For those of us still enduring cold and snow, the start of baseball’s spring training is supposed to signal that we’ve turned the corner and are rapidly approaching warmer days. The lockout delayed things a few weeks, but owners and players finally settled their differences, and the fields will soon be humming with preparations for a new season. Yet one issue that wasn’t addressed in the contract dispute was the game’s struggle with drawing younger generations of fans, who are more turned off than their elders by an increasingly slow pace of play and longer games.
Appealing to the Gen Y and Z demographic is a similar challenge for retailers and other industries with a consumer-brand dynamic. Like baseball, brands must adapt to expectations from younger consumers or risk losing them to irrelevance. In both cases, an abundance of options and shorter attention spans drive a need for change.
Younger Generations of Consumers Expect Control, Personalization
A recent Dynata survey commissioned by Redpoint explored the dynamics of customer loyalty. We broke down the results in a blog that examined how brands should think about developing long-lasting relationships with consumers. There were also key generational divides that clearly showed younger consumers have far higher expectations for the brands they love to evolve with their changing behaviors, and to know who they are on a personal level.
Consider that for consumers 24-34, asked to cite an action that makes them feel understood by a brand, 39 percent said that it is when a brand understands that their preferences change, and they evolve as the customer does. This is a pronounced 2.5x gap between consumers 65-and-over who said the same (15 percent), and nearly a 2x gap for the 55-64 demographic (22 percent). We saw similar dynamics for all age bands grouped into Gen Z and Y (Millennials) generations vs. the older generations.
Exploring more what consumers mean by evolving preferences, the survey asked what drove consumer loyalty to a brand. For the 25-34 crowd, 41 percent said that they are more loyal to brands that offer multiple ways to interact, such as an option to buy online and pick-up in-store (BOPIS). Again, this is a 2x gap for those 65-and-over (16 percent) and an 11-point differential from those 55-64.
Offering new and different ways to interact, then, drives loyalty from younger consumers. The through line is that younger consumers expect brands to understand and cater to what’s important to them – adapting to changes for how and where they shop. One survey result that drives home the increasing need for a personal understanding is a 3x gap between the younger demographic (24-34) and the older demographic (65+) who claimed that a key aspect of loyalty is when a brand effectively customizes its messages “for me” – to include targeted promotions or communications tied specifically to the individual consumer (milestones, achievements, etc.). For younger consumers, this was the second most important driver of loyalty (19 percent), vs. tied for second-to-last for the older consumers (6 percent).
The top driver of loyalty for those 25-34 was when a brand demonstrates that it connects its values to the consumer’s values (36 percent), a 2X gap between older consumers who say the same (18 percent). Finally, as it pertains to a personalized experience, consumers 18-24 are twice as likely to recommend a company that does personalization well as those 65+ (58 percent to 27 percent).
Data Privacy Value Exchange
Shifting gears to consumers’ perceptions about data quality, the survey indicates that online privacy is important across all age demographics.
Younger (25-34) and older (65+) consumers were roughly equal (48 percent vs. 49 percent, respectively) in claiming they feel disrespected when a brand collects its personal data without asking and is not clear about preference management (opt-in, opt-out options). Likewise, 50 percent of those 35-44 and 43 percent of those 55-and-over said they feel disrespected when a brand is not transparent about how it uses their personal data.
Yet there were interesting demographic differences in terms of consumers understanding that their data holds value to a brand. While nearly half (48 percent) of the 65-and-over crowd said they flat out do not want brands to have access to personal data, just 26 percent of those 35-44 held that view.
Drilling deeper, 37 percent of the younger consumers said they’re fine with brands having access to their personal data as long as brands are transparent about its use and that value is provided in exchange for the data. Slightly fewer of those 65-and-over said the same (31 percent).
Strive for the Fences
To sum up the findings, it’s clear that brands do not have the luxury of standing pat and doing nothing on the false assumption that what’s worked in the past will continue to work in the future. Or that what has traditionally mattered to the consumer base – price, product – will remain a constant.
Like baseball, brands need to take an honest accounting of whether they’re being too inflexible, relying on product rather than evolving to compete in an experience economy. When young consumers unequivocally demand a personalized, relevant experience, it’s clear that brands are running out of time to get it right.
In closing, two findings from the survey stand out as far as making this point. Almost half (45 percent) of consumers 35-44 said they would rather purchase from a brand that “knows me” – and will spend more money to do so, a 3x gap over those 65+ (15 percent) and more than 2X among those 55-64 (21 percent). Furthermore, younger consumers are significantly less forgiving of a poor experience. While just 6 percent of older consumers (65+) said they have stopped shopping from a brand after just one bad experience that they or a peer had, 34 percent of those 25-34 said the same.
A relevant, personalized experience does more than put fans in the seats, so to speak. It drives revenue. To remain a player in the experience economy, brands need to “play ball.”