Issue 133, November 2, 2023
Holding onto next-gen workers and customers (born between 1997 and 2012) requires more than a trick up your sleeve. They are actively changing up the rules of engagement in, and for, organizations of all sizes — whether they are employees or customers. Call them naïve or a brutal force of nature with critical mass, they are redefining the workplace culture and the brand/customer value proposition.
Here’s the key thought: You risk irrelevance when your products and services are viewed by Gen Z simply as commodities. Gen Z and Alpha are pragmatic. They have little loyalty to any one brand. They view brands to serve a purpose, and if the brands fail, they move on. This is not just in context of the consumer culture; it relates to employers, associations, organizations, financial institutions, retailers — any brand they engage with. If you don’t deliver what they want, they will find someone/thing that will. They have choice because they can. And that means the concept and strategy for developing a brand, one that builds loyalty ensuring customers come back time and again or retain their relationship with you, goes out the window.
What is a commodity? A basic good used in commerce that is interchangeable with other goods of the same type. Note the use of the term “interchangeable.” That is how Gen Z sees subscriptions, memberships, products, and services. They aren’t in it for the long term as they are keenly aware of the other offerings in the market that will do just fine in serving them or meeting their needs.
The views of Generation Z and the Alphas close on their heels, who are your current or soon-to-be majority of potential customers and employees, require you to rethink your approach in managing your organization and how you redefine brand management and your customer relationship. That rethink must recognize a shift; staying rooted in past practices, strategies and tactics will lead to undesirable consequences, if not outright failure.
The Next-Gen Lens
Although it sounds like a gross over-exaggeration, next gens really do vote with their values and self-focused needs. But to give this next-gen lens context, consider what their world looks like.
A recent Gallup study found that 51 percent of teens average 4.8 hours a day on social media. And there is a connection between time spent on social to the mental health of young people. There’s more to this story. Teen mental health started to decline between 10 and 15 years ago, not coincidentally when the smartphone hit the mainstream. Many teens use YouTube and TikTok on a daily basis, with 16 to 19 percent of them on the platforms “almost constantly.” Simplistically speaking if it’s not online it doesn’t exist. And that means your brand needs to balance messaging that appeals authentically to next gens while also contending with their necessity to leverage group think. Individual decision-making for Gen Z is uncomfortable and stress-provoking. They seek counsel from their crowd and bend when it advises them on what decision to make. Therefore, you aren’t just trying to influence your one target customer, you are now having to curate the opinion of the Gen Z crowd to ensure they all believe you are a “good” thing.
We’ve all read about social media as a billboard for criticism and bullying. But what’s more insidious, next gens use the platform to present the world with an airbrushed, idealized version of themselves. According to trends analyst Jasmine Gleeshan, “Some teens would do anything to replicate the life of their social media avatar. Snapchat, Instagram, and TikTok filters, and the booming popularity of plastic surgery-obsessed celebrities like Kylie Jenner have created a world where teens feel like they can be anyone they want to be…for a price. The resounding cry for self-improvement echoing across social media carries another implicit message for teens: You’re not good enough as you are.”
So, back to smartphones. In a recent study by Common Sense Media, 50 percent of teens reported feeling addicted to their mobile devices. Glasheen adds, “Gen Z checks their smartphones more often than any other generation. Combine that fact with the exposure that rapid-fire dopamine hits have on their developing psyche and it’s easy to see why next gens are the most likely of any generation to be hospitalized for smartphone overdependence.”
Mental health? She adds, “The extreme consequences of cell phone addiction go beyond body dysmorphia to exacerbate many of the mental disorders you can find in the DSM-5: Depression, ADHD, anxiety, narcissism, and insomnia. These conditions are reportedly worsened by cell phone overdependence. Interpersonal conflicts, low self-esteem, impulsiveness, materialism, and issues relating to peers have also been linked to cell phone overuse.” This is sadly a rather dismal outlook for two generations.
There is another throughline that explains next-gen worldviews: Helicopter parenting. Glasheen reports, “According to The Wall Street Journal, helicopter parenting in the workplace was exacerbated by the pandemic. Many young workers who had been attending school or working in frontline retail positions suddenly found themselves without a source of income or a course of study. Plus, there was a boom in young people moving back into their family homes. The U.S. Census Bureau reports that in 2022, more than half (56 percent) of adults ages 18 to 24 lived in their parental home, along with 16 percent of adults ages 25 to 34. That’s a lot of full-grown adults with parents running the show.”
And this situation has an impact on organizations. Glasheen explains, “Nobody expected the level of parental influence from pathologically independent, future-forward Gen Z. Could it be that the pandemic diminished their ambitions? Considering that this generation came of age during the pandemic, coupled with the Great Resignation you’ve got Gen Zs who are no longer trying to lock down a singular, secure job in a singular, secure company to last them a lifetime. Now add to that the fact that some scientists are giving humans 30 more years of normal life on Earth, if we don’t drastically change our consumption habits. Combine these threads and it’s no surprise that Gen Z is highly is not only aware of this estimate, but also that as Fortune reports, since the pandemic, ‘Gen Z is over corporate America, ladder climbing, and practicality.’” That career track tradition based on an ingrained belief is now at risk. Gen Z transcends the past in how they seek the world. Understanding this attitude is not just a new career path, but also impacts how next gens see organizations in terms of meeting their needs. There is a simple, but harsh practicality: securing them as a customer for the long term is likely not going to happen.
Beyond the psychological issues exacerbated by social, the reality is that with so much choice at their fingertips, next gens can transform their view of a once-beloved brand into a simple commodity. If there is something better, they move on as they find the previous brand no longer relevant. The further challenge is that since they have so many choices, your organization may no longer be on their radar or consideration process as you have already failed them in one way or another. Sadly, their ship has sailed, and you blew your chance.
They are mission and passion-driven, particularly where there is collective energy among their peers. It’s no surprise that Alphas are also called the “viral generation.”
Next gens a have a strong desire for immediate gratification and short-term goal accomplishment contrasted to long-term investment of time and energy. They tend to be brand-neutral, and commodity-focused seeking what they want regardless of a particular brand label.
When it comes to skill acquisition, they tend to gear toward focused training versus general education. Sport, fitness, music, and social influencers are idolized and have significant influence over their lives. Just look at the Taylor Swift phenomenon.
Their desire for greater work/life balance has been widely reported. They work to live, not live to work which is more prevalent among their older generations. And that alone puts pressure on employers to transcend the normal, predictable, and legacy practices.
We have written in The Truth About Transformation how staying relevant directs your future and protects you from becoming a commodity. For example, in the past, your voice may have been authoritative and credible because you were a major brand within your category. That type of scarcity often drives market penetration but in a hyper-digital world, upstart competitors can quickly change the game to make what was scarce ubiquitous. Gen Z and Generation Alpha’s values and beliefs are driving this change. That means dominant brands are no longer the sole source of relevant products, information, or services.
In fact, we’re facing a commodity glut where products, information, and services are so available from so many different sources they have become commonplace. Given today’s digital dynamism and opportunity, the marketplace is full of new competition, forcing business models that were once highly successful to change.
This dilution of brands and saturation of options changed what was once a rich market for one or a few and is now spread across many. Therefore, the revenue potential is more limited, the reach is decreased, and expenses are significantly elevated to acquire customers. Increasingly, organizations may not be able to sustain themselves, let alone grow, by replicating what first made them successful.
Many organizations today, whether formerly successful professional associations, niche publishers, or local retail businesses face the same challenge of remaining relevant in a cluttered marketplace where customers and employees are in control of what they want and where and how they want it delivered. Consumer choice is dictating how organizations need to cater to all stakeholder demands. Increasingly, customers want products and services that are customized to their needs. They also want transparency in the supply chain, authenticity in brand marketing, and organizations to align with their values — including inclusivity and diversity. And employees want the same level of authenticity and transparency.
Reversing the Trend
Look at your organization from your customer’s viewpoint. Is your organizational construct designed to serve your customers? Or to serve your own corporate needs? Customers develop loyalty to your products, services, and brands because you reach them in a unique way and resonate with their own values.
Perhaps Generations Z and Alpha will embrace loyalty as they age, but it seems unlikely. As a society, we haven’t been here before. Digital has truly upended what was and is strongly influencing what is and will come. We suggest the writing may be on the wall that requires new approaches and strategies recognizing being seen as a commodity in a marketplace with so many options and choices.
Digital and new technological opportunities continue to transform society and human behaviors, but that comes at a cost. So, how will you define your organization and your offerings in context of being a commodity? We suggest that you be really, really good at what you do, offering value unadorned with tricky marketing veneer. Be authentic. Be realistic. Stick to the basic purpose and mission of your brand and find the connection point with your current and prospective customers. Come to them wherever they are; do not expect them to come to you. A commodity doesn’t have to be a death knell. Leverage your intrinsic value and position it in terms that next gens appreciate.
Get “The Truth about Transformation”
The 2040 construct to change and transformation. What’s the biggest reason organizations fail? They don’t honor, respect, and acknowledge the human factor. We have compiled a playbook for organizations of all sizes to consider all the elements that comprise change and we have included some provocative case studies that illustrate how transformation can quickly derail.