The Next 10 Million Consumers: Who? What? Why?

Ramesh Shanmuganathan, an Executive Vice President and Group CIO at John Keells Holdings (JKH), and Chief Executive of John Keells IT, says generational distinctions in tech usage and consumer behavior are becoming increasingly pronounced.

The Millennials, or Generation Y, born between the early 1980s and mid-1990s, witnessed the remarkable transition from traditional media to the digital age. These individuals are tech-savvy, constantly plugged in, and have a penchant for convenience in their consumer choices. Following them, Generation Z, those born from the mid-1990s to the early 2010s, have never known a world without the internet. For them, authenticity is paramount, and their world revolves around mobile devices, leading them to demand seamless mobile experiences.

But the digital landscape doesn’t stop evolving. Enter Generation Alpha, the cohort born after 2010. Even though they’re still quite young, they’re already showing unique digital habits. Technology isn’t just a part of their lives; it envelops them. From their education to their entertainment, the digital realm plays an integral role. They’re growing up expecting experiences to be tailored specifically for them, paving the way for more personalized digital platforms.

In this interview, Shanmuganathan looks to the horizon for the next 10 million consumers who will likely have some shared traits despite their generational differences. They’ll be fluent in technology, irrespective of the device or platform, and will prioritize digital connectivity. Moreover, as global environmental concerns become impossible to ignore, these consumers will likely be acutely sustainability-conscious. However, differences will inevitably arise. The pace of technological adoption might vary, and each generation will have its unique communication preferences, cultural influences, and responses to societal shifts, Shanmuganathan posits.

He points out that for businesses and brands, technology stands as the bridge that can connect them to these varied generations. It’s not just about being present online but about harnessing the potential of technological advancements. With tools that allow for better personalization, an omnichannel presence that respects platform preferences, user-friendly interfaces, and continuous innovation, companies can cater to the dynamic and evolving needs of different generations. By understanding and embracing these shifts, businesses can continuously engage and resonate with their target audiences, ensuring sustained success in a world where change is the only constant.

Excerpts of the interview are as follows:

We talk of these various generations of consumers, including Gen Y, Gen Z and Gen Alpha. These generations are not all the same. In terms of their approach to technology and consumerism, how do they differ?

We need to remember when we talk to Gen Y, Gen Z and Gen Alpha that individuals within each generation can have diverse traits and preferences and a blend of these as well depending on their values, beliefs, exposure, knowledge, biases, affinity, etc. However, some general trends distinguish how different generations approach technology and consumerism based on broadly accepted parameters and they tend to be based on the following:

1. Generation Y (Millennials): Born between the early 1980s and mid-1990s, Millennials grew up during the rapid advancement of technology. They were early adopters of social media and experienced the transition from traditional media to digital platforms. Key traits include tech-savviness: Millennials are comfortable using technology and are quick to embrace new gadgets and digital platforms.- Digital connectivity: They value staying connected and use technology for socialization, online shopping, and accessing information.- Convenience-driven: Millennials appreciate convenience and tend to prioritize efficiency in their consumer choices
2. Generation Z: Born between the mid1990s and early 2010s, Generation Z is the first generation to grow up entirely n a digital age. Here are some notable characteristics:- Digital natives: Gen Z is highly proficient with technology, having grown up immersed in smartphones, social media, and streaming services.- Authenticity seekers: They value authentic experiences and transparent brand messaging. They heavily rely on peer recommendations and user-generated content for purchasing decisions.- Mobile-focused: Gen Z prefers mobile devices for communication, entertainment, and shopping, demanding seamless mobile experiences from brands.
3. Generation Alpha: Born after 2010, members of Generation Alpha are still young but already showing unique tendencies shaped by technological advancements. While their preferences are evolving, some observations include:- Tech immersion: Generation Alpha has been surrounded by technology from an early age and tends to be comfortable with various digital devices.- Customized experiences: They expect personalized experiences tailored to their interests and preferences.- Digital learning: Technology plays a significant role in their education, with virtual learning tools becoming more prevalent. It’s important to note that these generalizations are not definitive, and individual differences always exist within each generation. Factors like cultural background, socioeconomic status, and personal experiences also influence consumer behaviours.

Each generation, from Gen Y (Millennials) to Gen Z and Gen Alpha, exhibits distinct characteristics in their approach to technology and consumer behaviour. Millennials, being the first to grow up with modern technology, value authentic brand messaging and seek out brands that support social and environmental causes. They rely on user-generated content and appreciate word-of-mouth advertising.

Generation Z, the most diverse and tech-savvy group, places importance on financial stability and heavily relies on social media for reviews and recommendations. They engage with brands that utilize social selling techniques and are open to influencer recommendations, especially on platforms like Instagram, YouTube, and TikTok.

As for Generation Alpha, the youngest generation, they are true digital natives, growing up with even more advanced technology. They own tablets and are influenced by social media, which can also impact their parents’ purchasing habits, particularly in the food and drink sector. In the future, they will likely expect frictionless experiences across all touchpoints, seeking immersive and interactive content such as augmented reality and virtual experiences.

Understanding these distinctions is crucial for businesses to tailor their marketing strategies to each generation effectively. Millennials respond well to socially responsible and authentic content, while Gen Z favours personalized experiences and social media engagement. For Gen Alpha, brands need to anticipate their needs and offer relevant, immersive experiences to capture their attention and loyalty.

What will the next 10 million consumers have in common across the generations? And how will they be different from each other?

It’s difficult to predict anything with certainty today given the VUCA world that we live in. But, we can predict the characteristics that will influence their behaviour across generations and we can make some educated assumptions based on current trends and emerging technologies.

Here are some potential commonalities and differences they might have. Let’s start with the commonalities:

1. Technological fluency: Given the continuous advancement of technology, the next 10 million consumers will likely have a high level of technological fluency and adoption across generations. They will be comfortable using various digital devices and platforms for communication, entertainment, and shopping.
2. Digital connectivity: Similar to current generations, future consumers will likely prioritize digital connectivity and expect seamless online experiences. They will rely on technology for socialization, information access, and connecting with brands.
3. Sustainability consciousness: As environmental concerns continue to grow, future consumers may have a heightened awareness of sustainability. They may prioritize eco-friendly products, demand transparency from brands in their sustainability efforts, and support companies that embrace responsible business practices

And the Differences:

1. Technological integration: The specific technologies and methods of technological integration may vary among generational cohorts. Older cohorts within the next 10 million consumers may adopt technology at a different pace or prefer familiar channels, while younger cohorts may embrace more innovative technologies that emerge in the coming years.
2. Communication preferences: While digital communication will likely be prevalent across all generations, the preferred platforms and formats might differ. For example, older consumers may maintain a preference for email or phone calls, while younger consumers may favour messaging apps or social media platforms.
3. Cultural influences: Each generation is influenced by unique cultural trends and experiences. Future consumers will exhibit diverse cultural backgrounds, which can shape their preferences, values, and consumer behaviours. Factors such as geography, ethnicity, and socioeconomic status may influence their consumption patterns differently.
4. Shifting societal trends: Future generations will also be influenced by evolving societal trends and norms. These trends could include changing attitudes towards work-life balance, diversity and inclusion, mental health awareness, and the role of technology in daily life.

It’s important to note that these predictions are speculative and subject to change as new technologies and social dynamics emerge. Future consumers will undoubtedly have their unique characteristics and preferences, driven by ongoing advancements in technology, changing cultural landscapes, and evolving societal values.

If the generations are so different from each other how crucial is the role technology plays in helping companies build a winning proposition?

Technology is the key differentiator and plays a pivotal role in helping companies build a winning proposition that can appeal to diverse generations using Data and AI to create personalized experiences at best. This needs a focus on a broader spectrum of technology to enable organizations to mature and be able to do that and let me delve into those.

1. Personalization: Technology allows companies to gather customer data and leverage it to create personalized experiences. By collecting information on individual preferences, browsing behaviour, and purchase history, companies can tailor their products, services, and marketing messages to specific generational segments. This level of personalization enhances the overall customer experience and makes the proposition more compelling across generations.
2. Omni-channel presence: Different generations have varying preferences for how they engage with brands. Technology enables companies to establish an omnichannel presence, providing customers with multiple touchpoints to connect with the brand. This includes physical stores, e-commerce websites, social media platforms, mobile apps, and more. A seamless experience across these channels ensures that companies can reach and engage customers from different generations in their preferred way.
3. User-friendly interfaces: As technology continues to evolve, user-friendly interfaces become increasingly important. Companies should invest in intuitive and easy-to-use software, mobile applications, websites, and other digital platforms. An interface that is accessible, optimized for different devices, and delivers a smooth user experience can make a substantial difference in attracting and retaining customers across generations.
4. Innovation and convenience: Technology-driven innovation can help companies create new products, services, or business models that cater to the evolving needs and desires of different generations. For example, subscription-based models, on-demand services, or smart home devices have gained popularity by providing convenience and efficiency. By understanding generational trends and utilizing technology, companies can identify opportunities to develop innovative solutions that address changing customer demands.
5. Continuous engagement: Technology facilitates ongoing customer engagement through various digital channels. Companies can use social media, email marketing campaigns, mobile notifications, chatbots, and personalized content to stay connected with customers across generations. Through regular communication, companies can build brand loyalty, gather feedback, and make improvements based on customer insights.

Ultimately, leveraging technology to build a winning proposition requires a deep understanding of the target audience and their preferences, across the generations, as well as an agile approach that adapts to evolving technologies and generational dynamics. By embracing technology strategically, companies can create innovative, personalized experiences that resonate with different generations and drive long-term success.

Digital commerce and digital services are areas of growth. How will the behemoths of each of these areas and specifically retailers and banks have to adapt?

The world will continue to evolve at an exponential pace and digital commerce and digital services will have to keep pace and have to disrupt themselves and recreate themselves to stay relevant. To stay competitive in the ever-evolving landscape, behemoths in industries like retail and banking will need to disrupt themselves or perish.

Ways in which the Retail sector could stay relevant are::

1. Embrace omnichannel strategies: Traditional retailers need to embrace a seamless omnichannel approach that combines physical stores with online platforms. This includes offering features like click-and-collect, same-day delivery, and returns/exchanges across channels. By integrating their physical presence with robust online platforms, retailers can provide convenience, flexibility, and a personalized shopping experience across all touchpoints.
2. Enhance online experiences: Behemoth retailers must prioritize creating exceptional online experiences. This involves investing in user-friendly websites, mobile apps, and digital tools that offer intuitive navigation, personalized recommendations, and optimized search functionalities. Features like virtual try-ons, augmented reality (AR), and artificial intelligence-powered chatbots can further enhance the online customer journey.
3. Leverage data for personalization: Retailers should harness customer data to deliver personalized experiences and targeted marketing campaigns. By analyzing customer preferences, purchase history, and behaviour through advanced analytics, retailers can offer customized product recommendations, personalized promotions, and tailored content that resonates with individual customers.
4. Expand into new marketplaces: Behemoth retailers should explore opportunities beyond their core markets by partnering or expanding into emerging digital marketplaces. These include popular e-commerce platforms, social media networks with shopping capabilities, and online marketplaces focused on specific niches or regions. By diversifying their presence, retailers can reach new customers and tap into growing consumer segments.
5. Focus on sustainability and social responsibility: As consumer awareness of environmental issues and social responsibility grows, retailers need to align their strategies accordingly. Behemoth retailers should prioritize sustainable practices in their operations, supply chains, and product offerings. They can also engage in corporate social responsibility initiatives and communicate their efforts transparently to gain the trust and loyalty of socially-conscious consumers.

Similarly, in the banking sector:

1. Develop seamless digital banking experiences: Banks should invest in user-friendly mobile apps, online banking platforms, and digital tools that provide seamless and secure financial services. These include features like instant fund transfers, real-time updates on account activity, and easy access to financial planning tools. Prioritizing user experience is crucial for attracting and retaining tech-savvy customers.
2. Embrace FinTech partnerships: Behemoth banks can benefit from collaborating with FinTech startups to leverage their innovative technologies and capabilities. This can include offering digital wallets, peer-to-peer payment solutions, or robo-advisory services. Partnering with FinTech companies allows banks to speed up digital transformation efforts, enhance customer experiences, and tap into new revenue streams
3. Invest in cybersecurity: As digital services expand, banks must prioritize robust cybersecurity measures to protect customer data and transactions. Behemoths need to stay up-to-date with the latest security protocols, employ advanced encryption algorithms, and continuously monitor for potential threats. Customers expect their financial information to be safeguarded, and any breach can have severe consequences on their trust and loyalty.
4. Leveraging data analytics: Similar to retailers, banks can utilize advanced data analytics to gain insights into customer behaviour, preferences, and risk profiles. By leveraging this data, banks can provide personalized financial advice, custom-tailor product recommendations, and detect fraudulent activities more effectively. Data analytics also help banks identify trends and patterns that inform strategic decision-making.
5. Enhancing customer support: Investing in digital support channels such as chatbots with natural language processing capabilities and self-service portals enables banks to provide convenient, 24/7 customer service. Additionally, integrating human support when necessary and ensuring a smooth transition between digital and human interaction is vital for addressing complex queries or building long-term relationships with customers.

By embracing technological advancements, focusing on personalized experiences, and adapting to changing consumer expectations, behemoths in retail and banking can ensure their relevance in the digital commerce and digital services sectors.

What factors will influence commerce in the Metaverse? Will we all be conducting transactions in the metaverse anytime sooner?

It’s difficult to predict the exact future of transactions in the metaverse, there is a growing interest and exploration of virtual currencies and digital assets within virtual worlds. However, several factors will influence the widespread adoption of metaverse transactions within the next five years:

1. Technological advancements: The development of secure, scalable, and user-friendly blockchain and virtual currency platforms is crucial for enabling seamless transactions within the metaverse. Advancements in augmented reality (AR) and virtual reality (VR) technologies are also essential for creating immersive virtual environments that facilitate realistic and engaging commerce experiences.
2. Regulatory environment: The regulatory landscape surrounding virtual currencies, blockchain technology, and the metaverse is still evolving. Governments and regulatory bodies need to establish frameworks that address issues like consumer protection, financial security, identity verification, and taxation. Clear regulations can provide confidence to businesses and users when conducting transactions in the metaverse.
3. User adoption and trust: The mass adoption of metaverse transactions would require a significant shift in consumer behaviour and trust. Users need to feel confident in the security, reliability, and value of virtual currencies and digital assets. Building trust through transparent governance models, strong security measures, and user-friendly interfaces is critical for driving adoption.
4. Interoperability and standardization: For seamless metaverse transactions, interoperability between different virtual worlds, platforms, and currencies is necessary. Standardization efforts that allow for cross-platform compatibility and easy transfer of digital assets will simplify transactions and encourage broader participation.
5. Economic incentives: Creating compelling economic incentives for users to engage in metaverse transactions can drive adoption. These incentives can include rewards programmes, loyalty points, exclusive virtual items, or unique experiences that can only be accessed through metaverse transactions.

By providing tangible benefits, businesses can stimulate demand and incentivize users to participate in virtual commerce. While the metaverse holds immense potential, the timeframe for widespread adoption of metaverse transactions depends on how quickly these factors can be addressed. Some industries and communities may adopt metaverse transactions more rapidly than others, with varying levels of integration depending on factors such as technological readiness, consumer demand, and regulatory frameworks.