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Understanding Digital-Generation Customers

Mar 3, 2020
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              Financial fluctuations and political unrests in several countries continuing into 2020 have undermined the economic system and consumers’ confidence. Under this changing situation, businesses have to adapt and cope with the threat of being disrupted by competitors, innovations, technology or even consumers’ changing behavior. With this in mind, marketers around the world are now focusing on the consumption pattern of consumers in each generation, especially the Millennials and Generation Z.

              How to Define Generations

              The US-based Pew Research Center has defined Baby Boomers as those who were born between 1946 and 1964, Generation X as those born between 1965 and 1980, the Millennials or Generation Y as those born between 1981 and 1996, and Generation Z as those born between 1997 and 2012. According to Worldometers, the world population is now 7,794 million; 50.4% are men and 49.6% are women. People aged 25-54 years old, which include both the Millennials and Gen X, account for the largest share of the population at 40.59%. Being in the working age, they purchase more than other age groups. Meanwhile, the United Nations indicates that in 2020 Gen Z will have the highest share of the population at 32%, surpassing Millennials at 31.5%. Therefore, understanding behaviors of these two generations, which are the biggest group of consumers, is what every business should not overlook.  


World Population in 2020




Source: https://www.worldometers.info
 
           According to the graph, Asia has the largest population at 59.5%, followed by Africa at 17.2% and Europe at 9.6%. Among Asian countries, China and India have the largest population at 18.47% and 17.70% of the world’s population respectively. They are also the top two countries with the highest number of Millennials in the world.
 
Understanding Each Generation

              Baby Boomers are those who were born in peaceful time after the end of the Second World War, when all countries needed restoration after losing a large number of populations. People in this period tend to have a lot of children to help increasing labor force for country development. The Baby Boomers or Gen B can be characterized as having serious attitudes, following traditions, devoting themselves to work, and being patient and economical. All in all, they are often categorized as “conservatives”.

              Generation X was born in the age of prosperity and has lived comfortable lives in comparison with previous generations. They grew up with the development of video games and computer. The birth rate control began at this time after a rapid increase of population during the birth of Baby Boomers, which resulted in resource insufficiency. Distinctive traits of people in this generation are their preference of everything simple and casual, the concept of work and family balance, the do-it-yourself and independent spirit, as well as uniqueness and out-of-the-box creativity. Different from Baby Boomers, they do not strictly follow traditions and are well adapted to changing culture.

              Generation Y or the Millennials grew up in time of economic growth and received good educational opportunity. Gen Y children are often spoiled so they insist on getting what they want and have their own unique way of thinking. They will only do what they have passion for and refuse what they are not interested in. They are the first generation that learned to use social media as the main tool for daily communication since they were students. They consider social media both as a personal space and a platform to connect with foreign culture. Millennials are heavily influenced by their friends and always fear of missing out. They follow social media posts by their friends and online influencers more closely than other generations. Three out of four reveal that they purchased products after seeing them in friends’ and influencers’ posts on Instagram.  

              Additionally, Gen Ys are highly competent in communication and IT-related work. They are capable of multitasking and thinking creatively.

              Generation Z is becoming the biggest group of the world’s population. They grew up with all kinds of conveniences. Since both of their parents work outside the home, they mainly learn about living in society through online channels. A research found that 44% of Gen Zs check social media on an hourly basis to read the news, enjoy entertainment, and communicate with others. They value independence, freedom and privacy more than previous generations. They also spend most of their time on YouTube, and 95% admit that they cannot live without smartphones. Gen Zs use social media to entertain and be entertained while Millennials use them to share information.  

              Gen Zs often make quick decisions and do not like waiting. They are open to diverse thoughts and culture that they discover through the digital world. They would learn from graphs, infographics, statistics, or short and easy-to-understand information rather than long texts. Having little patience, they frequently change their jobs.
 
Millennials and Gen Z in Gem and Jewelry Industry

              According to Bain & Company’s latest report, the luxury market was worth 1,400 billion US dollars in 2019, growing by 4% despite unfavorable situation. Online channels and secondhand markets are main supporting factors, as well as revised business models, branding development and value-oriented offerings that cater to teenage customers. Chinese customers grew at the rate of over 90%, with luxury products consumption accounting for 35% of the total value in this market. Among luxury products, jewelry and shoes were the top two categories with an equal growth rate of 9%.

              Millennials accounted for 35% of consumption in the luxury market, and their share is expected to increase into 45% by 2025. On the other hand, Gen Z is expected to account for 40% of the luxury market by 2035, with more ready-to-purchase attitude compared to other generations and consistent growth especially in Asia. Gen Zs consider themselves as creative people and regularly communicate with luxury brands, which they will return to if the brands show truthfulness and can emotionally engage with them.

              Over 80% of luxury customers, especially the Millennials, prefer brands that are socially responsible while 60% believe that luxury brands should engage in social issues even more than other industries.

              The secondhand luxury market is worth 29 billion US dollars and is another way for luxury brands to reach new targets and enlarge their customer base. Therefore, luxury brands should develop strategies to capitalize on this opportunity in drawing new customers instead of considering it as a threat.

              China Millennials are playing an important role in China’s and the world’s gem and jewelry market due to the growing middle class and booming economy. They purchase jewelry to show their unique identity unlike previous generations who buy jewelry as an investment. With over 400 million of Millennials or more than 25% of the population, China is a large market with high purchasing power. According to De Beers, 68% of diamond sales in China come from Millennials. However, only 4% of millennial customers buy gold jewelry online; most of them use online channels to search for information before purchasing products at physical shops. Apart from revealing the wearer’s identity, jewelry can also pass stories from the glorious past on to these new-generation customers.

              India is another country where the number of Millennials is rapidly increasing. In 2019, China was the country with the world’s largest population at 1.43 billion people, followed by India at 1.37 billion, accounting for 19% and 18% of the world population respectively. However, the United Nations has estimated that India’s population will surpass China’s in the next eight years, making India the country with the largest population. A report from the Organization Development and Learning Partner also reveals that Indian Millennials account for 50% of the country’s labor force in 2020 and the share is expected to increase to 75% in 2025. According to the American Express, 37% of its cardholders are Millennials, and their spending is rapidly growing; 42% of them spend their money on luxury dining, 38% on luxury products, and 35% on high-end apparel. Their spending on fine jewelry is growing by over 43%. Gold jewelry is still popular among Millennials just like other generations, but they are specifically interested in new designs for daily wearing.

              The Millennial is the main driver of Indian economy. Their familiarity with online channels supports the growth of e-commerce through smartphones. They are also an important part of the growing middle class in India.
 
Reaching Digital Generations with Social Media

              Social media is an online channel being increasingly popular among various generations and has become a new way to reach customers in place of offline channels and traditional marketing tools. As seen in the table below, Millennials mainly use YouTube, Facebook and Instagram at the rates of 88%, 83% and 67% respectively, while Gen Zs tend to use YouTube, Facebook and Instagram, at the rates of 89%, 77% and 74% respectively.

              The popularity of online applications among each generation in 2019 is shown below.



Source: https://www.visualcapitalist.com

              The Millennial and Gen Z are the two largest groups of people in the world today. Both generations can be considered as digital generations as they are savvy internet users who can do research, enjoy entertainment and even build their career online. To penetrate this market, both online and offline marketing is required so that you can develop and broaden your customer base to maintain business growth in the face of economic fluctuations.  

References


1) Defining generations: Where Millennials end and Generation Z begins. Retrieved January 7, 2020. from https://www.pewresearch.org/fact-tank/2019
2) https://www.worldometers.info/demographics/world-demographics
3) Millennials vs Generation Z on Social Media. Retrieved January 6, 2020. from https://www.postbeyond.com
4) The Deloitte Global Millennial Survey 2019. Retrieved January 6, 2020. from https://www2.deloitte.com/content
5) BAIN & CO: GLOBAL JEWELLERY CONSUMPTION GROWS 9% IN 2019. Retrieved January 6, 2020. from https://en.israelidiamond.co.il
6) For Chinese Millennials Jewellery is More Than Sexy Elegance: It’s a Savvy Investment. Retrieved January 8, 2020. from https://luxuryconversation.com
7) Visualizing Social Media Use by Generation. Retrieved January 8, 2020. from https://www.visualcapitalist.com
8) Millennials lead luxury spending growth in India: American Express report. Retrieved January 15, 2020. from https://www.livemint.com
9) https://www.shrm.org/shrm-india/Documents/EMAW8.pdf

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GIT Information Center

Understanding Digital-Generation Customers

Mar 3, 2020
217 views
0 share

              Financial fluctuations and political unrests in several countries continuing into 2020 have undermined the economic system and consumers’ confidence. Under this changing situation, businesses have to adapt and cope with the threat of being disrupted by competitors, innovations, technology or even consumers’ changing behavior. With this in mind, marketers around the world are now focusing on the consumption pattern of consumers in each generation, especially the Millennials and Generation Z.

              How to Define Generations

              The US-based Pew Research Center has defined Baby Boomers as those who were born between 1946 and 1964, Generation X as those born between 1965 and 1980, the Millennials or Generation Y as those born between 1981 and 1996, and Generation Z as those born between 1997 and 2012. According to Worldometers, the world population is now 7,794 million; 50.4% are men and 49.6% are women. People aged 25-54 years old, which include both the Millennials and Gen X, account for the largest share of the population at 40.59%. Being in the working age, they purchase more than other age groups. Meanwhile, the United Nations indicates that in 2020 Gen Z will have the highest share of the population at 32%, surpassing Millennials at 31.5%. Therefore, understanding behaviors of these two generations, which are the biggest group of consumers, is what every business should not overlook.  


World Population in 2020




Source: https://www.worldometers.info
 
           According to the graph, Asia has the largest population at 59.5%, followed by Africa at 17.2% and Europe at 9.6%. Among Asian countries, China and India have the largest population at 18.47% and 17.70% of the world’s population respectively. They are also the top two countries with the highest number of Millennials in the world.
 
Understanding Each Generation

              Baby Boomers are those who were born in peaceful time after the end of the Second World War, when all countries needed restoration after losing a large number of populations. People in this period tend to have a lot of children to help increasing labor force for country development. The Baby Boomers or Gen B can be characterized as having serious attitudes, following traditions, devoting themselves to work, and being patient and economical. All in all, they are often categorized as “conservatives”.

              Generation X was born in the age of prosperity and has lived comfortable lives in comparison with previous generations. They grew up with the development of video games and computer. The birth rate control began at this time after a rapid increase of population during the birth of Baby Boomers, which resulted in resource insufficiency. Distinctive traits of people in this generation are their preference of everything simple and casual, the concept of work and family balance, the do-it-yourself and independent spirit, as well as uniqueness and out-of-the-box creativity. Different from Baby Boomers, they do not strictly follow traditions and are well adapted to changing culture.

              Generation Y or the Millennials grew up in time of economic growth and received good educational opportunity. Gen Y children are often spoiled so they insist on getting what they want and have their own unique way of thinking. They will only do what they have passion for and refuse what they are not interested in. They are the first generation that learned to use social media as the main tool for daily communication since they were students. They consider social media both as a personal space and a platform to connect with foreign culture. Millennials are heavily influenced by their friends and always fear of missing out. They follow social media posts by their friends and online influencers more closely than other generations. Three out of four reveal that they purchased products after seeing them in friends’ and influencers’ posts on Instagram.  

              Additionally, Gen Ys are highly competent in communication and IT-related work. They are capable of multitasking and thinking creatively.

              Generation Z is becoming the biggest group of the world’s population. They grew up with all kinds of conveniences. Since both of their parents work outside the home, they mainly learn about living in society through online channels. A research found that 44% of Gen Zs check social media on an hourly basis to read the news, enjoy entertainment, and communicate with others. They value independence, freedom and privacy more than previous generations. They also spend most of their time on YouTube, and 95% admit that they cannot live without smartphones. Gen Zs use social media to entertain and be entertained while Millennials use them to share information.  

              Gen Zs often make quick decisions and do not like waiting. They are open to diverse thoughts and culture that they discover through the digital world. They would learn from graphs, infographics, statistics, or short and easy-to-understand information rather than long texts. Having little patience, they frequently change their jobs.
 
Millennials and Gen Z in Gem and Jewelry Industry

              According to Bain & Company’s latest report, the luxury market was worth 1,400 billion US dollars in 2019, growing by 4% despite unfavorable situation. Online channels and secondhand markets are main supporting factors, as well as revised business models, branding development and value-oriented offerings that cater to teenage customers. Chinese customers grew at the rate of over 90%, with luxury products consumption accounting for 35% of the total value in this market. Among luxury products, jewelry and shoes were the top two categories with an equal growth rate of 9%.

              Millennials accounted for 35% of consumption in the luxury market, and their share is expected to increase into 45% by 2025. On the other hand, Gen Z is expected to account for 40% of the luxury market by 2035, with more ready-to-purchase attitude compared to other generations and consistent growth especially in Asia. Gen Zs consider themselves as creative people and regularly communicate with luxury brands, which they will return to if the brands show truthfulness and can emotionally engage with them.

              Over 80% of luxury customers, especially the Millennials, prefer brands that are socially responsible while 60% believe that luxury brands should engage in social issues even more than other industries.

              The secondhand luxury market is worth 29 billion US dollars and is another way for luxury brands to reach new targets and enlarge their customer base. Therefore, luxury brands should develop strategies to capitalize on this opportunity in drawing new customers instead of considering it as a threat.

              China Millennials are playing an important role in China’s and the world’s gem and jewelry market due to the growing middle class and booming economy. They purchase jewelry to show their unique identity unlike previous generations who buy jewelry as an investment. With over 400 million of Millennials or more than 25% of the population, China is a large market with high purchasing power. According to De Beers, 68% of diamond sales in China come from Millennials. However, only 4% of millennial customers buy gold jewelry online; most of them use online channels to search for information before purchasing products at physical shops. Apart from revealing the wearer’s identity, jewelry can also pass stories from the glorious past on to these new-generation customers.

              India is another country where the number of Millennials is rapidly increasing. In 2019, China was the country with the world’s largest population at 1.43 billion people, followed by India at 1.37 billion, accounting for 19% and 18% of the world population respectively. However, the United Nations has estimated that India’s population will surpass China’s in the next eight years, making India the country with the largest population. A report from the Organization Development and Learning Partner also reveals that Indian Millennials account for 50% of the country’s labor force in 2020 and the share is expected to increase to 75% in 2025. According to the American Express, 37% of its cardholders are Millennials, and their spending is rapidly growing; 42% of them spend their money on luxury dining, 38% on luxury products, and 35% on high-end apparel. Their spending on fine jewelry is growing by over 43%. Gold jewelry is still popular among Millennials just like other generations, but they are specifically interested in new designs for daily wearing.

              The Millennial is the main driver of Indian economy. Their familiarity with online channels supports the growth of e-commerce through smartphones. They are also an important part of the growing middle class in India.
 
Reaching Digital Generations with Social Media

              Social media is an online channel being increasingly popular among various generations and has become a new way to reach customers in place of offline channels and traditional marketing tools. As seen in the table below, Millennials mainly use YouTube, Facebook and Instagram at the rates of 88%, 83% and 67% respectively, while Gen Zs tend to use YouTube, Facebook and Instagram, at the rates of 89%, 77% and 74% respectively.

              The popularity of online applications among each generation in 2019 is shown below.



Source: https://www.visualcapitalist.com

              The Millennial and Gen Z are the two largest groups of people in the world today. Both generations can be considered as digital generations as they are savvy internet users who can do research, enjoy entertainment and even build their career online. To penetrate this market, both online and offline marketing is required so that you can develop and broaden your customer base to maintain business growth in the face of economic fluctuations.  

References


1) Defining generations: Where Millennials end and Generation Z begins. Retrieved January 7, 2020. from https://www.pewresearch.org/fact-tank/2019
2) https://www.worldometers.info/demographics/world-demographics
3) Millennials vs Generation Z on Social Media. Retrieved January 6, 2020. from https://www.postbeyond.com
4) The Deloitte Global Millennial Survey 2019. Retrieved January 6, 2020. from https://www2.deloitte.com/content
5) BAIN & CO: GLOBAL JEWELLERY CONSUMPTION GROWS 9% IN 2019. Retrieved January 6, 2020. from https://en.israelidiamond.co.il
6) For Chinese Millennials Jewellery is More Than Sexy Elegance: It’s a Savvy Investment. Retrieved January 8, 2020. from https://luxuryconversation.com
7) Visualizing Social Media Use by Generation. Retrieved January 8, 2020. from https://www.visualcapitalist.com
8) Millennials lead luxury spending growth in India: American Express report. Retrieved January 15, 2020. from https://www.livemint.com
9) https://www.shrm.org/shrm-india/Documents/EMAW8.pdf

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