To stay relevant, companies need to understand their consumers’ and employees’ changing needs and reset their customer strategies.
Since the 2008 global recession, millennials haven’t been buying houses at the same rate as previous generations. Many have chosen to remain with parents or family. If living on their own, they’ve chosen to rent over buying. Often this isn’t a choice, but an economic necessity.
The housing crisis over a decade ago had lasting effects on millennials, gradually shifting their attitudes toward renting versus owning a home. It is no longer the guaranteed investment of generations past. This is a good example of how, in periods of crisis and change, human aspirations and behavior change. Often, for the long-term.
Look out of the home, only as far as the driveway, and there are further examples. Post 2008, monster SUVs, once-popular, suddenly became “uncool.” Taking its place among the most popular cars? The humble, hybrid electric alternative to the ostentatious gas-guzzler.
Once upon a time, it was also viewed as “uncool” to have bought clothes from discount retailers. Now, the majority do. Largely led by the buying habits of Gen X and millennials, buying clothes at a discount is a new norm we’ve all become accustomed to. And in typical fashion, Gen Z has taken it to a new level, even making second hand and goodwill a shopping destination of choice.
These are examples of how a crisis can lead to huge shifts in cultural and societal behaviors. Behaviors that negatively impact some industries, brands, and businesses, but serve as opportunities for others. And I expect to see long-term shifts of the same magnitude, if not more, due to the COVID-19 pandemic.
Our shifting needs during crises
In his Hierarchy of Needs, psychologist Abraham Maslow claims that as humans we naturally prioritize “basic physiological needs” such as food, drink, shelter, as well as “safety needs” achieved through financial and emotional security. These needs are typically met through employment, physical health, and mental wellbeing.
Through the COVID-19 crisis, we’ve already seen human behaviors changing drastically, with people taking a leap towards grasping their most “basic” human needs. Yet meeting these needs requires a sense of order, predictability, and control that has resulted in hoarding and shortage of basic food items and health supplies.
Financial and health concerns are likely to increase as more and more people are either out of work, sick, or both. Mask, hand sanitizer and acetaminophen aren’t the only things in high demand. Gun and ammunition sales are at all-time highs, including many sales to first-time buyers, as people anticipate the social unrest that may come with the unknown ahead of us.
Interestingly, the concerns that are now dominating much of the country, if not the world, were already top of mind among today’s youth. In a recent study we conducted on Gen Z (those born between 1997 and 2008), we found young people’s priorities in the US were personal finances, safety, and their careers. That’s despite them often being seen as a generation that’s idealistic.
Why might this be the case? Well, major events, including crises, shape generations and the longer-term behaviors, attitudes, and lives of our broader societies. As a generation, Gen Z grew up on the heels of the Columbine massacre, 9/11, through the 2008 recession, increased gun violence in American schools, and the mass adoption of the smartphone – giving them instant access to it all through 24/7 news outlets and social media.
As a result, it is little surprise to find that their greatest focus reflects Maslow’s basic needs rather than striving for the esteem and self-actualization needs at the top of Maslow’s hierarchy, often the focus of Millennials and the greater society they influenced.