Baby Boomers and Gen-X have in common the need to experience life in all it’s glory. Whether that is born out of a sense of adventure, the need for tactile feedback or in the sense of face-to-face social connections, at the core of much of our buying behavior historically has been the need to ‘touch and feel’ a product before a purchase. There’s a subtle shift in this behavior with Gen-Y and Gen-Z/Digital Natives (sometimes collectively called Generation-M or the ‘multi-tasking’ generation) that is critical to understand if you are going to engage this community successfully moving forward, and it emphasizes why the physical store is under increased threat.
In the banking space I’m often confronted with passionate arguments for why face-to-face interactions, why the availability of advice and the psychological comfort of brick-and-mortar spaces still matter. The problem is that those describing these ‘values’ are inevitably Baby Boomers or Gen-X consumers, describing their comfort levels and buying behaviors. There are a number of key trends we can observe today that signify an abandonment of this traditional buying behavior for the next generation of customers.
The psychology of buying is changing
The last 10-15 years has already seen a significant shift in buying behavior as a result of changing distribution models. When the web started to mature and the dot com phenomenon emerged, we saw the first changes in buying behavior around the willingness to buy physical products like software, books and CDs via online stores. Over time this impacted the retail storefront of the book and music industries as less and less people visited physical stores. The argument oft heard, however, was that products like clothes, shoes, electronic goods, etc. still needed a good old storefront interaction. But success of brands like Zappos, Amazon with their broader retail, and the phenomenon of ‘showrooming’ and the influence of mobile in-store is part of a broader behavioral change, a change in buying behavior writ large.
Pinterest, Instagram, Tumblr, and other social networks are all very powerful communication tools for Gen-M. YouTube is their most popular search engine. Their connection to brands is no longer based on a need to touch and feel the product, or to connect face-to-face. Their connection is visceral, but driven by different senses. Generation M have moved from touch and feel, to see and hear as their new connection with brands, and it needs to happen at speed.
Take a Gen-X attending a concert. They go for the experience – to be a part of the event, experience the band live, to be immersed. The Gen-M digital native goes for the experience too, but they’re driven to share photos, video and to extend the experience of the event to their network. Personal connection to the experience is balanced with the need to share and talk about that experience.
The teenage female of the species would gather at the mall in the 80s and 90s to have a retail shopping experience with her friends, the experience wasn’t the purchase alone, but the collaboration, the social connections, the mall experience. They’d find their way as a group in the shopping environment, trends would develop based on what looked cool, what emerged through group consensus. Today that shopping experience is driven collaboratively online through shopping “haul videos”, discussions around back-to-school or spring break fashion and the like. Decisions on fashion choice aren’t driven by that in-mall collaboration or advertising messages, but through online advocacy, connection with the brand via content – not the store.
It’s why videos like this Lady Gaga Makeup Tutorial has 33 million views. No bank has ever got even a fraction of this type of advocacy-based engagement or traffic via YouTube today.
This is why advocacy of brands is such a critical driving force for this new generation of consumers. This is why they think in pictures, why they video themselves, why they check-in and share photos, why Instagram and Pinterest have grown so fast amongst this group. They want to have a visual connection with the product or brand, and they want to hear about the experience of the brand, whether directly from a friend or from a trusted platform such as their social network.
This is how Gen-M connects.
Advocacy is built through seeing and hearing a brand
So when you think about designing the next generation of banking or retail understand that the buying behavior of your core customers over the next decade is dependent on a connection of seeing and hearing what your brand is all about, not touching and feeling the product or brand in-situ, not getting advice or speaking to an expert. No one is a better expert than their friends in a network who’ve already tried your product out. The old concepts of Product, Place and Promotion don’t work in this space. Campaigns have very limited application, because they don’t trigger advocacy well and I’ll always trust my network over a brand message built by an advertiser.
How are your customers connecting with your brand in the see and hear space? Touching and feeling the product is no longer critical. Funneling customers into the store is no longer the best customer experience. Today it’s all about creating a connection with the brand through a product or service that I can advocate and share.
© 2019 Breaking Banks