By this time next year, Generation Z will outnumber millennials globally, accounting for nearly 32 percent of the population. While millennials have recently been in the spotlight for having unreasonable expectations and supposedly “killing” industries, it’s consumers born after 2000 that are likely to have more of an impact soon.
With the oldest members (ages 18-20) of this massive generation now in the market as consumers, there a few things companies should keep in mind as they try to woo this digital-savvy demographic.
Be prepared for a harsh critic
Younger consumers have never had a reputation for being particularly optimistic when it comes to satisfaction. Gen Z customers appear to be overwhelmingly negative in their response to new products and services; in fact, almost every variable the ACSI measured in 2017, including loyalty and perceptions of quality, proved Gen Z ranked the lowest.
Most notably, these young consumers were 10 percent less satisfied than the Silent Generation, and 4 percent less satisfied than millennials, who have a reputation for being critical consumers. To overcome this trend, companies will need to work harder to prove the worth of their products and services over competitors’ offerings to young shoppers. Growing up with digital conveniences like Amazon and phones that also function as wallets has fostered higher expectations for convenience and value among Gen Z.
Customers that don’t know how to properly complain
Aside from the general negativity associated with Gen Z consumers, an underlying problem is that these consumers often don’t productively complain about their dissatisfaction. Our data consistently shows customers who complain to the provider of a product or service generally have a better experience, in part because they have an opportunity to see the issue resolved and also because they feel their issues are being heard.
Yet, instead of calling or emailing customer service, Gen Z tends to take to social media to express their frustrations. This becomes problematic when consumers tweet or post without tagging or messaging the company directly. Not all corporate structures have the resources to search for and respond to indirect customer complaints on social media. As a result, they have fewer opportunities to address the customer’s experience directly, salvage customer satisfaction, win back the customer’s loyalty, or manage their reputation. Customers, in turn, miss out on a chance for resolution.
For example, earlier this year 20-year-old celebrity Kylie Jenner complained about the newest Snapchat update to her 25.4 million Twitter followers, many of whom belong to Gen Z. The tweet received over 73,000 retweets and 5,000 replies, many of which conveyed the tweeter’s plans to delete Snapchat altogether or to stick to other social platforms until an update was made. In the aftermath of Jenner’s post, Snapchat, Inc. lost $1.3 billion of its market value.
sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.
— Kylie Jenner (@KylieJenner) February 21, 2018
While a single tweet from a celebrity isn’t typically enough to influence satisfaction overall (and we can’t say Jenner’s tweet was solely responsible for Snapchat, Inc.’s stock plummet), the example shows the impact Gen Z could have on company bottom lines.
A problematic generation, or a problematic age?
Before companies across the country redirect their concern over the impact of millennials toward Gen Z, they should think back to being an 18-year-old shopper. The “problem” with 18-20-year-old consumers may not be that they belong to a digital generation raised with more conveniences, but instead that they’re too young to be a well-informed buyer. Perhaps it’s time to consider that this might happen again … and again and again, as each new generation reaches the early stages of adulthood.
Members of the Silent Generation and Baby Boomers tend to be the most satisfied customers because they’ve spent years shopping, which has shaped them into a much wiser customer than they may have been in their late teens and early 20s. More practice in purchasing leads to better habits, including research before buying, which ultimately leads to a higher level of customer satisfaction. They also tend to have more disposable income and therefore less stress associated with each purchase, whereas younger consumers with less income may be more significantly impacted by their purchasing decisions, and could be more critical of companies because of that added burden.
The fact that Gen Z ranks the lowest in satisfaction should still be taken as a warning sign for companies. But before scrambling to please the youngest consumers entering the market time and time again, it’s worth considering that the real answer to achieving satisfaction in the younger generations might be to give them some time.