Many companies are fighting for survival. This is partly due to demographic change, digitization and globalization. And of course the companies themselves. Many of them lag behind. They prefer to fail with old strategies than to dare new ones. It is high time to rethink methods and adapt to the offspring. Exactly: on the generation Z.
According to the Federal Ministry for Economic Affairs and Energy, in Germany alone there will be 3.9 million unemployed people in the labor market in 2030. 2060 even 10.2 million. The skills shortage is a threat to companies. There is a “war for talent”.
Not only as employees, the generation Z young adults are important for companies – even as customers. According to IBM’s National Retail Federation and IBM’s Institute for Business Value, Generation Z, with a purchasing power of $ 44 billion, is a significant audience. In addition, Generation Z is currently the most statistically strong generation. Nevertheless, many companies close necessary changes.
The fact that the success of companies depends on whether they attract young employees and customers is, according to many experts, safe. For Shama Hyder, for example, it is central that companies put young people at the center of their entrepreneurial activities. The 33-year-old founder and CEO of the international marketing and PR agency Zen Media was honored for her achievements by, among others, the US government and the United Nations.
What does the success cost?
To develop a successful strategy and reach Generation Z, companies need to understand their target audience.
Under-30s are regarded as the lost generation for mass media marketing. In the study “Youth Economy”, which appeared in 2015, the Zukunftsinstitut (ZI) cites, among other reasons, the reason that target groups are blurred. “Being young” is now an attribute that lives the whole of society – not just teenagers.
The individualization of society contributes to the fact that today’s young people no longer form a homogenous group. The “Liquid Youth” has temporary interests. Equally erratic is their handling of technology. They are hard to grab. The ZI is confident that the definition of traditional target groups in digitized and individualized times will no longer work.
For experts, however, the target group analysis in practice is an important marketing tool, emphasizes Shama Hyder. “Understanding your audience is the foundation of every marketing strategy, not demographically targeting audiences, but knowing their desires, goals, and communication tools.”
Because it has become so difficult to define a target audience, more and more organizations are basing their decisions on data analytics, says Jay Acunzo, author of the book Break the Wheel and founder of Unthinkable Media. However, this development should be viewed with caution. Although data could provide landmarks, it lacks the human and emotional components of relying solely on them. “In order to find out which goals, needs and desires the target group has, companies must engage in direct dialogue with their consumers,” says Acunzo.
You say A, I say O
The old transmitter-receiver communication does not work anymore. Through the development of social media, the advertising and media industries have changed faster than ever in the last decade.
For Generation Z, printed magazines, television, radio and cinema no longer play the same role as their predecessors. Businesses need to rethink their distribution channels and see social media as an opportunity. Here they can offer young people what they want: interaction and communication in real time.
Another fundamental difference from earlier common marketing measures is the dwindling importance of physical products. Several studies show that subsequent generations are placing less and less emphasis on ownership and status symbols. The Product Economy becomes an Experience Economy. And experiences should be shared with friends and family through social media.
Many companies do not use the potential to lure customers with experiences. This was the study by the National Retail Federation and IBM’s Institute for Business Value. Of the surveyed 13 to 21 year olds, 74 percent said they spent more than five hours of their free time online.
Not even 20 percent of the brands surveyed offered more information about their products online than sheer availability. Even in the physical stores, there is no way to network. A successful concept, for example, has been developed by the French label Sézane. The brand operates a café, a library and a cinema in its Parisian flagship store “L’Appartement”. Sézane is therefore not associated with clothing by young people.
You might also be interested in this: Cracking the “Code to Teens”
On the same wavelength
In addition to communication, another aspect is crucial for the relevance of a company: the values. According to Havas’s “Meaningful Brands 2019”, 77 percent of consumers consume brands that share their values.
“Companies that succeed in young people are not afraid to be responsible for diversity and inclusion,” says Sarah Hall, co-founder of the experimental creative agency Harley & Company in New York. Those companies would place their customers’ physical and mental well-being at the center of all their actions, Hall said. This proves that transparency and social responsibility have become indispensable values.
But not only their marketing strategies have to renew companies, but also their work processes. After all, Generation Z employees demand flexibility. The New Work movement, founded by the American social philosopher Frithjof Bergmann in the 1980s, is therefore increasingly orienting companies and trying to offer their employees more time, space and organizational freedom.
So too InVision. The US design software company employs 800 people in 20 countries. But there is no firm office. The employees work whenever and wherever they want. That works: The glassdoor job placement platform named the company one of the Best Places to Work 2017. Companies like Amazon, Netflix and Airbnb source InVision’s products.
That’s what we stand for!
Companies need to show attitude and values. Especially regarding ethics, sustainability and diversity. The current LEAD Bookazine 2/2019 shows why attitude pays off in marketing! Cases like Recup and Nike make it happen!
Test and learn
Even if InVision and Sézane succeed with their concepts, the solution for other companies is not to copy these strategies one-to-one. “Best practice examples are a possibility, but not necessarily the best solution,” says Jay Acunzo.
The paths to success can not be generalized across sectors or within the industry. Every company is as individual as its target group. That’s why companies should use their time to find the right approach, according to Acunzo.
It helps only to test and to learn from mistakes. However, companies should consider social and demographic trends such as persistent connectivity, the power of social media, increasing individualization, and digitization. Most importantly, you should take the needs of Generation Z seriously and risk change.
You might also be interested in this: “Advertising can no longer lie”
Tanita Hecking is a trainee at muehlhausmoers corporate communications in Berlin. Among other things, the agency manages customer and employee magazines from MAN, TÜV SÜD and Vorwerk.