The great wealth transfer will give rise to conscious, brand-aware consumers.
Experts believe that we are standing at the precipice of one of the greatest shifts in history – the transfer of wealth from an older generation to the younger. Millennials and GenZ-ers are poised to inherit a record amount of wealth from the previous generation.
All this wealth translates to new opportunities, and companies will have to come with new ways to attract fresh customers. They must figure out new ways to convince the younger generation to invest with them, and if needed, rethink their branding and operating strategy. The great wealth transfer is set to change consumer behavior in unprecedented ways.
Brands must adapt to the demand of the new-age customer to stay relevant.
Historically, brands and customers shared a transactional relationship. But things changed in the 20th century, as brands worked to promote an emotional relationship with their customers to stand out from their competitors. While Apple promoted innovation, Coca-Cola promoted happiness. This led to the rise of a new breed of customers who identified with the brand and bought products because they associate with its beliefs and value systems. Customers are much more discerning and like to know the brand story and its impact on the world.
This phenomenon has brought to light a very important fact – young people no longer see themselves just as consumers. They wanted to be involved in the creative process and be able to identify with the products and brands they use. Brands need to be conscious of this feeling of community that young, conscious consumers seek.
According to Forbes, some experts are estimating that somewhere between $30 trillion to $68 trillion dollars will be shifted from baby boomers to millennials and Gen X. In the modern post-pandemic world, the survival of brands will depend on how they leverage consumer insights and emerging trends to their benefit.
While there are numerous ways for brands to future-proof their business, it is important to embrace change in a way that matters to the younger generation. First and foremost, brands must be prepared to adopt a test and learn model wherein they evolve along with new products and launches. Other methods include working with new agencies, consultancies, and startups.
One of the most powerful ways to stay relevant is to involve your consumer in the creation process. It will guarantee a new set of customers and brand advocates, but adopting this approach means getting familiar with having uncomfortable conversations, listening to diverse voices, and above all being ready to put the brand above personal agendas.
The great wealth transfer presents a once in a lifetime opportunity to capture the hearts of a young and upcoming generation that will be their customers for the coming few decades. Dividing just $30 trillion between Generation X and millennials in the US means that around 136 million people will have an average spending power of $220,000 per person.
Investing, managing, and protecting wealth over generations requires a great skill set that must be built over time. Brands will have to present themselves as future-ready and relevant. They must experiment with new products and business models without disrupting their core business function. The average age of an S&P 500 company is under 20 years, down from 60 years in the 1950s. It is clear that the times are changing, and along with the needs of the consumer.
As we see the rise of new conscious consumers, brands that fail to adapt according to the times will see their fortunes sinking. While change is hard, it is riskier to resist change.
The pandemic has forced the majority to refocus on what is important and the younger generation is keen to support sustainable businesses and brands that match their values. As we await the great wealth transfer, it is necessary to set our sights on building a future that can be enjoyed by the present and upcoming generations.
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