Consumers of Tomorrow Insights and Observations About Generation Z
Consumers of Tomorrow Insights and Observations About Generation Z
Consumers of Tomorrow Insights and Observations About Generation Z
November 2011
Executive Summary
Overview Behavioral Traits Marketing Implications
Source: Grail Research Analysis
November 2011 | Copyright 2011 Grail Research, a division of Integreon
Generation Z is commonly defined as people born between the mid 1990s and 2010. They are also known as Digital Natives
Generation Z is Comfortable with and even dependent on technology, having grown up in a digital world where technology was ever-present Constantly multitasking with a variety of online products and sophisticated electronic devices, and appreciates simple, interactive designs
More socially responsible, due to greater access to a large online information pool they are
more acutely aware of modern day challenges such as terrorism and climate change
Always connected, communicating through various social networking channels, often across
countries and cultures which significantly influences their decision process
Adopt technology-based marketing and sales channels such as text messages (SMS),
mobile Internet, social networking portals, etc.
Aim to catch them young (especially relevant for technology companies) Enhance their virtual world presence with online product information and purchase facility Develop high value-for-money products that are multifunctional with simple and interactive
designs
Provide green products and services or take a proactive stance toward the environment
Each generation is characterized by different experiences that shape their perspectives and behavior
Generation Z includes people born between the mid 1990s and 2010, characterized as Digital Natives
Generation Terminology by Birth Year
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2025
Baby Boomers
Divided into Hippies and Yuppies, they were raised by the Builders
Generation X
Also known as Latchkey Kids, they were raised by the early Baby Boomers
Generation Y
Also known as the Millennial Generation, they were raised by the late Baby Boomers
Generation Z
Also known as Digital Natives, they are being raised by Generation X
Generation Alpha
Likely to be Google Kids
Born into a
world newly emerging from widespread economic slowdown
Expected to be
more techsavvy, educated, and materialistic than previous generations
Characterized as idealistic
and competitive
November 2011 |
Design Matters
Social Responsibility
Constant Connection
November 2011
Competingfor Attention
Design Matters
Social Responsibility
Constant Connection
The world for Gen Z is digital and the accessibility of technology has made them overly
dependant on it for many activities ~20% girls ages 12 and under regularly visit online shopping sites; 13% of girls regularly purchase products online, regardless of their age; and 35% of girls ages 12 and below own a portable gaming device2 In a global survey, Gen Z rejected traditional TV over streaming Video-on-Demand (VOD). In addition, PCs (51%) and mobile phones (43%) were ranked more important devices than TVs (3%)3
Technology has also impacted the way that Gen Z learns. According to a study by Habbo
Hotel, the worlds largest virtual community for teens, 43% prefer the digital approach and find it easiest to learn from the Internet. 38% like combined learning from print and online; and only 16% state books as their preferred way of learning
Source: 1Kids to Santa: We Want an iPad for Christmas, Nielsen, Oct 2010; 2Global Survey on Gen Z Girls' Reveals Digital Behavior by Stardoll and Carat Network; 3Generation Z rejects traditional TV, Value Partners; Apples iDevices Top Christmas Wish List in Duracell Toy Report, News Articles; Grail Research Analysis; McCrindle Research; Mashable.com
November 2011 | Copyright 2011 Grail Research, a division of Integreon
Design Matters
Being adept media multitaskers, Generation Z has a desire for multifunctional devices with designs that are both simple and interactive
Competingfor Attention
Design Matters
Social Responsibility
Constant Connection
Gen Z prefers media that is simple to use and interactive Notebooks and touch screen devices such as iPads appeal to
children due to their size and simplicity
Interactive, stimulating activities are favored in contrast to passive TV There is a trend toward simple, clean interfaces such as Rediff,
a popular Indian internet portal, which has no advertisements on its homepage and only eight icons Ranked #10 on Alexa Traffic in India, Rediff has a significant number of young visitors, with
24% of its total customer segment consisting of women and children
Multi-purpose functionality is
essential and consumers are willing to pay a premium if the product provides more than one benefit
Gen Z are avid multitaskers and desire products that allow them to do multiple things with
one device Social platforms such as Tumblr allow users to post (text, photos, links, audio, video, slideshows, etc.) easily to their own customized blog, Twitter or Facebook accounts using one simple application Tumblrs unique monthly users grew from 4.2MM in Jun 2009 to 14MM in Jan 2010
Devices which have educational features to enhance childrens knowledge and skills are
favored by kids and parents
Consumers are willing to pay a premium for devices that provide them with a wide range of
functionality such as the iPhone (starting at $649 without carrier contract) and iPad (starting at $499)
Source: Global Survey on Gen Z Girls' Reveals Digital Behavior by Stardoll and Carat Network; Company's websites; Amazon; Nextag; Target; Kids to Santa: We Want an iPad for Christmas, Nielsen, Oct 2010; Apples iDevices Top Christmas Wishlist in Duracell Toy Report, News Articles; Grail Research Analysis
November 2011 | Copyright 2011 Grail Research, a division of Integreon
Social Responsibility
Generation Z was born into an environmentally conscious world, and with greater exposure to a wide range of resources, they are expected to be more socially responsible
Behavioral Traits and Trends
Competingfor Attention
Design Matters
Social Responsibility
Constant Connection
Globally, teens, along with their families, are changing their purchasing behavior towards
choosing environmentally responsible products and companies About 75% of teens in Singapore stated that they care whether their family is purchasing green products. In addition, two in three said they recycle as much as possible and more than half have donated to carbon-offset programs2
61% of Australian teens said that they cared whether their families purchased green
products, and 70% actively make an effort to reduce energy consumption. 97% believe recycling is important and 82% said they recycled as much as possible3
There has been an increase in teen forums and associations targeting environmental
responsibility in the US such as Teens Turning Green, the Dream Green Festival, and KidEarth
Note: 1Survey conducted by Habbo and Greenpeace on ~50,000 teenagers across 18 countries, 2007; 2Survey conducted in Jul and Aug 2011, each of the eight surveys had an average of 1,100 Singapore teenagers, who are registered Habbo users, participating; 3 2009 survey conducted by Habbo on Australian teens Source: News Articles; McCrindle Research; AC Nielsen Company; AsiaONE News; Grail Analysis; Company Profile - McDonalds, Cut Your Footprint; Children of the tech revolution, smh.com.au, Jul 2008
November 2011 | Copyright 2011 Grail Research, a division of Integreon
Constant Connection
The Internet, mobile phones, and social networking sites have made Generation Z more accessible, on a more regular basis, through different communication channels
Behavioral Traits and Trends
Competingfor Attention
Design Matters
Social Responsibility
Constant Connection
This generation prefers communicating through social networks and instant messaging, and
considers email so yesterday Youth SMS is predicted to fall 20% in the next 5 years, due to next generation messenger services (BBM, Weibo, WhatsApp, QQ, etc.)
Emotional attachment to digital habits sustains high online activity According to a study, when children were kept away from social networking devices such as
laptops and mobile phones, 79% of them displayed symptoms of distress2
Note:1Survey conducted by Millward Brown on several thousand kids from more than 70 cities in 15 countries throughout Europe, Asia, The United States and South America ; 2The study was conducted by the University of Maryland on students aged 17-23 in ten countries Source: Global Survey on Gen Z Girls' Reveals Digital Behavior by Stardoll and Carat Network; National Family Week Survey; Generation Z rejects traditional TV by Value Partners; News Articles; Grail Research Analysis
November 2011 | Copyright 2011 Grail Research, a division of Integreon
In 2008, Firefly, a US-based mobile phone company, launched a pay-as-you-go mobile phone service targeted to kids Introduced two exclusive mobile handsets for kids glowPhone for ages 5-8 years, and flyPhone for ages 9-12 years Key features include full color screen, built-in camera, games, mp3 and video functionality In 2009, Firefly ceased partner store sales and moved to online sales only, stating the channel to be more efficient at reaching their
target audience
Many major consumer goods companies such as Pepsi, McDonalds, Apple, and Dell have their own profiles on popular social
networking portals like Facebook, Twitter, and MySpace to connect with the younger generation
These company profiles generally have large member lists (on Facebook, 9,781,626 people like the McDonalds company profile,
692,985 people like the Dell profile, 5,265,685 people like the Pepsi profile and 1,004,339 like the Apple profile), which provides them with a solid platform to promote their new products
Virtual world marketing/avatar-based marketing is a relatively new strategy that companies have adopted: At Neopets.com, a virtual game website targeted at 8-17 year olds, food companies like McDonalds, Nestle and Mars sponsor
various activities to increase their brand visibility with young customers
Habbo Hotel (a virtual teen online community to meet people, play games and create your own online space) provides a platform for
companies to market their products to teen members across the globe
Zynga, the largest developer of social games on Facebook, partnered with Lady Gaga on the launch on her Born this Way album
by providing FarmVille players with a first listen to exclusive unreleased songs
MyCoke.com is a virtual environment to engage teens in interactive activities and encourage them to associate their personal identity
with Coca-Colas brand identity
Source: Is Generation Z Ready for their Close Up?, Elle Girl, Feb 2011; Firefly Mobile's flyPhone, glowPhone target kids, Mobile Marketer, Oct 2008; Softpedia, Oct 2010
November 2011 | Copyright 2011 Grail Research, a division of Integreon
Source: For a new generation, Alpha will be better, The Age, Mar 2010 ; Alpha Generation to be the biggest yet, ABC.net, Mar 2010; Why the future belongs to Apple, Delhi Planet, Mar 2011; Who will the alpha generation copy?, Lifelong Fitness, Apr 2010; Grail Research Analysis
November 2011 | Copyright 2011 Grail Research, a division of Integreon
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11
1996-2000
2001-2005
2005 ~15 2005 Close to 1 Bn
2006-Feb 2010
2009 Over 26 2009 Over 1.8 Bn
Feb 2010 on
Jul, 2010 ~ 29 Jul, 2010 Over 1.9 Bn
Browsers
Feb, 1999 ~30 MM Hotmail users May, 1997 AOL IM launched Jun, 2000 150 MM AOL IM users
Apr, 2010 ~2.9Bn worldwide email accounts 2010 311.2 MM worldwide IM users Feb, 2011 ~ 63 MM MySpace users Apr, 2011 ~630 MM FB users 2010 ~5.3 Bn subscribers 2010 6.1 Tr messages
Instant Messaging
Social Networking
Aug, 2003 MySpace launched Jul, 2005 ~20 MM MySpace users 2004 Facebook (FB) launched
Dec, 2008 ~125 MM MySpace users Feb, 2010 ~400 MM FB users 2009 ~4.1 Bn subscribers 2007 ~2 Tr messages
Note: 1Calculated by multiplying total number of internet users with the market share value; 2Calculated by dividing the total internet explorer users with its market share Source: Grail Research Analysis
November 2011 | Copyright 2011 Grail Research, a division of Integreon
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Baby Boomer parents were very career-oriented More Closely Aligned Family Values
and pushed their children to be high achievers, regardless of their natural inclinations As more women joined the work force, greater financial means and mothers guilt meant children were given more of what they wanted
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14
2005
5 Years 10-15 Years
2010
2020
5-10 Years
Generation Z1
Generation Z2
Generation Alpha
Born into a digital world where alwayson social networking, on-demand entertainment and touch screens were becoming the norm
First truly 21st century generation Likely to be better educated and more
materialistic than previous generations May never know of products and services such as physical storage (cassettes, VHS tapes, floppy disks), dial-up Internet connections, desktop computers (including mouse/keyboard), analog cable TV, and offline music purchases.
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Copyright 2011 by Grail Research, a division of Integreon No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means electronic, mechanical, photocopying, recording, or otherwise without the permission of Grail Research, a division of Integreon