest.
Ha and Angus said Gen Zers particularly want to maintain fun in their lives especially since being cut off from friends during coronavirus disease 2019 (Covid-19), and millennials opt for convenient solutions and safer out-of-home experiences for their young families.
Millennials are those born between 1980-1994 while Generation Z born between 1995-2009 account for 46 percent of the global population in 2021, making them the most important consumer segment.
“As a result, alternative channels to shop, play, and live are evolving; social media, virtual venues, e-sports, and digital gaming, alongside safe out-of-home venues and social distancing pods for exercise, dining, and festivals. These new platforms, as well as new services such as virtual try-on or in-store fitting appointments, will enhance lifestyles in the future as they sit alongside normal pre-Covid-19 routines,” they said.
Ha and Angus said millennials and Gen Z consumers’ perceptions of value were already multi-dimensional even before the pandemic, as it did not depend on pure price or quality but also personal and societal values such as uniqueness, wellbeing, and sustainability.
“Now amid the pandemic and recession, as many young consumers have seen their income declining, value and affordability will be increasingly important factors informing their purchase decisions,” they said.
However, as the level of price sensibility varies across different income groups, there will be no one-size-fits-all strategy, they added.
“Businesses and brands will need to reassess their target consumer group’s perceptions towards affordability and refine their value and price strategies accordingly to meet their new needs and priorities. Overall, risk-averse young consumers will seek products and services that deliver value and quality as well as peace of mind for them,” Ha and Angus said.
Moreover, they said millennial and Gen Z purchase decisions are defined by their values and life priorities.
“Companies should embrace the similarities between the wants and needs of both cohorts when developing and renovating products and services but must also understand and accommodate differences between them, especially in this new normal brought about by the pandemic. Covid-19 hit these progressive cohorts hard, forcing many to reassess their situations, their ideals, and expectations both now and for the future,” Ha and Angus added.
They said new routines and needs have evolved around wellness, self-improvement, and new ways of doing things.
On the activism pillar, Ha and Angus cited Euromonitor’s 2020 Lifestyles Survey showing that 48 percent of Gen Z and 46 percent of millennials said they would be more engaged in their community in the next five years.
They said lockdowns and restricted living have intensified their discontent while they are outraged by yet another global crisis that has disrupted many areas of their lives.
“They have run out of patience and are fighting back. Consumers expect businesses to be more visible, active, and transparent. They are choosing to boycott brands that do not mirror their values and instead, are switching to those that are taking a stand on environmental and social issues,” they added.