generation covid: part i
TRANSCRIPT
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GENERATION COVID: PART I
Part 1
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01020304
Who is generation COVID?
Love
Social Entertainment
Finances
05 Shopping
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WHO IS GENERATION COVID?
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Defining a generation
COVID has affected everyone. It might be older audiences that have been most impacted physically, but major events tend to have a more significant and longer-lasting impact on those in their formative years.
For this reason, we’re focusing on the youth of the nation – a large portion of which are made up of Gen Z.
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Our approach
Unfortunately, we don’t have a crystal ball.
But, by looking at the data we can see how young people have been affected by COVID, and what this is likely to mean for them in the mid to long term.
In order to better predict which shifts are likely to be long-term, we’ve mainly focused on shifts that are being pushed by multiple forces – not just ones brought about by the pandemic.
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Focusing on a generation but we recognize these trends will impact a larger group too
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LOVE02
38% OF 18 to 24 YEAR OLDS ARE REPORTING THAT
THEY’RE HAVING LESS SEX. THIS INCLUDES 31% WHO SAY IT’S “A LOT LESS”.
YouGov, 2020 8
Love in a lockdown
Younger people’s love lives are bearing the biggest brunt of being in lockdown.
This is unsurprising given this age group are less likely to be co-habituating with partners and the opportunity for sexual activity under lockdown would have largely vanished.
This is off the back of a pre-pandemic decline in sexual activity for both Gen Z and millennials.
Source: YouGov, Enders Analysis 9
Dating apps have capitalized on lockdown, but are preparing for the opening
According to VOX, COVID has made dating harder and more laborious than it was before. In the first week of lockdown searches for virtual dating rose by 400%. Apps are now one of the only ways to meet people, but it can take weeks or months to take a budding romance offline.
Given daters had little choice, platforms like Tinder kept users engaged with the platform by opening up their passport functionality to the masses. This allowed people to interact with others around the globe – when you can’t leave your house, proximity suddenly becomes less important.
But, virtual dating is not a long-term aim – it’s still going to be about taking that virtual connection into the real world. As such, Tinder has teamed up with EverylyWell to provide matches with at-home testing kits. No doubt this will allow Tinder to capitalise on the dating resurgence, but it might even fuel it.
Source Reddit user, KeongManja, Vox 10
In 2018, one male reddit user, KeongManjamapped his Tinder experience over the course of a month. Out of 53 matches, he managed to experience only 4 dates (<8% match to date conversion).
But a new sense of nervousness can get in the way of dating success
Recent research from Campaign indicates a newfound sense of awkwardness associated with heading back out into the world in general, but particularly when it comes to dating.
The study revealed a range of emotions – with 51% feeling apprehensive and expressing concerns via comments like, “Will I have trouble stringing sentences together?”
Whilst the research covered the wider population, Campaign found that young people were 27% more likely to agree that the return to normal life will feel strange.
Source; Campaign - https://www.campaignlive.co.uk/article/clumsy-humans-meet-newly-awkward-post-pandemic-consumer/1714082 11
Implications: Get them match fitLike travel demand, dating demand has been compressed like a spring that will rebound swiftly – provided that it’s safe to do so. This resurgence presents an opportunity for brands across a variety of categories.
Whilst beauty products were down last year, in China the industry has re-bounded from -80% to -20% as the country has opened up again and is now tracking comparably YOY. Similarly, we can expect a move away from comfortable clothes to ones that we want people to see us in (from more than the waist up).
How can brands help to get Gen Z match fit ahead of a post-pandemic world.
DS Smith, Google, ONSI 12
Questions To Ask
How can my brand help them get dating fit (both physically and mentally)?
How might my brand be able to give younger audiences a confidence boost when it comes to dating?
What media contexts become more relevant as IRL dating resumes?
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SOCIAL ENTERTAINMENT
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IT TOOK A 22”TIKTOK TO BRING FLEETWOOD MAC’S ‘DREAMS’ BACK TO THE CHARTS AFTER
43YEARS
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With Gen Z being the generation most likely to use social media as entertainment, in lockdown 58% of Gen Z were using more social media than ever before.
According to Eclincher, when it comes to social media, Gen Z wants to be entertained over purely interacting with friends.
TikTok is a great example of this as it became the #1 top grossing app on the iOS App Store globally in Q2 2020 –aided in no small part by people’s desire for new forms of entertainment.
This popularity has resulted in its instant ability to shape popular culture and influence both the music and film industry.
Social’s increasing influence over culture and entertainment
GWI, TikTok 15
it took a 22 second TikTok to put Fleetwood Mac’s Dreams back on the charts after its
original release 43 years ago.
The social talent pool
While Tiktok stars are being cast in films, the biggest influence has been in music, with the growth of TikTok in 2020 producing some staggering numbers. Over 176 different songs surpassed 1 billion video views as TikTok sounds.
Nearly 90 songs that trended on the platform in 2020 climbed onto the Top 100 charts in the U.S., with 15 of those reaching #1 on a Billboard chart.
TikTok say that music is their universal language, with each song providing a chance to express emotion, create content, make jokes and dance to. TikTok is becoming a talent pool of a new generation of artists. Last year alone, 70 artists that trended on TikTok ended up getting signed by labels.
Source: TikTokYear on TikTok: Music 2020 16
Monitha was an unknown artist, but after her track ‘VICES’ went viral on TikTok she
reached #2 on the music charts
More than just dancing and music
Whilst the TikTok stereotype has us believing it’s all about dancing and music, there’s a far wider spectrum to the content that can be found on the platform.
Last year, entertainment, which comprised of comedic content was by far the most popular genre on TikTok.
Over Covid we have seen big rises in food content, with 151.3BN views for food hashtags. Recipe content that works well is simple, and mixes fun vs fine dining. Most popular recipes last year were Pancake cereal, whipper coffee and donut cereal bowls, fun takes on classics.
There has also been a rise in short form home fitness, seeing an increase in Fit Tok – fitness content on Tik Tok, with 85.7 BN views of hashtag fitness and 681m views of FITTOK.
And an increase in life hacks and advice, as younger generation turn to their peers, with 33BN views of hashtag lifehack.
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TikTok TV
Whilst Gen Z are harder to reach on TV, it seems they still have the ability to influence it.
The popularity of TIkTok and its use as more of an entertainment than a social platform has lead Samsung to make the app an inclusion on their smart TVs in the UK.
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Implications: Get on board before takeoff
Social entertainment apps like TikTok are allowing brands to time travel.
By paying attention to growing trends and personalities, brands have an opportunity to get ahead of the curve.
By tapping into what is making waves with younger audiences on these platforms today, brands can capitalise on opportunities before they skyrocket into the mainstream tomorrow.
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Tokboard.com tracks the top songs on TikTokon a weekly basis
Questions To Ask
Are TikTok artists and influencers currently part of my consideration set for influencers / sponsorship / ambassador deals?
Is there an opportunity to use Tik Tok to talk to a younger audinece about a passion point in a different way?
How does my brand idea translate to short form?
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FINANCES04
DURING THE PANDEMIC GEN Z’S SAVINGS INCREASED
30% FROM 2019, BUT THEY REMAIN THE LEAST
CONFIDENT GENERATION WHEN IT COMES TO MONEY
Source: Aldermore, 2020, Hearst Young Finance Research Sept 2020Question: How confident are you with money? 21
Instability makes security valuable
According to research conducted by Hearst, unlike millennials, who are more motivated by purpose than a pay-check, Gen Z lean more towards financial security. They are embracing saving – with 72% saying that they would take £1,000 and put it in the bank, compared with 55% of millennials (HSBC).
Students and young workers are suffering from the pandemic’s economic fallout more harshly than other groups with nearly half a million more unemployed vs a year ago(National Youth Agency).
The pandemic has also amplified previous trends including low wages, stagnant job markets and rising student debt, all of which will have longer-term effects. Ultimately, COVID-19 has encouraged Gen Z to take ownership of their money by acquiring security and a more meaningful stake in the financial system. They are coming of age with a jobs crunch awaiting school leavers and graduates, combined with a fintech revolution - that’s quite a unique situation.
Source: Hearst Young Finance Research Sept 2020Question: Agree with “I worry that I will have to stay in a job/take a job which I don’t want, just so I can earn a salary” 22
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Gen Z are less worried and therefore more comfortable
than millennials when it comes to staying in a job just for the
paycheck
There’s an app for that
Gen Z are a traditionally sought-after audience but now they will have less disposable income than they did pre-COVID. This doesn’t mean that they will stop spending money, but they are likely to be more conscious when it comes to value and managing their expenses.
This is evident from app usage with Gen Z’s use of finance apps up 60% from 2019 levels.
This not only covers peer to peer payment through the likes of PayPal, but they are also driving the growth in fee-free, simple-to-use brokerage apps like Robinhood and Trading 212.
On the flip-side though Gen Z is also the most likely out of all the generations to take advantage of the buy now/pay later and installment credit options offered by various retailers and payment giants, such as PayPal. Quarterly reports show that 25% of Gen Z are taking advantage of this payment approach vs 15% the quarter before.
So whilst Gen Z are becoming more considered and seeking stability could this growth in credit options spell trouble for the future?
The Pandemic Year in Mobile Apps – GWS, DS Smith, Google, ONSI 23
Financial sting with a side of stigma
Data from the Money & Pensions Service highlights that 71% of 18-24s worried about money once a week or more in the previous month. ONS data supports this with an increasing proportion of 16-24s reporting that they were finding it ‘difficult’ or ‘very difficult’ to get by financially. This increased particularly amongst young men.
Ranked lowest in terms of financial literacy and confidence through their own self-appraisal, it’s clear they want help.
Unfortunately, this is the generation that is most uncomfortable when talking about their finances with family and friends. Despite their worries, 37% of young people feel uncomfortable talking to their loved ones. Nearly half (46%) wish they did feel more comfortable opening up.
Almost a quarter of 18-24s have lied to others about their financial situation to save face, rather than save themselves from any financial predicament they find themselves in.
Source: Hearst Young Finance Research Sept 2020Question: Agree to statement: "I have lied about my financial situation“. ONS October 2020.
Money & Pensions Service24
Implications: Educate and assist
The COVID generation is waking up to the predicament they find themselves in and sensing the need to do things differently with many young people deciding they want to take “control” of their finances and regain self-sufficiency. When you are shown in no uncertain terms what a ‘rainy day’ is you want to have a back-up plan.
But where to start with that back-up plan?
Who to listen to?
Who to talk to?
And what smart everyday choices can I make?
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Questions To Ask
What can we do to help the COVID generation navigate their choppy financial waters?
How can we demonstrate the value you add or how you can help them save?
How can we remove the stigma surrounding money conversations?
Implications: As spending shrinks competitive sets and revenue models expand
A 2020 Schroders Global Investor Study found that investing was the number one goal for millennials’ disposable income over the next year. Saving into a pension was the second most popular answer.
In order to do this though it impacts living and spending. That same Schroders study put spending on holidays and car purchases down in fifth place of what millennials would do with their disposable income.
The generation known for seeking out experiences rather than acquiring assets may pivot, with frivolity diminishing and seeking security rising. This is a trend we could see in Gen Z as well given that they already place a higher value on financial security.
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Questions To Ask
Does what I ‘sell’ need to be bought or are there more appropriate revenue models?
What is my brands real competitor set? What other spending choices is my brand competing with?
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SHOPPING05
IN 2020, THE NUMBER OF GEN Z ADULTS WHO FOUND ONLINE MORE DIFFICULT THAN
OFFLINE SHOPPING INCREASED TO
36%
WARC, 2020 28
Debunking digital only
Whilst online shopping has boomed during the pandemic, it would be dangerous to assume that Gen Z will only purchase online.
In categories like fashion, this audience are actually most likely to take an omnichannel approach – this is also a more typical behaviour in women than in men.
Furthermore, approximately 3 out of 4 Gen Z and Gen Y shoppers are more motivated by in-store experiences than they are by products (experiences being the operative word).*
And as much as online shopping has grown the experience is far from frictionless – with Gen Z in the UK finding it increasingly difficult to shop online.
*Savvy Sruvey, 2019) 29
‘Used’ is the new ‘new’
Whether it’s due to lighter pockets or growing environmental concerns, younger shoppers are buying second hand.
There are now 11.3m “sustainable fashion” hashtags being used. We saw a 400% increase in searches for sustainable fashion 2018-21 and 404% increase in preloved fashion sales since 2018.
Proof of this can be seen with the popularity of platforms like eBay and Depop which serve as second hand marketplaces for fashion. And it’s important to remember that over 90% of Depop users are under the age of 29.
UniLad Gen Z Spending Habits Report, 2020 30
Implications: Make the online experience an experience
What do ‘social commerce’ and ‘online shopping experiences’ have in common? They’re oxymorons.
Think about the in-store shopping experience – it’s a day out. It involves friends. Whilst online shopping is quick, cost-effective, and convenient – it lacks the experience that our audience prizes.
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Questions To Ask
What does our audience like about our current digital and physical shopping experiences?
How can we improve our online experience so that it works in harmony / offers different to our physical one? How do we balanace bricks and clicks?
Implications: Make the online experience entertaining
New technologies can help with this;
- In China we’re seeing online shopping formats that look like a cross between QVC and TikTok
- Platforms are experimenting with AR tech that allows users to try on items of clothing
- Shoppable video is also in the pipeline, meaning the lines between entertainment and social commerce will become increasingly fuzzy
DS Smith, Google, ONSI 32
Questions To Ask
How do we create "positive friction" in the online shopping experience?
What areas of entertainment are relevant to my brand currently (e.g. film, fashion, music, sports, etc.) and how would I make these shoppable?
Is my ecommerce platform ready to take advantage of this new technology?
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For more information
Andrew RaymondStrategy Associate Director
Lindsey JordanJoint Head of Strategy Team