The generational shift to Millennial and Gen Z talent is an epoch-defining transition of wealth and power, but also of workload. Younger people are turning their backs on traditional organizational life, and those who entered the workforce in the last two years have no experience of what work was like before the pandemic. As a result, employees are feeling more empowered to demand greater competitive pay and flexibility. They expect to control when, where and how much they work and get paid for. This will lead to new ways of working and greater employee choice across a range of areas — not just whether or not you can work from home.
That doesn’t necessarily mean younger generations want to work less. Some people have used the pandemic years to double down and even work harder. Our Index shows many consumers — especially younger ones — are using working from home as an opportunity to earn more. For example, 32% of Gen Z say they are putting in more hours and 33% have increased their income by working multiple jobs. Younger generations believe working from home can bring benefits for both their employer and employees.
Power isn’t just shifting from employers to employees and from older to younger generations; there’s also a change in the power dynamic between brands and consumers. As people spend more time at home and offline, they are becoming harder to reach than ever.
Brands will need to work much harder to be in the right place at the right time with the right message. Consumers are more discerning than ever, which makes it more difficult to capture and hold their attention — and they are changing the way they engage with brands:
- 59% plan to consolidate shopping trips and shop less frequently.
- 56% will shop more at local, small businesses.
- 61% will only buy from brands that align with their values.
- 61% say they will only visit stores that offer great experiences.
Four imperatives for business
1. Explore new ways to reach consumers
As consumers turn inwards, brands will find it harder to get their attention. Companies must identify and invest in emerging or evolving physical and digital touchpoints, so they are present at the point of need.
This means going a step further to ensure that every potential channel to engage or be visible to the consumer is explored and can be easily integrated into the brand experience. That could range from a personalized, in-store consultation to personalized branded skins in the metaverse.
2. Contextualize your brand experience
Companies need to reconsider the context in which they try to engage the consumer. People’s routines have become increasingly fragmented. Brands must have the digital capabilities to understand the growing range of consumer needs based on contextual indicators and to quickly respond with the right offering.
3. Make it easy to access
In a world where people are consuming less, focusing more on affordability and retreating from engagement opportunities, it’s never been more important to eliminate consumer pain points. If consumer expectations for quick and easy purchases were high before the pandemic, their expectations now of frictionless brand experiences are exponentially higher.
Brands must explore how best to drive stickiness, ensuring consumers are spending the right amount of time in each phase of the consumer journey. However, the actual act of purchasing needs to be simple, quick and easy.
4. Explore partnerships that create collective value
Selling a product to a consumer may get harder, especially on your own, but if you work within an ecosystem of partners, then the path to purchase will become clearer. As consumers become more focused on their holistic priorities, they will seek out flexible solutions that work for multiple needs rather than individual products that serve a specific one. This means that brands can work with other brands and other sectors and industries to come together to reach and meet consumer needs optimally.
To be relevant in the future, companies need to account for these changes, both externally as they engage their consumers and internally in their employee engagement.
Companies need to redesign their talent models, so they can attract and retain people who increasingly value flexibility in their lives. The ability to access the skills the business needs will be more important than simply filling career-oriented roles. Companies that source talent in this way will be more agile as their business needs evolve.
More importantly, the growing consumer demand for competitive pay, purpose and flexibility will increasingly fragment future consumption patterns. People will work in more places, shop in different places — more local to them, not defined by the commute.