At the beginning of a new year there is usually no shortage of predictions on what the future will hold, but none could have foreseen what 2020 held for us. At the time of writing, more than 85 million cases of COVID-19 were reported globally and 1.8 million have died of a disease that has impacted every aspect of our lives over the past 12 months. While cases in numerous countries still soar, vaccinations have begun, and with them comes a huge amount of hope that we will be able to return to a more normal life at some point in the future. But will we?
Through large parts of the pandemic in 2020, Kantar’s COVID-19 Barometer has monitored how consumers’ attitudes, fears and concerns have changed, across different countries and stages of the pandemic. This article highlights three key areas where the perception of Millennials and Centennials differs significantly from other generations (Generation X and Boomers) and provides suggestions on how brands should respond to the challenges of this group of consumers.
Financial worries
The pandemic has caused the biggest financial crisis since the second world war. Lockdowns in many markets have caused labor markets to implode and consumer spending has gone down, reflecting not only shrinking household budgets, but also a general concern about a gloomy economic outlook. Financial worries are much more prominent amongst younger people: 43% of the younger generations recognise the need to be more proactive about financial planning, compared to only 20% of those aged 55+. As a consequence, nearly half state they pay more attention to prices, compared to 29% of over 55 year olds.
What are the consequences for brands? Lowering prices is obviously not an option for many reasons, particularly in times of economic uncertainty. Many brands are faced with the challenge of investing in digital customer journeys, reinventing their operations, and installing new processes around safety and hygiene measures.
However, there is an immediate opportunity for brands to combine their services with offerings that help customers manage their money. Expense tracking and budgeting should not only be on the agenda of financial service providers. Customers have long been demanding more personalized offers: insurers to match their lifestyle, telecom brands to provide personalized plans, utilities to advise on energy consumption. While the COVID-19 vaccinations will at some point stop the spread of the virus, the economic uncertainty will be present for years to come. How to spend, save and manage your money will be an important topic for the generation of future consumers.
At the same time as being more price conscious, younger generations are also open to rewarding brands that get it right. 44% state they are willing to pay more for a great customer experience, compared to 31% of the Boomer generation (Kantar CX+ 2020).
For brands this means it is all about understanding how they can deliver value to customers. Customer-centricity is not a buzzword, but a strategy for survival in the post-pandemic environment – particularly with the noted increase in brands blaming lapses in service on the pandemic, whether or not it is the real cause of the service issues. Brands that refuse to compromise service standards even now have an opportunity to emerge from the pandemic with stronger brand equity and customer loyalty.
Mental health
Strictly reduced personal contacts, and a gloomy outlook on the future combined with the worries of falling sick, have impacted young people to a much stronger degree. The pandemic has shattered dreams of travelling abroad; those who have started in their first job or at university might not ever have met their colleagues or fellow students.
27% state of Millennials and Centennials state that the pandemic has a strong impact on their mental health, compared to 15% in the Boomer generation.
There is little immediate opportunity for brands to solve the psychological impact of the pandemic amongst the younger generations, but there is a big need to connect with consumers on an emotional level through all stages of the customer journey. Frontline employees especially will need to acknowledge and respond to this in everyday interactions with customers. Leaders need to be aware of this heightened “emotional labor” and the challenges for employees who often face huge difficulties (home office, home schooling, social distancing) themselves.
Throughout the pandemic behaviors have started to change. In many areas, there is actually little difference across generations: across all ages, people are paying more attention to safety and hygiene, have started to eat more healthily, are trying new recipes and spending time with people in their household.
Where younger people differ is in their increased uptake of social media apps and usage of online media, as well as personal transformation. 18% of Millennials and Centennials report a stronger focus on their personal development compared to 9% in Generation X and 6% of Boomers.
For brands there is a new role evolving that includes helping people grow. It is imperative that brands move beyond meeting functional needs and understand what customers truly value. The myth of the average consumer has long been debunked. We know that expectations and experiences vary considerably, depending on the individual, their context, background, previous experiences and situations in life. Brands need to be clear on what they stand for. A strong and authentic brand purpose that links to values and lifestyles is essential for securing share of wallet in a post-pandemic environment.
Brands as role models
Young people also differ in what they expect brands to do. Generation X place “attack the crisis and demonstrate that it can be fought” top of their list, while Boomers expect brands to be “practical and realistic and help consumers in their everyday life”. Most important for Millennials and Centennials, however, is that brands “act as an example and guide change”.
The fact that brands are regarded as role models amongst the younger generations is a double-edged sword. Any inconsistency between action and words will be scrutinized and amplified via social media. Consider the prominent business leader who previously did not miss a chance to talk about the importance of every single employee to the business... and at the beginning of crisis, acted very differently by asking employees to take unpaid leave.
At the same time, it offers huge opportunities for brands to differentiate, but authenticity is crucial. Customers not only need to hear what the brand stands for in marketing and communication, but be able to experience this. How the brand is positioned needs to transcends all layers of the organization in order to be seen and felt through all stages of the customer journey. To achieve this, the brand strategy needs to be translated into a compelling CX vision, and subsequently be broken down into a CX strategy that delivers not just a ‘good’ customer experience but the right one for the brand, in the right way. Only this will reinforce the brand choice every day with every interaction.
New context, new needs
The US psychologist Meg Jay describes a person’s twenties as their “defining decade”: “In almost all areas of development, there is what is called a critical period, a time when we are primed for growth and change, when simple exposure can lead to dramatic transformation… The twenties are that critical period of adulthood…And no matter what we do, the twenties are an inflection point—the great reorganization —a time when the experiences we have disproportionately influence the adult lives we will lead.”.
The vaccine against COVID-19 will at some time this year prevent us from the disease itself. It won’t reset the clocks. What younger generations experienced and continue to experience during the pandemic will have a lasting impact on their values, attitudes and behaviors. Brands need to understand these shifts and adapt the experiences they provide to meet the needs of their future generation of consumers.
