Understanding young consumers’ preferences isn’t a matter of curiosity. It’s smart business. The digital lives of Generations Y and Z are evolving quickly, and organizations need to move just as fast to follow the nuances of how these generations consume content, make purchases and think about privacy.
For media, communications, internet and over-the-top (OTT) companies, gaining insight into how young people live digitally has never been more strategic.
One reason is the numbers. In 2019, Generation Y (also called millennials) became the largest living generation in the U.S. Soon to outnumber them is Generation Z, the young consumers born between 1997 and 2012. Another reason is the combined spending power of Gen Y and Z. Morgan Stanley predicts a youth-boom economy in which the two outsized generations will fuel higher consumption, wages and housing demand, all pillars of GDP growth, from the 2020s through the 2040s.
What does this demographic powerhouse of Gen Y and Z — what we call “Generation Now” – want? How should they be served? To find the answers, we partnered with The Center for Generational Kinetics on groundbreaking research.
Part one of this three-part series explores how and why Gen Now will apply connectivity in all aspects of their lives. Part two will investigate how they’ll adopt new content forms over the next three to five years. Part three will examine the nuances of privacy and perceived value.
Maintaining smart devices and phones takes a chunk of time. Members of Gen Y and Gen Z respectively spend 158 and 159 hours per person per year maintaining their devices. This adds up to a collective 13.19 billion hours for Gen Y and 13.7 billion hours for Gen Z when extrapolated across each demographic.
Gen Y and Z are more attentive to updating their devices than Gen X, a finding that makes sense especially in light of the discovery that 38% of Gen Z respondents report they feel highly stressed when unable to access the internet. And 73% of Gen Z females said that they are very tense or uneasy if their phone stops working correctly.
Like Gen X, Gen Y and Z are largely positive about the internet’s influence in the future.
Probing more deeply among the younger members of Gen Z (ages 15 to 18), however, the results are more nuanced. We found that a full third (33%) said the internet will have a more negative influence on society. This group was the most pessimistic of the generations toward the internet, perhaps because they have grown up with it and the negative ways in which it can be used (fake news, trolling, cyberbullying, etc.).
Designing for young generations
Like always, customers want reliable products and services. But given the connected lives of Gen Y and Gen Z, seamlessness has never been more important. The products and services that succeed with customers have a fluid, easy feel.
To zero in on what that means to customers, organizations should dig much deeper into their customers’ likes and dislikes than ever before. Understanding the details of this connected behavior is essential.
All generations want tech that performs as expected, and Gen Now is most willing to pay for services to ensure their tech works. In fact, over one-third said they would pay $50 to $100 per month for a service that would set up, monitor and repair their smart devices. Done right, such services can increase customer retention and revenues, and provide valuable insights about potential new products and services.
To meet the needs of the younger generation, here’s what we suggest:
Use thick and thin data. “Thick” data refers to human insight, the kind that’s drawn from in-depth, in-person observation of customers. “Thin” data refers to large-scale analytics and number-crunching. It takes a combination of the two types of data to reveal customers’ hidden expectations for everyday and outage scenarios. Pairing thick and thin data helps organizations better understand what customers define as “working” and how to better communicate with them and resolve issues.
Conduct in-depth research into Gen Now’s perceived technology difficulties, and then prototype “white glove” customer service. Envision a combination of for-hire tech support (like Best Buy’s Geek Squad) and a personal IT department that keeps them connected.
Consider revising roles and incentives of those with direct customer contact. Empowering field technicians, agents and sales reps to serve as connectivity consultants can help organizations to not only fix problems but also provide robust solutions that increase “stickiness” and sales.
Our next articlein the series will uncover how Gen Now will adopt new content forms over the next three to five years. Learn more about detailed business outcomes by downloading the full report, “The Youth Boom is Here.” To learn more, visit the Generation Now section of our website or contact us.
Keep It Simple and Ensure It Works, Especially for Generation Now: Part One of Three