Written by: Kerry Wong
It has only been a little over six months since the year started, but 2020 has exceeded all reasonable expectations. Continuing from 2019, the devastating Australian wildfire was the first large scale crisis of 2020 that dominated the world's attention. Shortly after that, WHO officially declared Covid-19 as a pandemic and countries began implementing various forms of lockdowns to contain the spread of the virus.
The magnitude and speed of collapse in activity subsequently caused the world economy to suffer, and both the International Monetary Fund (IMF) and the World Bank have since issued statements that the world is facing its worst economic downturn since the Great Depression in the 1930s. There has also been a movement against police brutality and discrimination across the globe. Honestly, it feels like 2020 is an insanely tricky hidden level I stumbled upon in a game, with boss characters popping up one after another and I am neither equipped nor prepared.
In this article, I want to explore the impact of the recent events on millennials and Gen Z as consumers through my perspective as a millennial.
Economic Downturn and Change in Spending Behaviour
As the world is collectively suffering a severe recession, the global unemployment rate has soared within the past few months. Accounting for a third of the workforce and falling within the younger end of the spectrum, millennials and some GenZs are, unfortunately, the disproportionate holders of the kind of positions disappearing the fastest. On top of that, as most millennials began entering the workforce around the time of the previous financial crisis, most were unable to accumulate wealth and gain the financial security the previous generations enjoyed. As job security is uncertain, millennials are now more likely than ever to be careful with their spending. While they are known to be willing to splurge more on conveniences and comfort, non-vital or impulse purchases should significantly reduce as priority will be focused on surviving and prepping for the unknown.
However, that does not mean that they would entirely give up on all conveniences and comfort. Besides deciding whether a purchase is necessary and the price is justified, millennials and GenZs will likely be more selective with who they decide to do business with as well, especially if there are similar products with similar price points from multiple companies. According to the 2019 Deloitte Global Millennial Survey, millennials and GenZs tend to speak with their wallets. They are willing to start and stop relationships with a business for very personal reasons. The figure below shows some of the reasons why they have started or ended a business relationship.
Source: Figure 9 – Deloitte Global Millennial Survey 2019
As storytelling is becoming more prevalent and used to engage consumers, a product or service is no longer seen as a standalone offering, and younger consumers are now considering all aspects of the company. They understand that if they want companies to change, the best way to do so would be to stop their relationship and hit the companies where it hurts the most, their bottom-line, as continuous buying would only reward the behaviour and perpetuate the situation.
Heightened Sense Of Responsibility Towards The Environment And Society
As can be seen in the figure below, the top personal concerns for both Millennials and Gen Zs is climate change and protecting the environment. With the loss of more than a billion individual animals and thousands of native flora during the Australian wildfire and the heart-breaking imagery and videos shared across the internet, millennials and GenZs are likely to be more concerned about the environment than ever. It is also not comforting that we seem to come across more record-breaking climate phenomena every year, such as "Hottest-Ever Year for The Planet's Atmosphere" or "UK's Wettest February On Record Since 1862".
Source: Figure 2 – Deloitte Global Millennial Survey 2019
In a survey conducted by YPulse pre-pandemic, 54% of the respondents said that they regularly worry about climate change and 67% of them said that they had already changed some of their behaviours because of it. Even as the pandemic and quarantine are ongoing, young activists are bringing climate strikes and protests online, and many are still having discussions about it. They obviously will not be forgetting about it anytime soon, even in a post-pandemic world.
Besides climate change, millennials also believe that businesses have a responsibility to improve the livelihood of their employees and improve society, on top of running the actual business. The figure below provides some statistics on how millennials perceive companies. As we have observed how the tragic death of George Floyd has sparked a global movement against police brutality and social injustices, it shows that not only are millennials and GenZs active and vocal about issues directly impacting them, but they are also willing to engage on behalf of people who cannot do so for themselves. Growing up with the internet, millennials and GenZs have had access to different viewpoints, cultures, and resources from a much younger age, which have allowed them to be more fluid in the way they perceive the world.
Source: Figure 4 – Deloitte Global Millennial Survey 2019
What Should Businesses Do?
First off, it would be a good exercise for a company to evaluate their values, internal processes and see whether it aligns with the priorities of millennial and GenZs. Assuming that a company have evaluated their values and internal processes and made any necessary updates or changes, the next step would be for the company to communicate it to the public. At this stage, companies can incorporate some gamification to engage the consumer further and motivate them to select their company over their competitors.
The 2 core drives of gamification I would be touching on would be Epic Meaning & Calling and Social Influence & Relatedness. Epic Meaning & Callingis the Core Drive where a person believes that they are doing something greater than themselves or they were "chosen" to do something; while Social Influence & Relatednessis the Core Drive that incorporates all the social elements that drive people such as mentorship, acceptance, social responses, companionship, as well as competition and envy.
An example of a business that has incorporated both core drives in their brand is Body Shop. By announcing and promoting their various endeavours such as their "Forever Against Animal Testing" campaign and "Community Trade", their commitment to trade fairly with suppliers and ethically source ingredients, they have essentially attached a world mission, an epic calling, to their products. In an industry where these are common issues, which some people are genuinely against and concerned about, the idea that buying your skincare products from Body Shop will help support the community is extremely motivating.
Besides that, as social creatures, we are very much influenced by what our peers feel and think about us. When we perceive a behaviour to be a widely accepted social norm, we tend to have a stronger urge to do the same as we want to be part of it. Referring back to Body Shop, if more people around you start using the products, and talking about the causes and impact it has on society, it will create a compelling situation that will motivate you to look into the brand as well.
However, with that said, while gamification can assist with getting a consumer engaged and more motivated to check out your brand, if your product is of bad quality or you were not transparent and honest, millennials and GenZs will call the bluff and walk away. Companies need to walk the talk.
Stay tuned for my next article as I will be exploring the impact of the recent events on millennials and Gen Z as employees.
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