Gen Z next in line
Each generation comes with a unique set of behaviors and presents a unique set of opportunities for those looking to reach, engage, and turn them into loyal consumers. 

Gen Z next in line, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news

For the last decade or so, Millennials, or Gen Y, have been the generation for brands to engage with as their spending power grows ever higher. 

But now is the time for fast-moving consumer goods (FMCG) brands to shift their focus to the following generation - Generation Z (12 to 21 years old). 

Why? In Vietnam, by 2025, Gen Z will account for around 25 per cent of the country’s workforce, which translates into 15 million potential consumers.

Traditionally, growth in FMCG has been driven by beverages, beer, and baby products (milk, diapers, etc.). 

The first half of 2018 was tough for all FMCG but the market began to see signs of recovery in the third quarter in almost every category and this momentum is expected to endure. 

To maximize the potential for growth, manufacturers and retailers can no longer rely on organic growth, and need to put much more effort into driving innovation and excellence.  

The market has already witnessed changing trade dynamics from the way manufacturers and retailers are innovating and adapting to new technology and consumers are embracing some of these changes. 

As seen in many other markets around the world, Vietnam will also rapidly move towards the modernization of trade and retail infrastructure but possibly evade some of the challenges developed markets have faced by learning from their experience. 

Nielsen found from studying the upcoming Gen Z that they are much less loyal to legacy and much more attracted to new innovations and changes in the market. They will adapt to this modernization a lot quicker than Millennials and this will have a huge impact on the growth in FMCG and buying behaviors. 

Besides FMCG, the study also shows that categories related to out-of-home activities such as entertainment or dining (for e.g. cinema, tea and coffee shops) will be the next to have major potential, with more than 50 per cent of Gen Z saying they are the main decision-makers in these purchases. Interestingly, for electronic gadgets such as smartphones, laptops, and smart watches, up to 40 per cent of Gen Z consumers said that they are the ones who decide on the brand despite not actually paying for it. 

Though there remains major room for FMCG companies to become more connected with Gen Z by showing how their brands are associated with the values this generation care about, some local giants have recognized this and already capitalized on it via leveraging their brand communication on these values, such as Vinamilk, TH True Milk, and Kinh Do (though the latter now belongs to Mondelez, a lot of Vietnamese still perceive it as a local brand).

Looking at the FMCG landscape, the pie is pretty well shared between local and global brands. Most existing large global brands have been in the market for a long time and have “localized” themselves to a great extent. Nielsen sees global companies adopt a global and regional strategy that resonates with local consumers. They also have more experience driving and funding retail execution and brand strategies that give them a competitive advantage. 

Vietnam is quite a unique market, with a complex distribution matrix and rapidly-changing consumer behavior mostly driven by a high level of “connection”. Winning will not necessarily depend on whether a brand is local or global; it will depend on who is faster in providing a great brand experience and meet unmet or new needs of consumers.  

There are a couple of reasons why legacy brand loyalty is on the decline in the market, especially with upcoming generations: 

• The growth of the trade universe and hence the needs gap of each retailer. This has brought various manufacturers and brands into the markets with a wider variety of stock-keeping units (SKUs) compared to what was available when the earlier generations were purchasing decision-makers. 

• Heavy diversification of media consumption - online, TV, or smartphone - has multiplied consumer touch points many times over. This makes it very challenging for marketers and brand champions to win their share of consumer minds. 

• With increasing modernization of store formats, there is a lot more competition and pressure in-store and at the point of truth. Retailers and manufacturers are paying a lot more attention to execution in-store and swaying decisions during the moment of truth. 

Studies in Vietnam show that the average screen time per day, mainly driven by smartphones, is more than three hours, which may equate to 25 per cent or more of an average consumer’s life. Social media is an intrinsic part of this screen time. 

The capabilities digital and mobile marketing provide gives brands the edge in being able to specifically target their consumer segments. At the same time, however, it is crucial for today’s brands to understand their consumers and what touch points resonate with them. This will give them the most mileage in terms of spending and brand awareness / top of mind. The specific opportunity this channel gives brands is in customizing their creativity to reach different consumers in different ways and hence have a larger impact with one brand. And it is also crucial for brands to tap into this generation of consumers’ connected lifestyles to understand their needs, but it must be personalized / customized and be two-way communication between manufacturers and consumers, driving purchasing outcomes.

In summary:

- Tap into consumers’ “connected lifestyles” using digital assets and data, to understand their circumstances and needs (even before they do!). Provide personalized, customized marketing and programmatic consumption solutions.

- Maximize an omni-channel presence and interactions, extend reach further than the home and the workplace.

- Ensure the brand connects at all levels in all ways - consumers will increasingly take action due to “brand experiences”. The brand must be personable and relatable, making it easy for consumers to communicate with the company and connect to purchase outcomes.

Brands need to understand that Gen Z is the generation with the capability to handle “the many”. They don’t want to lag behind. They have a great desire to stay up-to-date with new things and follow trends. With that in mind, Gen Z will consume more channels than the previous generation. They may spend more time online but will not leave offline. As mentioned above, all companies need to be ready with an omni-channel strategy to capture Gen Z consumers during their omni-channel purchasing journey.

VN Economic Times

Gen Z next in line, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking news
 
*
*
*
  Send