Consumer Disruption is on the Horizon. Look at Gen Z to See how Leading Edge Consumers (LECs) Reveal Innovation Opportunities.
Disruptive innovation is all the rage – especially disruptions due to technology like block chain or the internet of things. This article goes another direction – it focuses on consumer-driven disruptions by looking at “Leading Edge Consumers.”
Consumer-driven disruptions are important to pay attention to for a couple of reasons. First, an innovation is only as good as the consumers’ willingness to accept it. The innovation junk yard is littered with excellent ideas and superior products that just did not see commercial success because it was an innovation that did not provide a perceived benefit to the consumer. Often new technologies emerge “just because we could build it,” but success depends on understanding and building things that connect to consumers expectations.
The second reason consumer-driven disruption is important to understand is that consumers‘ changing attitudes and behaviors often are exactly what is driving white space in the market and point to new opportunity areas for innovation. Understanding the consumer evolution is important to not only identify where an innovation may be successful, but better pinpoint what that innovation should be.
One of the ways that we try to predict where consumers are going is to look at Leading Edge Consumers (LECs), those people who among the first to try new ideas and help spread the word abou them. Another way is to look at the “consumer of tomorrow.“ Today’s consumer of tomorrow is Generation Z.
Much of the marketing community has spent the better part of the last two decades focused on Millennials – those individuals born between 1980 and 1997, or roughly between the ages of 20 and 37 today. Gen Z is the generational cohort coming up right behind them, born 1998 or later. Right now, we are at an inflection point of many are starting to pivot their focus from Millennials to Gen Z, because this cohort will increasingly be the consumer of the future. What do we already know about this cohort and where do we see potential disruptions?
Millennials had anaolgue childhoods and digital adulthoods. Gen Z, however, is the first truly digital generation. As a result, technology is not viewed as a differentiator for them as individuals. More than two-thirds of Gen Z would consider themselves tech-savvy, but this affinity with technological is not a key part of their identity, as it was with Millennials.
This fact alone speaks to a potential disruption in the marketplace – this is a generation that is not going to be engaged with technology simply for technology’s sake. They are much more pragmatic and as a result more focused on functionality. For example, we see this in their interest in Smart Home technologies. When asking consumers about why they are currently utilizing a monitoring device in their home, 39% of Millennials say “because it is cool & trendsetting” – that number drops to only 13% for Gen Z.
Another area of opportunity and potential disruption stems from Gen Z’s evolving attitudes around security. Coming of age during a more tenuous economic, social and political time, we see that security is more top of mind for these consumers. They index higher on statements such as “I am always concerned about my safety & security” and are more aware of, and concerned about, issues related to privacy.
Lastly, this is a consumer who is more value driven, and less likely to be driven by brands. They are substantially less likely than Millennials to say they like to buy products with prestigious brand names; indeed, they’re less likely to be driven by brand names than Millennials were when they were the same age as Gen Z today.
Looking at Leading Edge Consumers provides insight into the emerging trends and opportunities on the horizon. Pragmatic, security and value-driven and less enamored with brands — these are the traits that are emerging with the consumer of tomorrow.
Kathy Sheehan is Executive Vice President and Global Director, GfK Consumer Life, a global trends service part of GfK, the fourth largest market research company in the world. Kathy teaches a variety of Marketing courses at NYU and sits on the Advisory Board for the Customer Experience Program at Rutgers University. For more information about Kathy, visit GfK Consumer Life or LinkedIn.
