Understanding Gen Z is crucial for brands and retailers

31 January 2019 Consultancy.uk

Generation Z is set to make up a huge proportion of the global consumers in just 10 years. As a result, it is crucial for brands and retailers to understand what makes them tick, if they are to survive shifting tastes among their client base.`

Generation Z or Gen Z is the demographic cohort after the Millennials. There is no precise date for when Generation Z begins, but demographers and researchers typically use the mid-1990s to mid-2000s as starting birth years. Obviously generational divides are relatively arbitrary divides, which need to be taken with a pinch of salt – a Millennial born in 1996 is more likely to share cultural standards with a Gen Z individual born in 1998 than with another Millennial born in 1981, for example – however, broadly at least, taking into account the changing attitudes of young people is essential for the future survival of public and private services.

As the oldest member of Gen Z turns 21 this year, global strategy consulting firm OC&C has conducted an in-depth survey of 15,500 respondents spanning four generations and nine countries to help brands and retailers understand this new and ever-changing generation. As previous generations of consumers inevitably deplete as they advance into old age, Gen Z already makes up 30% of the global population and almost 50% in parts of Africa.

Gen Z prioritise social responsibilitySo what are the differences between an average Gen Z member and a Millennial? At first glance, OC&C’s research demonstrates that the younger generation carries forward a number of common trends established by the Millennials, including socially conscious, experience-led consumption. For a generation which also told researchers they fetishised uniqueness, including 23% saying the ‘uniqueness’ of their opinions was very important, this is somewhat ironic. 

In terms of social attitudes, promoting animal welfare still ranks highly with Gen Z, as it does with previous generations. At the same time, ensuring family members have good opportunities remains a top two priority, albeit with 2% fewer of Gen Z respondents selecting it. Similarly, supporting human rights organisations is the third most important social issue for all generations, though Gen Z is 4% more concerned about the matter. This means the importance of ‘purpose’ in a company’s branding is going to retain its importance moving forward, and will even grow. 

However, in other areas the research also established that there are key trends particular to this demographic, which retailers in particular would do well to tap into. This ranges between everything from attitudes to spending to their outlook on the future. Particularly important for brands and retailers is that as a rule of thumb, Gen Z is generally subject to higher level of influence from celebrities and friends, even as it claims to want to stand out as individuals.

Gen Z’s changing channels for brand discovery

One example of how marketers have cashed in on this paradoxical world-view is the in-play sales system of ITV’s flagship reality TV show, Love Island. During the series, viewers downloaded the Love Island App where they could not only vote for what happened in the show, but shop for and purchase the outfits worn by contestants as they appear on the TV screen. This was made all the more enticing to impressionable fans with options for personalisation, meaning viewers can express their ‘individuality’ by purchasing mass-produced accessories featured on the show such as water bottles featuring their chosen name or message. 

As a whole then, companies looking to engage with Gen Z in the coming years will need to take two key points on board. As they compete for the best talent amid a shrinking labour pool, businesses will need to demonstrate a social conscience to obtain their next generation of workers. At the same time, retailers will need to weigh up new strategies on how best to engage with a new group of consumers digitally, as the influences of social media and viral marketing offer up major opportunities to engage with customers and drive sales growth.

Will Hayllar, Partner at OC&C, commented, “Gen Z is a complicated but vitally important set of consumers for brands and retailers to understand as they will make up a huge proportion of the global consumers in just over 10 years… Their social network is informing decisions and shaping exposure to brands, posing evolving issues for retailers and brands seeking to access Gen Zers. Businesses should take note of their increased consciousness both when supplying products and services but also their ethical standards to attract Gen Zers to their workforce.”

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Branding the modern consultancy: why reputation hinges on it

03 April 2019 Consultancy.uk

The reputation of firms and brand strength remain a key aspect of business in the management consulting industry. Karla Alexander, Brand Manager at Propero Partners, below reflects on the state of reputation management in the consulting industry.

In a time where public perception is enough to make or break a company, the wise are reminded that when it comes to brand and reputation, the strength of one does not necessarily equate with the quality of the other. Nowhere is this more clearly demonstrated than in the impact a spate of recent issues has had on firms that form the backbone of the industry, including KPMG and Grant Thornton.

Such was the damage to KPMG’s reputation last year, that the Bank of England took the decision to investigate its viability following a string of high-profile corporate scandals. Whether or not the sum total of the firm’s track record is enough to restore its image remains to be seen.

This proves that brand and reputation are not only among the most valuable intangible assets – they are also among the most fragile. And their reach extends into the centre of any firm, regardless of its size or market share.

The lesson here for challenger firms and smaller consultancies is two-fold. As well as learning from the mistakes of their peers, it’s also important not to conflate brand with reputation. While they both share the same objective – to win the hearts, minds, and wallets of clients – brand provides the opportunity to differentiate, whereas reputation provides the opportunity to demonstrate credibility. Far from being the same thing, it’s this very difference that binds them together.

Branding the modern consultancy: why reputation hinges on it

Reputation is the driving force behind a person’s decision to award a firm their business, based on values that align with their own – be it honesty, transparency, integrity, accountability. However, none of these characteristics are particularly compelling or distinctive on their own. To carve out key points of difference, to stand out, and to become known, liked, and trusted among a sea of competitors offering similar services, companies should turn to their brands.

Brand is the culmination of culture, vision, values, and identity, which when used consistently and religiously, can create fresh opportunities for firms. People no longer buy services in isolation but look for a purpose or a lifestyle to buy into. Strong brands create an appetite for themselves and command a higher price tag because people will pay for them. The more pulling power and emotional resonance a brand has, the more successful the firm will be.

Protecting a brand

That’s why, regardless of abundant choice, there is still only one Deloitte, one PwC, one EY – and there’s a reason why the Big Four audit nearly 100% of UK’s top 100 corporations. This relentless focus on building and protecting their brands and reputations on the basis of being the best, has, over time, resulted in a market monopoly. However, problems arise when one is given more weight than the other. This point is particularly relevant in the case of KPMG, and in others where firms have flaunted their reputation for being untouchable in the face of the client.

Brand and reputation working together are directly attributable to significant business outcomes (such as financial performance, loyalty, awareness) and should be treated as such. Focus too much on brand and you risk alienating the people who value credibility, such as prospective and existing clients, shareholders, and the best talent. Focus too much on reputation and you risk stagnating in the market, with a service that no one knows or cares about.

In order to overcome these challenges, the first step for many firms will be to take a step back. Before any meaningful work can begin, consulting firms need to assess the current state of their brand and reputation, and establish key characteristics for both. For brand, this might be relevancy, consistency, positioning, identity, and appeal. For reputation, this might be staff turnover, service quality, growth rate, client relationships, leadership, and diversity and inclusion.

Regardless of the findings, there’s always room for improvement. An uptick in the performance of brand and reputation can be achieved by measuring the impact that one has on the other, integrating business and marketing strategies, and setting strict KPIs.

Guardianship and getting results from this activity isn’t the job of one person or one team. People at all levels of the firm should be thought of as brand ambassadors, and should be willing to do what it takes to protect the reputation of the business no matter the cost. After all, everyone benefits when good things are said about a firm when it’s not in the room.

Related: Why building trust and brand belief is key for consulting firms.