Somewhere in the globe, a working professional in his thirties steps into a Walmart store, searching for breakfast cereals. He whips out his smartphone and logs into a Walmart app. From there, he logs in to the store that he is standing in and locates the stock of the item that he is searching for. He smiles to himself, picks up his purchase and during checkout, leaves a five-star review for the store.
Closer home, we have a traditional watch company – Titan, launching a smartwatch collection to appeal to a younger demographic. Again, many established fashion and lifestyle labels, such as Nike and Puma have launched sub-brands and mini-collections to enhance their trendiness quotient. These are a few examples of how brands are revamping their offerings and operations to attract millennials and Gen Z.
Such is the economic power of the cohort that all consumer-facing brands, including the ones operating in the financial space, are now motivated to create strategies to attract them.
Why are the Millennials & Gen Z important?
Millennials, typically identified as people born between 1981 and 1996, along with Gen Z, the generation born after them, are perhaps the most marquee group of customers for any business today. In 2019, a Bloomberg survey revealed that Gen Z constituted 32% of the world’s 7.7 billion population. If you add millennials, the group’s proportion would swell close to 50%.
The sheer numbers give power to this dynamic cohort across sectors, including the financial space. A study reveals that millennials were largely driving the demand for new loans globally. It also predicted the situation to remain so for the next many years. Gen Z will soon enter that space and may set the tone for the evolution of the next phase.
A unique consumer group
As a consumer segment, the millennials and Gen Z are different as compared to their earlier generations. Millennials are digital and smartphone-savvy. They desire things fast and conveniently. Also, they are a conscious group that cares a lot about environmental and social issues.
Naturally, they gravitate towards brands with a high ESG (environment, social and governance) quotient. On the whole, millennials desire experiences rather than products. Since they are inspired to live in the moment, they see purchase and expenditure as a means of enjoying experiences as opposed to conquest for ownership and acquisitions.
What does it mean for banking & financial brands?
Banks, globally, are often iconic institutions with a robust reputation built on a rich history of service to the public and community. They have left an indelible imprint on communities by helping in their development and progress.
However, to endear themselves to the millennials, the financial entities have to bank on more than an equation of trust that they have created with their customers. They now have to reinvent themselves by offering convenience, a positive customer experience, simplicity and speedy service delivery. Consequently, a great UI/UX (user interface/user experience) on all digital platforms is important to align both the expectations of this cohort. The heritage of trust and integrity can be complemented with a refreshing look, and bold brand aesthetics to deliver an attractive proposition. Moreover, banks have to evolve as partners in the life of their millennial customers to add value to their lives much beyond banking.
Since millennials have a limited attention span owing to continuous exposure to content and information, it’s imperative that brands should communicate through the right digital mediums. Further, by employing suitable influencers, they can create engaging communication to inspire an emotional connect and receive greater engagement. Digital conversations need to be in sync with the latest trends and be attuned to the current reality. Wherever possible, the campaigns have to stroke conversations around the environment, community development, financial literacy, etc.
The next few years may witness newer innovations to balance the expectations of digital convenience with the need to foster authentic and lasting relationships. Rather than a transactional approach, the banking and financial industry will have to adopt a consultative outlook with a heavy accent on technology to engage millennials and Gen Z.