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THEIMPACTOFGENERATIONSONMARKETINGSTRATEGIES
eMarketing-Strategiesforfuturesuccess
Frédéric Brodeur (439218)
Štefan Huléni (439266)
Étienne Plourde (439345)
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CONTENTS
Introduction ................................................................................................................................ 3
Timetable of generations ........................................................................................................... 4 Veterans ............................................................................................................................................... 5 Baby Boomers ...................................................................................................................................... 5 Generation X ........................................................................................................................................ 6 Generation Y ........................................................................................................................................ 6 Generation Z ........................................................................................................................................ 7
Marketing strategies among different years ............................................................................. 8
Changes of mentality – Information and knowledge ............................................................. 11
How marketing has to change – Information and knowledge ............................................... 13
How generations react to all of these changes – Information and knowledge ..................... 17
Change of mentality – Values .................................................................................................. 19How the marketing has to change – Values ........................................................................... 22
How generations react to all of these changes – Values ........................................................ 26
Changes of mentality – The “now effect” ............................................................................... 29
How marketing has to change – The “now effect”................................................................. 30
How generations react to all of these changes – The “now effect” ....................................... 32
Conclusion ................................................................................................................................ 34
Bibliography ............................................................................................................................. 36
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Introduction
For the first time in history, five different generations with unique expectations,
experiences, generational history, lifestyles, values, and demographics are in the market. As
all these generations are not alike, nor should marketers treat them in the same way.
Accordingly, many companies are reaching out to multi-generational consumers and are
trying to understand and gain the attention of these diverse buyers.
“Multi-generational marketing is the practice of appealing to the unique needs and
behaviors of individuals within more than one specific generational group, with a
generation being a group of individuals born and living about the same time.”1
-W.Morris
Marketers factoring in the different characteristics and behaviors of each generation are more
likely to build relationships, gain trust, and close business. In fact, creating ageless multi-
generational brands is one of the biggest challenges for marketers nowadays.2 Brands should
try to satisfy the needs of people of different ages and to have customers among all
generations, from very young people to pensioners. Down to this fact, an understanding of
multi-generational marketing is now crucial for companies and their marketers.
The purpose of this work is to describe the change in knowledge, values, characteristics,
technology usage and lifestyle of five generations and their impact on marketing strategies
over a few decades. We are going to mention all the generations of people that are living
today, as well as their features and values. In addition to this, we will discuss what influence
various marketing strategies, from Mass marketing in the 60's to the current modern Internet,
and Social media marketing had on them and how they affected each generation. What also
had a massive impact on marketing strategies was the development of technologies that were
available for different generations from rotary phones, radio broadcasting or first television to
modern smartphones, tablets and computers used nowadays.
1 Morris, W. (1982), The American Heritage Dictionary, p. 549. 2 Himmel, B. (2008), “Different Strokes for Different Generations,” Rental Product News, 30(7), pp. 42-46.
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In the second part of the work, we will discuss how knowledge and range of consumer's
information about products has changed in recent years. What effect will this huge amount
of information have on customers buying behavior? Do suppliers know what exactly their
customers want? Is there any way to predict customer's future behavior? As marketers want to
get more and more information about us and our habits, how people among different
generation react to this kind of approach? Are they afraid of losing their privacy?
The third part of this work is concerned with the question - How people's values have changed
in recent years? Are ecological and environmental issues more important for them then in the
past? Do customers think about working conditions of people who are manufacturing their
products? How important is trust in relation with eShops for consumers of different
generations?
In the last chapter, we are going to discuss what “now” effect is and its influence on
consumers of different age. Are suppliers able to fulfill our need of getting every product as
soon as possible or even better within an hour?
These and many other questions about impact of generations on the marketing strategies will
be discussed and answered in the next few pages.
Timetable of generations
Source: Generations by FDU Magazine and Jeane Meister (2008), 2020workplace.com
As there are various sources with different timelines, names and attributes of generations, we decided to use the generation table by FDU
Magazine and Jeane Meister, which is the most relevant. In addition, we made a little correction and divided the last generation (1980+) into
Generation Y and Generation Z as it was mentioned in many other sources and we found it more accurate
Generation Born Today’s age Targeting
Veterans 1922-1945 70-85 Print media
Baby Boomers 1946-1964 51-69 TV
Generation X 1965-1979 36-50 PC
Generation Y 1980-1994 21-35 Internet
Generation Z 1994- present 0-20 Social Networks
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Veterans
Veterans represent the smallest and oldest generation in the market. In some other
sources, you can come across names like Depression Generation or Traditionalists. As
childhood of Veterans was strongly effected by Second World War and Great Depression in
1929, their values are mostly related to saving, rationing, morals, and ethics. Social tranquility
and family togetherness are also crucial values for this generation.3 In terms of their
characteristics, lifestyles, and attitudes, they rely on tried, true, and tested ways of doing
things.4 The most common technology for Veterans were rotary phones, and they are more
likely to read newspapers or watch TV, rather than using computer with an Internet access.
So, what is the best way for marketers to attract people from Veterans generation? First of all,
it is wise to use themes that stress active lifestyle and that break with stereotypical portrayals
of older consumers and “seniors.” They should not be depicted as helpless or dependent on
someone else.5
Baby Boomers
The Baby Boomers, also called Baboo, Love Generation or Sandwich Generation were
born during the dramatic increase of births between 1946 and 1964. They are the largest and
in many cases career-focused workaholics that value optimism, individualization and self-
expression.6 In terms of their characteristics, lifestyles, and attitudes, Baby Boomers are
idealistic and community-oriented people, who always prefer to live by rules. In terms of
technology, Baby Boomers are mostly print media and TV users and not many of them are
active Internet users.
Boomers generation is very attracted to new products and technologies that will make their
lives easier, save them time, and will not rip them off. They are good market for travel,
3 Hawkins, D.I., Mothersbaugh, D.L., and Best, R.J. (2010), Consumer Behavior, 11th ed., Irwin/McGraw-Hill. 4 Gorrell, M. (2008), “When Marketing Tourism, Age Matters, Expert Says,” The Salt Lake Tribune, May 13. 5 Williams, G. (2005), “Using Multi-Generational Marketing to Target Donors,” Nonprofit World, 23(5), p. 8-13. 6 Koco, L. (2006), “Use Generational Marketing to Reach Boomers, Younger Clients,” National Underwriter Life & Health, 110(20), pp. 26-27.
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adventure vacations, expensive restaurant meals, second homes, recreational vehicles,
maintenance-free homes, personal chefs, personal trainers, motorcycles, and financial
advisors.7
Generation X
Generation X, also known as Baby Bust, Slackers or Why Me Generation was born
between 1965 and 1980. Since the economic situation during that time was hard, the success
for this generation has been less certain. People of Generation X are highly educated, even
though they are pessimistic, skeptical, disillusioned with almost everything, and are very
questioning of conventionality.8 The characteristics, lifestyles, and attitudes of Generation X
include balancing family, life, and work. They do not believe in sacrificing time, energy, and
relationships for advancement and they are generally free agents, rather than team players.9 In
terms of technologies, X's were the first one to use cell phones, and they also frequent
computers and Internet users.
And what is the best way for marketers to attract people from this generation? First of all,
marketers should help them plan for the future and balance work, family, and personal life.
They like initiatives that will make things more useful and practical. Give them a lot of
stimuli, a challenging environment, and flexibility without long-term commitment. Give them
opportunities to learn, grow, and improve.10
Generation Y
Generation Y, also known as Millennials or DotNet was born between the years 1980-
1994 and members of this generation are in many cases children of Baby Boomers. Gen Y
individuals are open-minded, optimistic, goal oriented, and highly motivated toward their
perceptions of success. They are self-absorbed and self-reliant with a strong sense of
7 Leaver, D., and Schmidt, R.A. (2009), “Before They Were Famous: Music-Based Tourism and a Musician’s Hometown Roots,” Journal of Place Management and Development, 2(3), p. 220. 8 Moore, M., and Carpenter, J.M. (2008), “Intergenerational Perceptions of Market Cues among US Apparel Consumers,” Journal of Fashion Marketing and Management, 12(3), p. 323. 9 Lager, M. (2006), “X Ways,” Customer Relationship Management, 10(11), p. 28. 10 Williams, G. (2005), “Using Multi-Generational Marketing to Target Donors,” Nonprofit World, 23(5), p. 8.
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independence and autonomy and want results without being concerned with the why of it.11
Y Generation has a great need for peer acceptance, connecting with their peers, fitting in, and
social networking.12 Members of this generation are very frequent Internet and social
networks users. Moreover, almost each of them owns a smartphone and computer. They use
Internet social networks to keep in touch with their friend and family, but also to do shopping
and get as much information as possible about products they want to buy.
In terms of marketing, important product areas for Generation Y include apparel, accessories,
footwear, room furnishings, action sports equipment, and entertainment. Gen Y likes products
customized to their unique needs, and brand names are also very important. They respond
well to green living and energy-efficient features. They also want products and services with a
purpose greater than the bottom line and are likely to purchase prestige products. Generation
Y people expect competitive pricing, and might want to negotiate based on your competitor’s
advertised price or search results from the Internet13.
Generation Z
Generation Z, in other names Tweens, Generation 9/11 or Generation XD is the
youngest generation in the market. Members of this generation are still children or young
teenagers that had to face several disasters of recent years such as global terrorism, the
aftermath of 9/11, school violence, economic uncertainty and the mortgage crisis in 2008.
Generation Z values authenticity and “realness.” Peer acceptance, as well as “need to belong”,
is very important for them and their self-concept is partially determined by the group to which
they belong. Tweens are a global and diverse generation who come from a wider mix of
backgrounds with different experiences and ideas. They are ready to be on mission, confident,
very optimistic and value security more than ever. Gen Z people believe that they can impact
the world and are quite possibly the most imaginative generation.14 In terms of technology,
members of this generation never lived without the Internet. They are all common modern
technologies users with account on at least one social network and need to stay in touch with
11 Himmel, B. (2008), “Different Strokes for Different Generations,” Rental Product News, 30(7), p. 42. 12 Donnelly, A. (2008), “Playing to the Digital Generation,” Marketing, April 16, p. 19. 13 Himmel, B. (2008), “Different Strokes for Different Generations,” Rental Product News, 30(7), p. 43. 14 Simon, M.M. (2009), “What’s a Tween?”
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their mates as much as it is possible. Many of Tweens are also student bank account and debit
card owners, so they very often use Internet to do shopping.
And what should marketers aim on with this generation? Tweens are discerning consumers
who think a lot about what they are going to wear. Music, fashion, cosmetics, and video
games are very important for Gen Z, specially, in terms of peer acceptance and fitting in.
Some researchers have also predicted that Generation Z will be the unhealthiest and
overweight generation, so gym memberships and health insurance will be important products
and services for this group. 15
What is really astonishing about Gen Z is that children are able to recognize brands from the
age of 18 months. Moreover, kids now influence more than 70 percent of family food choices,
with influence on items bought for them in the 80-90% range. Nearly two thirds of parents say
that their children have an impact on their vehicle purchasing decisions.16
Marketing strategies among different years
Four main periods of the Internet marketing
15 Matthews, V. (2008), “Generation Z,” Personnel Today, September 16, pp. 48-52. 16 Rosenburg, J. (2008), “Mind Your Generation,” Journal of Property Management, 73(6), p. 41-44.
Years Strategy
60's Mass marketing: customer individual needs are not crucial
70's More market research, usage of target groups
80's Marketing databases, more info about customers and more interaction with them
90's Personal marketing- usage of computer technologies
00's Internet marketing
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Marketing strategies, as well as generations on the market, were different in each decade. The
approach of the marketers has been changing with the innovations and new technologies that
were available for people.
Marketing of 60's
Main target groups for marketers were Veterans and older Baby
Boomers. Means of advertising were specially newspapers and
television. Basic feature for this period is mass marketing.
Picture 1: Marketing of 60’s17
17 Pinterest. [https://www.pinterest.com/pin/2744449747958142/]
Substitution(1995-2005)
•Movingfromwarehausestoonlineshops.
Comunication(2005)
•Beginningofsocialnetworksera- Facebook,Twitter,LinkedIn
Platforms(2013)
•Eraofplatformsconnectingconsumers directly withproducers(e.g.:Alibaba.com)•Marketingmixisindividualandnotfixedanymore•Firstgoalistosatisfycustomerneedsascompetitiononthemarketishuge
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Marketing of 70's
Veterans and Baby Boomers are still the main target group, in later
stage Generation X is also coming to scene. Television is the important
mean of advertising. Marketers are doing more market research a target
groups are defined.
Picture 2: Marketing of 70’s18
Marketing of 80's
Collecting more and more information about customers and interaction
with them. It was also the beginning of customer databases. Three
generations in are the market: Veterans, Baby Boomers and Generation
X. Effort to effect the youngest Gen Y by TV commercials is strong as
well (Michael Jackson-Pepsi Generation).
Picture 3: Marketing of 80’s19
Marketing of 90's
Four generations are already in market and also members of Generation
Z are being born. Expanded computer usage and start of personal
marketing. Customer data analyses are becoming far easier thanks to the
new technologies.
Picture 4: Marketing of 90’s20
18 Bodenner, Chris. “When Do Multicultural Ads Become Offensive? Your Thoughts”. The Atlantic. June 22, 2015.[http://www.theatlantic.com/entertainment/archive/2015/06/advertising-race-1970s-stereotypes-offensive/395624/] 19Starwear Status. [https://www.starwearstatus.com/product/michael-jackson-black-and-white-pepsi-commercial-zipper-leather-jacket-by-j-park/20 Sweeney, Daniel. “Throwback Thursday: Salute to the Freshmaker.” The Duncan Daily. November 1, 2012. [http://duncanday.com/2012/11/throwback-thursday-mentos-commercial/]
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Marketing of 00's
Modern Internet marketing that we know
nowadays, in the first decade (2000-2010)
usage of TV commercials, emailing and web
side banners mainly. After launch of social
networks (2010- present), it became much
easier to define and find your target groups
and advertise directly to them. Era of big data
Picture 5: Marketing of 00’s21 analyzes, Internet platforms, cloud
computing and huge amount of information about products, is now available for consumers
on the Internet. All five generations have their place in the market.
Changes of mentality – Information and knowledge
In the previous generations, when someone wanted information about a specific
product or a service, he was going to the shop and asked questions to get the answers he was
looking for. Nowadays, with the emergence of technologies, such as Internet, smartphone or
tablet, it is incredibly easier to get access to all the information you need about a certain
product. Directly from your living room, it’s possible to know within a few minutes all the
characteristics and the reviews of a product, or even to compare it with another one.
Technologies have completely changed the buying process of the customers.
Back in the 60’s, the customer was not that important. The companies were using, for the
majority, the mass marketing, which ignores the different segment of the whole market. The
idea of that type of marketing was to broadcast a unique message that would reach the largest
number of people possible. The main reason why this approach was the most common
strategy at that time was because of the small variety of products on the market. The direct
consequence of this on the customers was that they were not having a lot of choice in the 21 Mick, Blue. “Facebook, MySpace Vow to Stop Sharing Your Private Info With Advertisers.” DailyTech. May 21, 2010. [http://www.dailytech.com/Facebook+MySpace+Vow+to+Stop+Sharing+Your+Private+Info+With+ Advertisers/article18456.htm]
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shops. In fact, local retailers were then adopting a selling strategy with their clients. This
means the focus points were on a short-term relationship, the transaction and the product
itself. Another important point is about the supply driven economy. In other words, the
supplier determined all the types of products, their quality and their prices.
One of the major difference between the customer of yesterday and the customer of today is
that now, people are well informed about the products they want. The access of information is
now available from almost anywhere with our different devices (Tablets, Smartphones, etc.).
There’s a shift in the balance of knowledge from the seller to the customer. With the help of
Internet and the various search tools that are in it, buyers tend to know more information that
the vendor himself. A study conduct in 2013 of more than 1 400 business-to-business
customers reveals that the customers do about 60% of their transactions without even talking
with a vendor or supplier22.
In the previous decades, before the appearance of Internet, companies were controlling almost
all the information. This model is now completely obsolete and the customer journey is way
more complicated then it was before, due to the access of knowledge about products and
services. Internet has brought to the consumer something that was not in the mass media, and
the markets are now smarter, more informed and organized. Customers of today look up for
reviews on Amazon and Facebook, research professional information on LinkedIn, browse on
Google and search on the companies’ digital properties. Another important aspect about the
emergence of Internet is related to the variety of products on the market. It’s now possible for
the customers to buy almost everything online, and from anywhere in the world. With all
these new possibilities, people tend to use more and more their electronic devices to shop and
buy online. The diagram on the figure 1 shows the evolution between 2010 and 2014 of the
daily use of some media. In four years, the daily use of a smartphone increase from 40
minutes to 134 minutes, and from 21 minutes to 163 minutes for the tablet. These numbers
clearly demonstrate the change in the behaviour of people. More than ever, the online
commerce is present and the customers are ready to modify their buying process.
22Sank, Tom. “Dealing with the informed customer.” Qvidian. October 9th, 2013. [http://www.qvidian.com/blog/dealing-informed-customer]
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Figure 1: Average daily media use in the United States from 2010 to 2014 (in minutes).23
How marketing has to change – Information and knowledge
“The paradigm of teaching your customers about what you do has flipped and now
customers walk through the door knowing exactly what they want and what they should pay
for it.24” Customers are more informed than ever, and that changed the way they buy, use and
evaluate goods and services they purchase. In fact, this is not a problem for the companies, as
long as they adjust their marketing strategy and don’t stay behind the others. It’s then
essential for them to investigate the changes to be able to know what is happening and why
they are happening, in order to respond to it.
The main goal of today’s companies is not help to sell, but help to buy. This means the selling
strategy has become a marketing strategy, where the focus is on the consumer, and a long-
term relationship with him. Instead of a supply-based product, companies now concentrate
their efforts on the customer requirements and on a customer-oriented service. To be able to
get a big market share, the retailers have to enhance their customer experience and have to 23 “Average daily media use in the United States from 2010 to 2014 (in minutes).” Statistica. [http://www.statista.com/statistics/270781/average-daily-media-use-in-the-us/] 24 Newman, Daniel. “How to sell to the informed customers.” Huffington post. July 13th, 2014. [http://www.huffingtonpost.com/daniel-newman/how-to-sell-to-the-inform_b_5309839.html]
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provide a better service. A survey conduct by CEI Research revealed that 86% of buyers are
willing to pay more for a better consumer experience25. This statistic is interesting, because it
illustrates how the service has become important for the buyers.
“62% of global consumers switch service provides due to poor customer service
experiences.”
– Accenture global consumer pulse survey26.
If they are not satisfied, they will go away and see another retailer. This is the reason why
companies are now according so much importance on the consumers. They know that it costs
more money to acquire a new customer than to keep an old one. Companies have to find a
way to provide experiences that integrate innovation, data and technologies to create strong
relationships with their customers.
After the emergence of technology, the mass effect has become useless due to the big variety
of products on the market. Marketers had to found a way to be closer to the customer, to make
it more interactive and individual. Customer database is the key for the companies to build a
relationship with all of their customers. When buyers enter in a shop, they want to be known
and recognised. They want to be in an environment in which they feel comfortable and where
they are free to choose whatever they want. The challenge for the retailers is then to collect
the relevant customer information to be able to adapt their service subsequently. To reach that
goal, the suppliers have to collect as many data as they can about their clients. They can
record each customer’s transaction history (what they purchase from them, when and how
often), accumulate consumer data every time they interact with the company (via mobile,
online, in-store or in a survey), and use the location-based technology. However, data itself
don’t reveals anything, the suppliers have to create the information out of it. This means that
they have to filter the information, in order to create a profile that will be consistent with what
products they sell. Globally, customer database helps to define a clear picture of who is the
target customer, how to communicate with them, advertise them and market with them. Once 25 CEI Research. “Why you need to reprioritize your customers.” Rosetta. [http://www.rosetta.com/why] 26 Accenture global consumer pulse survey. “Why need to reprioritize your customers.” Rosetta. [http://www.rosetta.com/why]
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a shop knows exactly what is their ideal consumer, it is easier to understand their needs, and
then to communicate them the right offers, to eventually increase the sales. Of course, to
achieve all of this, companies have to invest money in the technologies that will allow them to
handle the volume, the velocity, and the variety of the big data, such as Hadoop, the most
commonly used framework, which collects data, and also provides tools to analyze it.
“Understanding who your customers are and how they behave enables you to target the
right people. However, understanding why they behave the way they do enables you to
adapt the message, channel and frequency for a higher degree of relevance, which drives
acquisition and retention rates.”
-Rosetta27
To adapt themselves to the changes that occurred in the last decades, companies have to
create awareness of a need that the customer may not even know he had. In some way, they
have to know the customer better than he knows himself. “The aim of marketing is to make
selling unnecessary.” This quotation of Peter Drucker, management consultant, educator and
author, has never seemed this true. Companies such as Amazon represent a great example of
success in this challenge. Jeff Bezos, the founder and CEO of Amazon, claims that his
company can predict what products their customers will order one week in advance 70% of
the time28. Furthermore, when you buy a product on Amazon, they always propose you
another product linked to the other one, to add to your cart. By doing so, Amazon is able to
sell things that people would have not necessarily bought in the first place. All these processes
are due to the customer database. Since many years, Amazon uses data to built a
recommender system that suggests products to people who visit their website. This means that
each customer and each user can see customized results. Using a different approach, LinkedIn
is doing the same with their prediction system “People you may know”.
Another challenge is related to the social media. With the emergence of websites such as
Facebook, Twitter, LinkedIn and Instagram, the amount of information about diverse products 27 CEI Research. “Why you need to reprioritize your customers.” Rosetta. [http://www.rosetta.com/why] 28 Molenaar, C. (2015) “Why customers would rather have a smartphone than a car: Relationship retailing as an opportunity. “ p.29. United Kingdom: Gower Publishing.
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is way more important than in the past. To face this new reality, companies can’t just sit and
watch, they have to be active on these media, to participate in the conversation, not just
advertise it. Moreover, they have to find ways to encourage their customers to talk about their
satisfaction of the products. By doing so, companies will show to the consumer that they want
to offer a better customer service and that they are engaged with them. As an example,
Starbucks launched this year the movement “Tweet a Coffee” to build awareness of the brand
and engage customers. In addition to provide giveaways, Starbucks regularly creates content
that encourages their customers to “like”, “comment”, and “share”. The impact of social
media on revenue is getting higher each year. In America, social media influences 36 percent
of sales and this percentage is expected to increase up to 52 per cent by 201829.
The graphic in the figure
2 illustrates clearly how
important it is for the
companies to be on the
social media. The
difference between a fan
and a non-fan can be
very considerable. For
ZARA, the difference is
evaluated at 354$.
Globally, the average
difference is 116$ per
year.
Figure 2: Average Spend in 2013 between fans and non-fans.30
Another important aspect that companies have to consider since the arrival of technologies is
the website. Same if you think local, you have to view global. In the past, customers were
hesitant to buy online because of a lack of knowledge of this medium. Since a few years,
people are getting more familiar with the Internet and use it more often, as a research tool or
also to buy products. This means that if the retailers want to survive, they can’t just sell in the
physical shops, they have to sell online too. However, to obtain a successful multi-channel 29 Molenaar, Cor. (2015) “Why customers would rather have a smartphone than a car: Relationship retailing as an opportunity. “ p.134. United Kingdom: Gower Publishing. 30 Scissons, Michael. “The value of a Facebook fan 2013: revisiting consumer brand currency in social media” Syncapse. April 2013. [http://www.slideshare.net/alfonsogadea/value-of-a-facebook-fan-2013]
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strategy, suppliers first have to clarify if the customer is looking for information or to make a
purchase on the website. This will help the company to create the website that will fulfill the
needs of the customers. Although, the information on the website must be convenient,
relevant and easy to use for the customers. If the interface is not well structured, the
customers won’t waste their time to search what they need, they will go see the competitor’s
website. According to SME Website Statistics, 94% of people cited web design as the reason
they mistrusted or rejected a website31. To facilitate the buying process of the customers, the
suppliers should have three main sections, which are the company information (What we
stand for, Our products/services, Contacts, etc.), the product information (Practical
information, videos, user manuals, FAQ, etc.) and the topic information (Around the
customer’s issue or theme)32. This information will guide the customers in their buying
process and will provide them a better-informed purchase.
How generations react to all of these changes – Information and knowledge
Regarding to all the changes that occurred since the emergence of technologies, it’s
obvious that the generations are not responding in the same way. Same if people are accepting
Internet more and more, the major online shoppers are young people and families, over older
people, who use the Internet less often and more as a resource tool.
Since the past 10 years, the percentage of online adults who use social networking sites, such
as Facebook, Twitter, LinkedIn and Pinterest, has incredibly risen. Last January 2014, 74% of
all online adults were using social networking sites in the US. The problem is that the older
generations are not using these websites as much as the younger people. 89 % of the adults
between 18 and 29 years old (Generation of the 90’s and +) use the social networking sites,
compare to 82% for the adults between 30 and 49 (Generation of the 70’s and 80’s), 65% for
the adults between 50 and 64 (Generation of the 60’s), and 49% for the adults between 65 and
older (Generation of the 50’s and -)33. These statistics reveal that same if the shops try to
implement a social relationship with all their customers through the social media, it’s more
31 SME Website Statistics. February 27th, 2014. Rareform New Media. [http://www.ironpaper.com/webintel/articles/10-web-design-statistics/#.ViTgqryV_zI] 32 Molenaar, Cor. (2015) “Why customers would rather have a smartphone than a car: Relationship retailing as an opportunity. “ pp. 80-81. United Kingdom: Gower Publishing. 33 “Social media use by age group over time”. Pew Research Center. January 2014. [http://www.pewinternet.org/data-trend/social-media/social-media-use-by-age-group/]
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difficult to reach older people than the younger one. Therefore, same if there has been a rapid
growth of Internet, smartphones and tablets use amongst the older generation in the past years
(An increase of 59% for the generation of the of the 60’s between 2005 and 2013)34, retailers
still have to find other ways to communicate properly with older people.
Nowadays, the English has become the most common language use internationally. To adapt
themselves to this new reality, the webshops have to include an English version of their
website, so that they can attract more customers. However, generations react differently in
regard to the language barrier. A lot of people from the older generations are not use to the
English and are not familiar with it. The direct impact of this on the online shopping is that
older people tend to buy more locally, because it’s only in these webshops that they are able
to understand the language. On the other hand, younger people are, for the majority, very at
ease with English. This ability allows them to catch more opportunities, because they can
shop and buy abroad on Internet. The variety of the products is then bigger and they can get
better prices when they shop elsewhere.
In our opinion, the notion of privacy is another point on which the generations don’t share the
same point of view. As we stated earlier, the emergence of technologies has brought another
dimension of the customers. The companies are now collecting as much data as they can
about the consumers, so that they can know them better in order to provide them a greater
service. We haven’t been able to find statistics to confirm our statement, but we think that old
people are less incline to give their personal information to the retailers because they are
afraid that this would break their privacy. The consequence of this decision is that the retailers
can’t, without personal data, formulate good personalized-offers to these people. Generally,
younger people don’t have any problem to share their information with the retailers. This
allows the companies to analyze the customer behaviour of each consumer, and then to
communicate them the right offer to fulfill their needs. The major difference between the
older generation and the younger one is that the older seems to have no interest in creating a
relationship with the retailers whereas the younger people are ready to share their information,
in order to obtain a better customer service.
34 Ibid.
19
Summary table - Information and knowledge
Changes of mentality:
People are more informed about the products/services
Access of information --> ZMOT
Appearance of technologies (Internet, tablet, smartphone)
Variety of products (Shop worldwide on the online market)
How marketers react:
No more about help to sell, but help to buy
Focus is now on the customer itself (Experience and service)
From a supply-driven to a demand-driven economy
Introduction of the customer database (to collect info on customers)
Analyse the data to create the information out of it
Try to create awareness of a need for the customers (Ex: Amazon)
Be active on social media (Create content and participate)
Create a website, in order to sell online and in physical shops
How generations react:
The major online shoppers are young people and families
The percentage of online adults who use social networking sites has risen
It's more difficult for marketers to reach older generations
Generations react differently in regard to the language barrier
Older people are less incline to give their personal information
Change of mentality – Values
Since a few decades, it has been possible to observe a clear change in the mentality of
the people’s values. These changes are quite manifold but nevertheless, some seems to be
much more relevant for the community. Vanessa Merit Nornberg explained it well, “Younger
generations are much more conscious than previous ones to the impact their spending
decisions can have on the world around them”35. Customers of today now care more about
their ecological footprint, about the living condition of the others and, they also want to be
able to trust people in our globally connected world’s.
35 Merit Norberg, Vanessa. “Why 2014 Will Be the Year of the Informed Consumer.” Inc. January 2nd, 2014. [http://www.inc.com/vanessa-merit-nornberg/why-2014-is-the-year-of-the-informed-consumer.html]
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More than ever, the human beings are getting more and more concerned about the
environment and the planet they are living. Many reasons can explain this change of
mentality. For some people, it’s because they are nature lovers and prefer to live near green
places or even in the woods than to live directly in the city center. For others, it’s because
they want to leave a healthy planet to their descendant, so that they could enjoy life as much
as their ascendancy did. Even in the business sector, people tend to carry much more about
the environment issues than in the past. Because people care about how the others perceive
them, environmentally friendly companies are now getting very popular and often have
impressive success. A company such as Tesla Motors would be an excellent example of a
successful business model that highly considers the environment in their different products.
Furthermore, electric and hybrid cars gained more popularity in the last years, same if they are
both more expensive than the common fuel cars.
In fact, take care of the environment is not only to look good in front of the others, but it’s
also a real problem that companies and customers have to take into consideration. In diverse
sectors, such as insurance, tourism, food and energy, meteorological events and climate
change create an important risk, and it’s why it’s important for them to preserve and protect
the environment, in addition to deploy some strategies to improve their environmental and
economic performance.36 In brief, both customers and retailers tend to care much more than
before about the environmental issues and are ready to change their behaviour in order to slow
down the climate changes.
With the important immigration from the tier-world and from Asia to the occidental countries,
people seem to have developed a greater open-mindedness and they are getting more and
more sensitive about the living conditions of their peers. Nowadays, almost everybody is
aware about the cheap labor around the world. The main reason why big companies like Nike
are using cheap labor to produce their product is fairly simple, it’s to reduce their costs. By
doing so, they can offer their products at the consumers at a lower price, so that they get more
competitive against the other companies. However, people now care about this problem. They
are even willing to pay more for a certain product, if they have the warranty that the ones who
36 “Developing a green business mentality.” European Commission. May 22th, 2014. [http://ec.europa.eu/environment/news/efe/articles/2014/05/article_20140522_08_en.htm]
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are involve in the production of what they are buying, are treated well. It’s also why non-
profit organizations such as Fairtrade® exist. These international organizations worked to
insure that there is a minimum fair wage that is respected and that the working conditions
provided by the employer are decent.37 Another important non-profit organization is the Fair
Labor Association (FLA). The President Bill Clinton established it in 1999, and it’s composed
of universities, businesses and civil society organizations. This institution has been created
after some huge scandals related to child labor and some big sports brands.38 To conclude,
these associations are the concrete evidence that people are getting more concerned about the
working and living condition of the other human being in this world.
In the last centuries, people were going to the local shops when they had to buy something.
They knew the sellers, they knew the shops, so in brief, they were in charted territory. Since
the emergence of the Internet and mostly since the emergence of the e-commerce, people
don’t know anymore the sellers. In this new reality, customers may not even know were the
shops are located, but in fact, it doesn’t really matter, because they are able to see the products
via their webshops, and then to make it delivered directly at home. It can be 10 000 kilometers
away from it, it might be in a country were they don’t even speak their language, but is it
relevant? In fact, one of the most important point is that web sellers need to provide English if
they want the customers to shop on their website and it’s trust. The customers need to feel that
the website represents a safe environment, during all the buying process. Patrick Coombe says
it well, “Trust is the single most important factor that will determine whether or not a
customer will complete an online transaction or hit the back button.”39 It’s hard to gain the
confidence of a customer, but on the other hand, it’s also incredibly easy to lose. In the past
decades, when people were shopping in a physical shop, this kind of fear was not present, but
now, since people are providing their personal information, their bank account number and
their credit card number, they are scared that all these data could be use in an inappropriate
way. In the past years, the number of companies and online shops have increase so much that
a customer can easily switch from a webshop to another if he doesn’t trust the previous one
37 “Fairtrade Standards” Fairtrade. 2012. [http://fairtrade.com.au/page/fairtrade-standards] 38 “Fair Labor Association” Wikipedia. March 19th, 2015. [https://en.wikipedia.org/wiki/Fair_Labor_Association] 39 Coombe, Patrick. “Do Your Customers Actually Trust You? Injecting Trust into Online Commerce.” Moz. June 19th, 2013. [https://moz.com/ugc/do-your-customers-actually-trust-you-injecting-trust-into-online-commerce]
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anymore. The confidence is now, more than ever, a shared key point. This being said, the
buyers and the sellers need to mutually trust each other.
Obviously, these three values are not the only one who seems to emerge, but in our opinion,
they can be classified as the more important ones. With the globalization and the better level
of education, people now have a better idea of the world they are living on. They are also
feeling more empathetic to the others, since now, with the immigrations from all around the
world, the population is more in touched with these peoples. For some, they are part of their
family, they are friends, they are colleague or even though their neighbour. Finally, people
need to feel that there’s a climate of confidence between the sellers and them to do business in
a trustful environment.
How the marketing has to change – Values
Mentalities have change since the last few decades and as the time between each
generation tend to decrease; the values are changing way faster. But the three values presented
in this work aren’t going to change soon, because now, they are all, in a way, mandatory.
Avoid them may lead to major consequences on the planet’s health and because we all want a
beautiful world, we are all concerned about them. The marketing needs to consider these new
values, because from the eyes of the buyers, it adds a plus-value to the product they are
considering to buy.
If someone could travel in time and return back in the 60’s or the 70’s, he would notice that
nobody was really caring about the environment except the hippies. They thought that the
planet would exist forever and that all the resources would be unlimited. They can’t be
blamed, because even the science didn’t know it, but today, the situation is clear. We are now
all familiar with the climate change and the destruction of the fauna and flora. So nowadays,
as people are getting more and more concerned about the environment and about taking care
of it, marketers need to develop a new strategy that fits with the new market. In the past years,
when you were watching a car advertisement, you were always hearing about how this muscle
car was faster and more powerful than the other cars with his big V8 block, because it was
23
what the consumers wanted to hear and that’s how the marketing was working. At that time,
nobody was caring about the consumption or the pollution of these big cars. They wanted to
hear the sound of the motor and smell the gas getting out of the exhaust. We don’t really see
those types of advertisements anymore, because the needs and the mentalities have changed.
People now want environment-friendly cars. It’s the main reason why today, the marketing
tendency demonstrates how a new car is fuel-efficient, how it has the lowest emission in his
category and why they always try to beat record in these previous aspects. It’s also why the
biggest car brands are offering so many electric cars, hybrid cars, very low consumption cars,
because the human beings are changing their consumer’s behaviour. Basically, the buyers are
searching for brands that represent their values. In order to attract the more potential
consumer possible, the brands now have to follow the trends and the new values. A study
published by the Harvard Business Review found out that 64% of the consumers considered
shared values as a primary reason of a strong brand relationship.40
Many companies and retailers change their marketing strategies and now associated
themselves with non-profit organizations or charity work to enhances their image and also be
more relevant and attractive to the customers. It has been mentioned earlier in the work that
people were caring more about the living and the working conditions of the workers than ever
before and even more since almost everything we buy comes from Africa, the Middle/Far
East or the Asia, where cheap labor and bad working conditions are part of the day to day life.
The research of Harvard Business Review also mentioned, “Most customers aren’t
particularly loyal to any one business, but they are loyal to what the business stands for” 41.
It’s one of the main reason why showing what you are standing for is a part of the new
marketing strategy. Demonstrating that you only work with suppliers who are accredited by
Fairtrade or the Fair Labor Association helps you to indicate that you also care about all the
workers who, near or far, are supplying you. It enhances your image and your social impacts.
There are also other examples of this kind of stance on issues, such as the TOMS’ shoes who
have their own “One for One” movement where they are giving one pair of shoes for every
40 Ciotty, Gregory. “The Art of Customer Loyalty.” Help Scout. [http://www.helpscout.net/customer-loyalty/#two] 41 Ibid.
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sold one to someone who needs it. Moreover, Timberland, with their G.R.E.E.N Standard, put
in the same team profitability and community to give back to others.42
The emergence of online businesses changes customers’ buying experience and the marketing
has to react and prove to everyone that online shopping is as safe as physical shopping. This
issue helps to develop many technologies that become a true hub for the online shopping
process, such as PayPal (the most used payment process), Transport Layer Security or Secure
Socket Layer (“cryptographic protocol designed to provide communication security”43). The
use of trusted payment process in webshops is primordial for their success and beside that,
customers need the assurance that their intimacy is well protected, that their data are well used
and that they can’t be thief. First thing first, let’s talk about PayPal. This service was founded
in 1998 and it’s now available in 203 markets around the world, allowing their 169 million
customers to pay in more than a 100 currencies.44 In fact, PayPal is the world digital wallet
leader with 79% usage rate, beating out his entire direct competitors such as Amazon,
Starbucks and Google Wallet.45 Furthermore, more than 4 billion payments have been process
through PayPal in 2014, and there are already 1.16 billion payments in the second quarter of
2015, which represents an increase of 25% for the same period one year before.46 Even the
number of payment process by an account has increase from 23 to 26 per year. This illustrates
that payment facilities such as PayPal can encourage people to trust the online shopping.47
This being said, the most important statistic that proves that people trust PayPal for their
online shopping is definitively the one regarding to the increase of customers and average
customer spending. As a matter of fact, “According to Nielsen Online Buyer Insights in 2013,
businesses that integrated PayPal into their system increased customers by 27%, and doubled
customers spending.”48 There’s also Alipay.com, a third-party online payment platform
introduced in 2004 in China by Alibaba Group.49 These services provide a new payment
method, where the consumer has the power, instead of the sellers, but how can the buyer have 42 Ciotty, Gregory. “The Art of Customer Loyalty.” Help Scout. [http://www.helpscout.net/customer-loyalty/#two] 43 “Transport Layer Security”. Wikipedia. October 2nd, 2015. [https://en.wikipedia.org/wiki/Transport_Layer_Security] 44 “PayPal About” PayPal. 2015. [https://ca.about.paypal-corp.com] 45 Chan, Elliot. “6 Stats That Prove PayPal Still Matters for Businesses.” Control. August, 2015. [https://www.getcontrol.co/blog/6-stats-that-prove-paypal-still-matters-for-businesses/] 46 “PayPal About” PayPal. 2015. [https://www.paypal.com/us/webapps/mpp/about] 47 Ibid. 48 Chan, Elliot. “6 Stats That Prove PayPal Still Matters for Businesses.” Control. August, 2015. [https://www.getcontrol.co/blog/6-stats-that-prove-paypal-still-matters-for-businesses/] 49 “Alipay” Wikipedia. August 21st, 2015. [https://en.wikipedia.org/wiki/Alipay]
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the power? Well, it’s quite simple. When someone buys something on AliExpress through
Alipay, the money is withheld until the buyer is happy and completely satisfied of the product
he had just bought. Then, the money is transferred to the sellers and because of this, the
population of China regain confidence in online purchasing.50 This new way of processing is
easily making is way throughout the modern online shopping and helps buyers to not be afraid
of the e-commerce process.
The second things that really helps the customer to trust a webshop, is the presence of Trust
Marks. We find much Trust Marks, such as SSL Certificate, McAfee Secure, Truste and many
others. In the U.S., 93% of the online shoppers say that it’s important for a webshop to
include a Trust Mark of some kind in their site.51 These Trust Marks assure the security and
the privacy of the customers for the whole time he is on the site or provides data, like personal
data or financial data. Finally, an important marketing strategy for a website, despite the
secure online process and the data encryption, is the testimonials from genuine happy
customers. This reflection came from the power of Word of Mouth (WOM) marketing and
basically, “What others say about you is easily 10x more powerful and convincing than what
you said about yourself”52. Based on that, every webshop should provide a review section. It’s
also why many brands or shops associate themselves with celebrities and well-know persons
who have a huge amount of followers on social media. Those types of associations also help
the buyers to trust the sellers, because they think that if the famous celebrity agreed to be
viewed with these brands or shop, it’s because she trusted it.
As a conclusion, marketing reacts to these changes of values by adopting a new image, a more
environmentally friendly one. The companies also associated themselves with major
renowned organizations that fit with the new values and tendencies. Finally, the creation of
new technologies helps to provide the customer a trustworthy online shopping environment.
The marketing will never end to change as we now lived in a world where everything evolves
rapidly that it must adapt itself constantly and react as fast as possible, otherwise it won’t
follow the consumer needs. 50 “Alipay” Wikipedia. August 21st, 2015. [https://en.wikipedia.org/wiki/Alipay] 51 “Top 10 Ways to Build Trust for Your Online Store.” webShaper. 2013. [http://www.webshaper.com.my/learn/top-10-ways-build-trust-online.php] 52 “Top 10 Ways to Build Trust for Your Online Store.” webShaper. 2013. [http://www.webshaper.com.my/learn/top-10-ways-build-trust-online.php]
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How generations react to all of these changes – Values
The reactions about the changes that occurred in the marketing concerning the values
are pretty variable depending on the generation. Most and foremost, they seem to touch
everybody, from the digital born to the Grandparents.
Since a few years, almost everybody, regardless of their age, seem to care more about their
impacts on the planet and marketers are following the same path as well. Even if many of
them weren’t used to these tendency, it was almost mandatory to step in the new boat,
because otherwise they would have sunk. It’s why producers and marketers introduce new
innovations corresponding to these new trends. At first, the success was not the one
anticipated, because all these things were new to the buyers. Since the tendency begin to gain
more and more people from all ages, the consumers begin to change their habit and their way
of living. In this way of thinking, we can
understand why green vehicles such as
plug-in hybrid and electric cars are
gaining so much popularity around the
globe. Even though, some owners use
those cars to make an environmental
statement, but it’s still a good thing.53
Some people own these types of car to
follow those new tendencies, or to adopt
these new values.
Fig 3. Electric vehicle sales in 2013 and 2014 in the UK54
In the UK, the sales of plug-in hybrid and electric cars are growing increasingly fast
(respectively increased of 454% and 181% between 2013 and 2014).55 Since we know that
these types of cars are not the cheapest ones, even if the government is giving some huge
subventions to the buyers, the majority of the buyers aren’t young adults who are getting out
53 “Green vehicle” Wikipedia. October 2nd, 2015. [https://en.wikipedia.org/wiki/Green_vehicle] 54 Nichols, Will. “UK electric car sales surge in 2014.” The Guardian. October 7th, 2014. [http://www.theguardian.com/environment/2014/oct/07/uk-electric-car-sales-surge-in-2014] 55 Nichols, Will. “UK electric car sales surge in 2014.” The Guardian. October 7th, 2014. [http://www.theguardian.com/environment/2014/oct/07/uk-electric-car-sales-surge-in-2014]
27
of school. So these numbers are the real proof that multiple generations rely themselves to
these new values and buys these new innovations. The marketers are working hard on to
provide more models each year to satisfy every different consumer and so far, it seems to be
effective.
Concerning the fair working conditions, it follows the new trend to live in a better world,
where everyone is equal and have decent living conditions. This being said, it’s not surprising
to see an increase in the number of associations who work in the same field as Fairtrade or the
Fair Labor Association. As a part of these new values, marketers found out that the products
that corresponds to them, had a plus-value for the customer. This means that the buyers is
ready to pay more for a product because it has the seal proving that it is respecting the fair
working conditions and in fact, these products are often more expensive than the other
because the workers were paid more. The modern consumer seems to has a more developed
social conscientious and marketers know it, so they change their marketing strategies and
focus more on these added values and as we know, people are choosing brands and certain
types of products because of the image it projects. In fact, the brands that rely themselves to
these values attract new customers and gain popularity. This affects all the generations,
because the diversity of products that responds to these standards are increasing year after
year, so anybody can change his buying habits. The customer seems to appreciate that their
buying habits can have a positive impact for many workers and producers around the world.
Nowadays, as long as a person has a credit card and at least 18 years old, she can shop online
but if she does so, she wants to do it in a trustful environment. This being said, it’s not even
surprising to see grandparents 70-plus using Internet to shop. rA research even found out that
“Adults 50 years old and above represent the Web's largest constituency, comprising one-
third of the total 195.3 million Internet users in the U.S.”56 These persons who were born a
long time before the arrival of the computer are rarely the ones who are the most confident
when comes the time to use a computer and we used to say that we trust what we understand.
Even though, the seniors are getting more and more involve in online shopping because
webshop and the online buying process is getting more user-friendly and more
comprehensible. In fact, two out of three Americans of 50 and above, of the one who compose 56 Abramovich, Gisele. “15 Mind-Blowing Stats About Online Shopping”. CMO. May 7th, 2014. [http://www.cmo.com/articles/2014/5/6/Mind_Blowing_Stats_Online_Shopping.html]
28
the 195.3 million of Internet users in U.S., are buying from online retailers.57 Furthermore,
with all the improvements in the security issues, people are gaining confidence in regard to
online shopping. But, our first thought could have been that many adults of all ages, maybe
more 50 and above, stick to the old fashion way of going into physical shops. Often, people
don’t like changes and prefer to keep a winning formula instead of experiencing new stuff.
But many statistics are showing the wide generation’s spread tendency to shop online. One of
the most advisory and influential firms in the world, Forrester research, found out some
interesting statistics about the differences in the generations in 201458:
“Forrester found that more than three-quarters of 57,499 U.S. online adults surveyed had
ordered products or services online. And while Gen Y adults (ages 24 to 32) are the most
likely to have done so, Gen Xers (ages 33 to 46) spend the most. With an average $561 in
spending, Gen Xers spend about 15 percent more online than Gen Yers ($489), and roughly
25 percent more than the average online adult ($449).”59
- Giselle Abramovich
To conclude, every living generation is affected by the new marketing strategies and even if
sometimes it seems that these changes are not quite popular, peoples ended by understanding
the reasons behind these changes. They find them relevant enough to change their buying
habits and their lifestyle in order to adapt to those new values. By doing this, they show that
they care more about the impact that their presence has on this world. Finally, many of them,
regardless of their ages, use Internet to shop online more often than ever and the e-commerce
is increasing at an impressive rate, which proves, in a way, that they trust the online shopping
process.
57 Abramovich, Gisele. “15 Mind-Blowing Stats About Online Shopping”. CMO. May 7th, 2014. [http://www.cmo.com/articles/2014/5/6/Mind_Blowing_Stats_Online_Shopping.html] 58 “About Forrester” Forrester. 2015. [https://www.forrester.com/marketing/about/about-us.html] 59 Ibid.
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Summary table - Values
Change of mentality:
Human beings are getting more concerned about the impact of their
decisions
Business sector is facing environment issues and needs to improve their
environmental performance
Environmentally friendly businesses are getting very popular
People are conscious about cheap labor and hard working conditions
Fairtrade and Fair Labor Association (International organizations)
Trust issue in E-commerce (Don't know or view the seller)
Fear of an inapropriate use of the customer information
How marketers react:
Respect the values of the customer end to a plus-value on the product
In car industries --> From a performance to a low consumption ads
Companies and retailers associated themselves with charity and non-profit
organization
Companies and retailers need to show for what they are standing for
Development of new technologies to improve customer safety online and
during the buying process
PayPal & Alipay (Online payment process), TLS & SSL (TrustMark,
Communication safety)
Power of Word of Mouth (what people say about you as a seller)
How generations react:
Changes touch every generations, but in different ways
People own things to follow tendencies and be a part of these new values
Marketers provide and adapt their product to attract different generations
Buyers are ready to pay more to buy a product that represents them
Every generation use Internet for shopping
Some trust issues for the Baby Boomers and Veterans, since they don't are
not used to the new technologies
Online shopping is involving to be more user-friendly
Changes of mentality – The “now effect”
“There is more to life than increasing its speed”. This quote from Mahatma Ghandi
has never seemed to be so true. It’s undeniable that the lifestyle’s speed is way faster than a
few decades ago, and this is especially due to the development of the technologies. Through
30
our smartphone, tablet or computer, we now have an instant access to the information because
of the Internet. Smartphones are now so important in our life that many people are suffering
of “"nomophobia", which is specific to the anxiety driven by the absence of your mobile
device.”60 Smartphones now allow people to be connected with the world around them all day
long, in addition to provide an infinite access to the Internet and its huge market. It has never
been as easy as today to shop, and this is why the shopping mentality has changed. Nowadays,
people are so used to have everything at the tip of their fingers that they suffer of what can be
called, the “now” effect. This factor is the “sickness” of wanting everything at the instant
moment, and it’s very present in the shopping process. Normally, when someone goes in a
physical shop, he can easily get out with the item the same day. People are now so busy, that
they don’t even take the time to go to the shops. Also, they are highly demanding in regard to
the customer service, where they want to have a reliable 24/7 assistance, no matter if it’s
before the sales or for after-sales support. Instead, they buy a lot of products on the Internet,
because even if often they are shipped from far abroad, customers can have them very fast.
The occidental man never wants to wait for something, nor to search a product for hours in
order to find the one that fits his needs. This could easily explain why today, two of the most
important things on online shopping are the delivery speed and the platforms. Having a
traditional online shop can be no longer sufficient to face the desires of the consumer, and it’s
why they need to turn themselves toward bigger players, such as Amazon, Alibaba or EBay to
generate more sales. In sum, the modern customer has a new mentality. He wants to be able
to shop from anywhere, to buy his articles at the moment he wants, and to have it delivered as
soon as possible at home.
How marketing has to change – The “now effect”
The new mentality of the “now” effect doesn’t go unnoticed by the marketers, who
need to change their strategies and their ways of working, if they want to be able to deliver to
the customers what they asked for. First things first, the consumer wants to be able to shop
easily at one place, for every products he needs, and be able to view all the options that are
offered to him. This being said, the market reacts to these needs, by providing the customers
of multiple worldwide platforms (Amazon, EBay, Alibaba, etc.) where it’s possible to buy 60 Villas-Boas, Antonio. “Researchers say your answer to these 20 questions will tell the true story of your smartphone addiction.” Business Insider UK. May 11th, 2015. [http://uk.businessinsider.com/how-dependent-are-you-on-your-smartphone-2015-5?r=US&IR=T]
31
almost anything, from anywhere. In this list of the major players, Alibaba is definitely the
largest online retailers’ platform. In 2014, Alibaba had $240 billion in sales, which is more
than Amazon and EBay combine.61 This demonstrates the importance of these huge platforms
in today’s market. Secondly, the good usage of the Big Data will become a standard for both
retailers and webshops.
“Big data is being generated by everything around us at all times. Every digital process and
social media exchange produces it. Systems, sensors and mobile devices transmit it. Big
data is arriving from multiple sources at an alarming velocity, volume and variety. To
extract meaningful value from big data, you need optimal processing power, analytics
capabilities and skills.”
- IBM62
The use of the Big Data by companies, retailers, facilitators, industries and platforms helps
them in different ways. For instance, with a good usage of it, they can predict customers’
behaviour, and then, predict the future sales. That way, they can approximate the demand and
take care to never miss any selling opportunities. It also helps them to improve their services
and their production, in order to deliver the best products in the shortest time, while fulfilling
the desires of the customers. To do so, the key elements are the collaboration, the
connectivity, the control and the communication between every party. It is then easier for
them to develop a solid supply chain and a strong logistic. To achieve this, they need to
collaborate all together and use the expertise of each partner, such as the product excellence
of the factories, the operational excellence of the facilitators and the customer intimacy of the
companies, retailers and platforms. Companies and retailers need to collaborate with a logistic
service provider, such as FedEx, UPS, DHL, to offer the best service possible and have a
guarantee that their products are delivered fast. For these providers, the operational excellence
should be the focus point to answer the demands of the customers. The new technologies help
to connect every segments of the supply chain. For instance, factories can now have a
permanent access to the sellers’ stock, and then, take care of filling it. This allows to reduce
61 Popper, Ben. “Alibaba has more sales than Amazon and eBay combined, but will Americans trust it?” The Verge. May 7th, 2014. [http://www.theverge.com/2014/5/7/5690596/meet-alibaba-the-ecommerce-giant-with-more-sales-than-amazon-and-ebay] 62 “What is Big Data?” IBM. [http://www.ibm.com/big-data/us/en/]
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the number of intermediates in the supply chain, makes it less complex and more reliable. At
the end, the customers receive a better service, due to the reduction in the delay. Often,
retailers work with different suppliers to make sure that they are never out of stock, because if
this situation happens, then the customer will need to wait longer to receive the items he
ordered. Sellers know that in this case, the consumer won’t buy again on their webshops. One
of the direct consequences of the innovations surrounding the connectivity is a better
communication between all the different parties involve in the supply chain. In the past, it was
difficult to communicate with their partners when they were far away. Since the arrival of the
Internet, they are able to communicate much more easily than before, and problems can be
resolved quickly. Finally, a good control of all the supply chain and the logistic insures that
no problem will stay unsolved for too long, which can have consequences on the global
customer experience.
How generations react to all of these changes – The “now effect”
Each generation has its own opinion about the “now” effect, but almost everybody is
affected by the increasing rhythm of life, where the main elements are the performance and
the speed. People day-to-day life is always strictly scheduled and losing time seems to be the
worst thing, because they all know that the only thing that can’t buy is time. This mentality
has also an effect in the desires of the modern customer, who wants everything and at the
moment he wants it. Rieva Lesonsky said, “Timely delivery is a big factor in satisfaction for
more than one-third of ecommerce customers. Delivery speed is the fourth most important
factor in making the sale.”63 However, even if for some people the fast delivery time is a
major issue, half of the buyers prefer to wait a little bit longer in order to receive a free
shipping, and for 83 percent of them, they are ready to accept one or two days of waiting to
save on shipping fees.64 Furthermore, 85 out of a 100 consumers can afford to wait for five
days or more to get their purchase. On the other hand, almost half of the consumers have
abandoned an online shopping cart because the delivery time was too long or they couldn’t
have a clear idea of the estimated delivery time.65 A few years ago, Amazon came up with an
idea that completely changes the online market, which is Amazon Prime. With this 63 Lesonsky, Rieva. “Why Product Delivery Can Make or Break Your Ecommerce Sale.” Web.Com. September 15th, 2014. [https://forum.web.com/product-delivery-can-make-break-ecommerce-sale/] 64 Ibid. 65 Ibid.
33
membership subscription, millions of items can now be delivered in two-days, as long as the
consumers subscribe to Amazon Prime. The most recent update stated that Amazon has
almost 40 million subscribers. In the United States, around 45% of the Amazon’s customers
have a subscription to Prime.66 The Amazon Prime had a major impact on the customers,
since now, they expect fast deliveries, low prices and a good customer service. The
importance of these aspects is different from a person to another. In the U.S., 19% of
Millennials use this Amazon Prime, compare to 16% for the Gen X, and 11% for the Baby
Boomers.67 These statistics show that younger people seems to grant more importance to the
time of delivery than the older ones. Also, with the emergence of platforms, the buyers now
have the ability to buy almost all the products they want on only one site. The time where we
had to search on different websites to buy a pink suit, or even a new pair of earphones is now
over. Each year, Amazon.com is selling for almost $89 billion, which makes it the most
popular online store in the U.S.68. Amazon’s biggest competitor is without a doubt Alibaba,
which has some impressive statistics and world records. As of the second quarter of 2015,
Alibaba Corporation reports that 367 million buyers had accessed one of their webshops in
the past twelve months.69 However, the most impressive one is definitely the one about the
24-hour sales hosted by Alibaba each year, on the November 11th. In 2014, Alibaba received a
record number of 278 million of orders, from which 42.6% have been generated on a mobile
device, for a total worth of $9.3 billion.70 These facts illustrate that the change in mentality
regarding the “now” effect is real, and that nowadays, almost everyone want to be able to
shop from anywhere, in addition to receive their purchase as soon as possible.
66 Weise, Elizabeth. “Amazon Prime is big, but how big?”. USATODAY. February 3rd, 2015. [http://www.usatoday.com/story/tech/2015/02/03/amazon-prime-10-years-old-anniversary/22755509/] 67 Smith, Craig. “By the Numbers: 80+ Amazing Amazon Statistics” DMR. August 10th, 2015. [http://expandedramblings.com/index.php/amazon-statistics/2/] 68 “Annual Financials for Amazon.com Inc.” Market Watch. 2014. [http://www.marketwatch.com/investing/stock/amzn/financials] 69 “Cumulative number of active buyers across Alibaba's online shopping properties from 2nd quarter 2012 to 2nd quarter 2015 (in millions).” Statista. 2015. [http://www.statista.com/statistics/226927/alibaba-cumulative-active-online-buyers-taobao-tmall/] 70 Shao, Heng. “$9.3 Billion Sales Recorded In Alibaba's 24-Hour Online Sale, Beating Target By 15%”. Forbes. November 11th, 2014. [http://www.forbes.com/sites/hengshao/2014/11/11/9-3-billion-sales-recorded-in-alibabas-24-hour-online-sale-beating-target-by-15/]
34
Summary table - Now effect
Change of mentality:
Increasing of lifestyle speed
Smartphones make people permanently connected People want everything at the instant moment (No more used to wait) Customers want a very fast and reliable customer service Delivery speed is very important for a majority of buyers Emergence of online shopping platforms (Amazon, Ebay, Alibaba)
How marketers react:
Platforms provide customers with a huge variety of products from all around the world on the same site Big Data helps to predict customer behaviour --> Future sales Big Data helps to improve every part of the supply chain Good use of partners expertise (Operational excellence, product excellence, customer intimacy) Key elements: Communication, Collaboration, Control and Connectivity Companies and retailers work with logistic service providers (FedEx, DHL, UPS) Innovations help to improve the communication in the supply chain
How generations react:
People's life are strictly schedule, there's no place for lost time Customers often prefer free shipping over fast delivery Amazon Prime innovation, two-days delivery Platforms are worldwide and gaining more importance each year
Conclusion
New webshops are established every single day, and majority of them are doomed to
failure, as there is no willingness to change old-fashion habits and mentalities. The world is
changing, customers are changing, competition between suppliers is bigger and bigger,
especially with platforms like Alibaba.com, that connect customers directly with producers, in
addition to allow them to save huge amounts of money, as labor costs in Asia are far cheaper
than in Europe or America. How can we answer to that? If we cannot compete with Alibaba
producers in price, we have to find our competitive advantage.
The Knowledge and the quantity of available information about products has increased
rapidly in the last few years. What is new with last generations is the zero moment of truth
(ZMOT), which comes before even buying a product, and helps the consumer to compare all
35
the shops and choose the best proposition in the market. Marketers nowadays have to predict
the behavior of customers and give them individual approach if they want their businesses to
grow.
New generations of customers have different values, they care more about the environment
and ecological issues around them, want good working conditions for people who are
manufacturing their products and also demand trustful relationships with Internet shops. In
terms of delivery, new generations are strongly influenced by the “now effect” and want to
get every product within a few hours. This is a great challenge for retailers as they have to
think about other ways of fast delivery (e.g.: drones) and predict what their customers are
about to buy in next few days.
With five different generations in the market, wide range of product knowledge and the
highest consumers expectations, it is tougher than ever to be sustainable and be the leader on
the market. If you can’t meet the customer´s needs, your competitors surely will.
36
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