Brands continue to sharpen their focus on millennials, 80-million strong, as they enter their peak earning and spending years. Not far behind, with roughly 166 million people in tow, are gen Zers, who are starting to enter the workforce and generating more disposable income. These two segments share similar characteristics, from their comfort level interfacing with new technologies to their heightened awareness of social issues. They expect a modernized, mobile-friendly, frictionless shopping experience. Perhaps most important, both generations seek deeper, more authentic connections with brands whose mission transcends making money.
More than any other consumer groups, millennials and gen Zers support brands that take a stand on the issues of the day. Both generations have an enhanced social awareness, prompted by an unprecedented access to information online.
Brands eager to connect with these younger audiences need to go beyond creating social media accounts and developing commercials touting unique product and services. Activating the enormous buying power of millennials and gen Z consumers is dependent on developing a consumer-first shopping experience while demonstrating how brands are making a positive impact on society.
The Meshing of Millennials and Gen Z
Millennials have an enormous amount of consumer clout. They have as much as $200 billion dollars in buying power, per Forbes.com, and make up nearly a quarter (1.8 billion people) of the global population. Millennials, who are between the ages of 22 and 38, also account for 21 percent of consumer discretionary purchases, or nonessential spending on things such as meals at restaurants and entertainment.
According to Nielsen's 2018 Millennials on Millennials study, 70 percent of consumers indicated being more likely to purchase from a brand if it handled a social issue well. The study, which surveyed 1,058 millennials on the importance of corporate social responsibility, also found that nearly 37 percent of millennials are more willing to make a purchase from a company if it supported a cause they believe in, even if it means paying a premium.
Gen Z, which follows millennials, already accounts for $143 billion in consumer spending, even though people from the gen-Z cohort were born between the relatively short window between 1996 and 2012. This segment makes up 27 percent of the current population, and is extremely diverse, with 48 percent of Americans born since 1996 identifying as non-white minorities. More than any generation that precedes them, gen Zers expects brands to reflect their values and function as a force for good.
Despite their similarities, there are some key differences between the two demographics that brand managers need know before attempting to engage them. Gen Zers, for example, are not teenagers of yore; they don't drink or smoke much while drug abuse and teen pregnancy is much less prevalent compared to previous generations.
A confluence of seismic events, such as the March for Our Lives, the election of Donald Trump, and the Black Lives Matter and MeToo movements, have had a great deal of influence of gen Z's worldview. Consequently, gen Zers look for brands that provide more than lip-service and actually join consumers to tackle the issues they're passionate about.
Channeling Social Media for Good
Instant communications made possible by social media, combined with the proliferation of smartphones, has transformed the way people interact with brands. Unlike previous generations, both gen Zers and millennials can use their social channels to advocate on behalf of brands (or criticize them).
Millennials and gen Zers share similar characteristics, from their comfort level interfacing with new technologies to their heightened awareness of social issues. They expect a modernized, mobile-friendly, frictionless shopping experience. Perhaps most important, both generations seek deeper, more authentic connections with brands whose mission transcends making money.
While previous generations talked on the telephone and mailed letters to contact customer service representatives and brand executives, younger people can simply pick up their smartphones and send a direct message via Instagram or voice their criticism in a Facebook post.
Although criticizing brands via social channels is open to most anyone, gen Zers and millennials often use these platforms to encourage — and sometimes demand — brands to be more socially and environmentally responsible.
At the same time, businesses can leverage these channels to be more transparent, assess their consumers' needs, and show how they use their resources to drive meaningful change.
Brands are increasingly being held accountable for poor business practices and, conversely, embraced for innovative programs that facilitate positive change. They're also thinking of new ways to create initiatives that connect with their customers values and trying to manifest the adage that companies can do well by doing good.
Brands that Take a Stand
"Brand Purpose" was voted the ANA's 2018 Marketing Word of the Year. It is what makes a brand necessary; not what the brand provides but why it exists beyond turning a profit. Having a brand purpose is increasingly crucial for companies and organizations of all stripes, as younger consumers no longer make decisions exclusively based on product selection or price.
Amid a global pandemic, reckoning over systemic racism, political dissent, and myriad other social and environmental issues, brand purpose is more critical than ever. Millennials and gen Zers not only expect brands to use their platforms to advocate for meaningful change but to put some skin in the game.
Companies that foster trust and loyalty between the brand and consumers are often rewarded with business growth. According to Kantar Consulting's 2020 Purpose report, purpose-driven organizations have seen their brand valuation increase by 175 percent during the past 12 years.
When executed carefully, purpose-driven campaigns can play a key role in transforming passive shoppers into loyal customers and brand ambassadors. The 2018 Edelman Earned Brand study, for example, reported that 64 percent of consumers globally make purchases based on where a company stands on political or social issues they care about.
Showcasing brand principles sparks consumer purchasing just as much as messaging focused on product features, perhaps more. According to the Edelman study, while 44 percent of consumers expressed purchase intent after viewing products, 43 percent of respondents expressed purchase intent after watching branded content focusing on advocacy for certain issues.
More important, taking a stand drives consumers to advocate for an organization more than product-based communications, with 32 percent of respondents expressing their intent to advocate for a brand after engaging with a cause-related campaign. In contrast, only 26 percent of people said they would advocate for a brand after watching a product-based commercial.
Cultivating Brand Purpose
Marketers agree that cause marketing must be baked into the brand. Establishing a brand purpose and activating it in a way that affects consumers remains a challenge across the media landscape.
Although 78 percent of marketers said their company has established a clearly defined brand purpose, 82 percent expressed a desire for more assistance in how to bring it to life, according to a 2018 ANA study. Unfortunately, there is no one-size- fits-all solution to reaching consumers by appealing to their various passions and what makes them active.
From the language used for a mission statement illustrating brand goals and values to the development of community-based programs designed to help people in need, communicating brand purpose is a major undertaking that requires buy in from every level of the organization.
For marketers, the journey to discovering brand purpose begins by looking at the past and understanding the company's heritage. An organization's history can help to inform brand purpose. Looking back enables brands to assess how their tradition and values have helped consumers' lives throughout the years and continue to be relevant today.
Refining brand purpose requires a great deal of listening. Surveying external stakeholders, employees, and customers can provide companies with valuable feedback that can serve as the foundation for their brand purpose. Marketers need to engage employees, past and present, and listen to shareholders and customers in an effort to refine messaging, assess business objectives, and determine which values people care most about. Here are two important tips.
Be Genuine. Establishing brand purpose is easy. Communicate that brand purpose in a way that transforms skeptical shoppers into loyal brand advocates is the hard part. In order for brand purpose to drive business growth, marketers need to show how their companies are having a positive impact on society.
Mission statements and press releases condemning racial inequality aren't enough to attract millennials and gen Z consumers, who see right through insincere attempts to exploit a sensitive issue for the benefit of generating some new revenue.
To truly distinguish the brand from competitors — and reap the benefits of purpose-driven marketing — brand purpose needs to be integrated throughout the entire organization, informing business decision and inspiring campaigns that result in meaningful changes.
Be Inclusive. For companies struggling to define their brand purpose, encouraging inclusion regarding employment and media representation is an effective springboard.
Inclusivity initiatives can range from adding captions and audio descriptions to content so people with hearing and visual limitations can interact with branded content to launching recruiting programs as a vehicle for diversifying an organization's workforce.
Companies have put a growing emphasis on diversity and inclusion in the workplace for the past few years. But the fight to empower minority groups such as African-Americans, women, and people with disabilities, must be fought on multiple fronts. For instance, brands need to build a diverse network of employees, partners, agency partners, and influencers and strive to include more diversity across their creative assets.
According to a study by The Female Quotient and Google, 77 percent of millennials and 76 percent of teens said they are more likely to consider purchasing product after seeing an ad they considered to be diverse or inclusive.
The study also found that minority groups are more likely to take action after watching advertisements they felt accurately reflected their cohort.
For example, 69 percent of Black consumers said they were more likely to purchase from a brand who's advertising positively reflects the diverse complexities of African-American culture. Similarly, 71 percent of consumers who identified as LGBTQ said they were more likely to interact with an online ad if it authentically represented their sexual orientation.
Ignoring these underrepresented consumer segments prevents companies from unlocking their massive buying power.
According to a 2018 report from the American Institutes for Research, people with disabilities have purchasing power of nearly $500 billion dollars, while Black Americans and Hispanics have a buying power of $501 billion and $582, respectively.
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