5 Ways Centennials Are Going to Totally Disrupt Your Business … And What You Can Do About It
There’s a new generation on the horizon, one that has the potential to completely change the way retailers do business. It’s not the ever-vilified, oft-studied millennials; they’re (finally) becoming old news.
This next generation, called centennials, was born after 1995 and currently accounts for roughly 25 percent of the population. Contrary to what many retailers assume, centennials aren't just a younger version of their millennial predecessors; they have unique habits, ambitions and values. Their population, growing fast, will soon change the way you do business.
Some basic facts about centennials:
- Centennials comprise a larger population than both millennials and baby boomers. Their numbers will almost double by 2020.
- Centennials have tremendous buying power — estimated around $44 billion and growing.
- Centennials’ attention spans are around eight seconds. That’s shorter than a goldfish.
- Centennials have grown up as children of the Great Recession.
- Centennials are the first truly digital-native generation. They’ve never lived in a world without the internet or social media.
What cultural differences define this generation, and how can retailers adapt to this tidal wave of change? Here are five takeaways to help retailers shape their strategies to reach the centennial customer:
1. Diversity rules: The centennial generation is the most diverse in U.S. history. In fact, centennials recognize diversity not when it’s present, but rather when it’s absent. In our pending study where we ask dozens of centennials questions regarding their consumer behavior, 25 percent of respondents noted they like brands that are "inclusive." Their definition of inclusive is just that. To centennials, being inclusive means not only using models of diverse racial and ethnic backgrounds, for example, but also gender-neutral or gender-fluid models and models representing both straight and plus sizes.
Bottom line: Demonstrate that you understand and embrace centennials’ diversity and uniqueness. Choose to sell products that give them opportunity to fully be who they are. Use models of varying body types, ethnicities, genders (including gender fluid/gender neutral) and ages.
2. Value > price: Since 2000, the multiracial youth population has increased by 50 percent. According to research by Sparks & Honey, children of multiracial, multicultural marriages tend to be ambitious and high achievers with a strong sense of self. They’re pragmatic because they grew up during the Great Recession, they tend to be savers, they’re risk averse and they’re highly focused on value. They’re also extremely committed, both to building something for themselves and also to helping other people. When asked about volunteering, almost all of the centennials we surveyed considered it important, and more than a quarter of them were active volunteers.
Bottom line: Centennials are more pragmatic than previous generations, which impacts how and what they buy. They have high standards, and quality is just important as price. To stay relevant, retailers must acknowledge their demand for value. Additionally, retailers should take note that having a strong social or philanthropic purpose adds value in the eyes of centennials.
3. Centennials don’t want to be spoken to, but spoken "with," and efficiently: Centennials have come of age in a time when creating instructional YouTube videos have made millionaires and Kickstarter campaigns have built empires. They’ve never lived without access to these far-reaching digital platforms, and are used to fully participating in conversations. However, this also means they're inundated with thousands of messages an hour, so their attention spans are short. Don’t assume you’ll have their full attention. In fact, expect that you’ll only have a fraction of it.
Bottom line: Communicate more frequently and in shorter bursts of bite-sized content. Reach centennials through the various social channels they use, and don’t just tell them — build a relationship with them. Interact with them, listen to them and learn from them.
4. Centennials expect technology to enable them, not control them: Since centennials don’t remember a time when they weren’t connected, they have high expectations for technology and how they want to interact with it. They expect technology to guide them forward, rather than stand in front of them and act as a barrier to achieving their goals. They use technology for almost everything, and this reliance means that centennials expect technology to seamlessly and constantly bolster their experiences.
Bottom line: Develop beautifully streamlined customer experiences, without interruptions, that gently guide centennials toward their goals (buying, shopping, learning, teaching) quickly, efficiently, elegantly and playfully. Design your experiences knowing centennials are constantly connected and that your brand is just one of a myriad of options. Win them over by using the information they provide to tailor their experiences and demonstrate that you understand them.
5. Centennials started with mobile, not laptops: This generation is the first to have never lived without a mobile device. Advancements in technology have lead Generation Z to learn technology in an inverted order from that of their older peers: mobile before laptops, streaming before downloading and chatting before email. According to Elijah, a 14-year-old centennial whom we interviewed, “It used to be email, fax, old-fashioned means … now you can send a three-character text to someone and they’ll understand what you’re saying. Whole conversations can be via technology instead of having to meet up in person or over long emails.” (Note how Elijah refers to a very current form of communication as old-fashioned.)
Bottom line: Design e-commerce experiences with a mobile-first mind-set and carefully consider your use (if any) of email. Keep your marketing messages short, informal, reliable, and with instant calls to action or rewards. Catch centennials’ attention — you’re competing for it — by being relatable, unique and concise.
In short, centennials have a distinctive set of cultural differences that's transforming buying behavior. If retailers want to tap into this generation, they’ll need to pay attention.
Genevieve Priebe is a principal with North Highland Worldwide Consulting, leading the Seattle market’s retail practice. North Highland is a global management consulting firm.
Related story: 3 Simple Strategies to Attract Millennials
Genevieve Priebe is a principal with North Highland Worldwide Consulting, leading the Seattle market’s retail practice. She has spent the last 15 years consulting for a variety of companies spanning a broad array of industries with one consistent goal: to build delightful, connected and engaging experiences for clients and their customers. Genevieve specializes in digital strategy and advisory, creating seamless experiences by keeping a relentless focus on the customer. She’s a passionate believer in making complex things simple, boring things fun, and good things even better.
North Highland is a global management consulting firm known for helping clients solve their most complex challenges related to customer experience, transformation, performance improvement, and technology and digital. The employee-owned firm, headquartered in Atlanta adds value and supports clients across the full spectrum of consulting, from strategy through delivery.