The youth have rarely played a bigger role in matters of money than they do today. Millennials and Gen Z dominate trends in business and investing now. And these generations are different from the previous ones since they have witnessed dramatic change in their formative years — the tech revolution, the Global Financial Crisis and the pandemic. This week, let’s look at how this generation is transforming the world, before their time.
A recent study by Decluttr says that 47% of Gen Z will not date anyone who doesn’t recycle. The appreciation of global warming is now transforming into a swell of interest in classic, vintage, exotic products. Secondhand products like cars, jewelry, furniture and clothing are becoming an essential part of the circular economy, where Millennials and Gen Z are leading the charge.
A consumer study revealed that 58% of millennial respondents agreed that the resale market plays a big role in the future of sustainability and more than 33% of Gen Zers want to buy second hand. It is also expected that the second hand market will reach USD 51 billion by 2023.
- It gives them a sense of individuality, exclusivity and self expression
- High quality recycled products are more affordable as compared to the brand new ones
- Some of these products market the reduced carbon footprint, which is brag worthy
Mainstream brands need to take notice of this, and encourage recycling. There is a large business opportunity to be derived from recycled products as emotional factors dominate purchase decisions. Recycling has to move beyond waste management to branded products.
Recently, these next-gen investors have been stirring the global markets, especially in the asset classes like equities and crypto. This increased risk appetite has been the growth engine for these assets. Conventional fund managers and platforms are now beginning to create offerings specific to them.
There has been a visible increase in the number of younger, first-time investors this year. Of the 7 Cr. users at the BSE, 38% are in the 30-40 age bracket, followed by 24% in the age of 20-30, and 6% with less than or equal to 20.
- Don't have lot of immediate big decisions in life, hence are open to new and riskier assets
- Are more aware of costs involved, liquidity and speed of transaction
- Gamification of these platforms is enhancing the thrill of transacting
While gamification may improve transaction volumes for DIY platforms, it can be directed instead to positive psychological tools like encouraging savings habits or imparting relevant educational content than just sensory appeals. With regulators watching closely, it will be important for the investing industry to proactively embrace these practices to stay ahead, and yet direct capital to capital markets.
There is increasing recognition of the impact of micro influencers on purchase decisions. These influencers create an online persona through a glimpse of their daily lives and use their personal brands to cultivate followers.
As per a recent survey, 4 in 10 millennials say their favorite influencer understands them better than their friends. 70% of teens trust influencers more than traditional celebrities. No wonder brands are investing a lot here ― the Indian influencer marketing industry is set to reach Rs 2200 crore by 2025 with an estimated growth rate of 25% p.a.
- Celebs are often older whereas influencers are in the same age range as the consumer
- Celebs are seen to be unlikely using the product they recommend, relative to the influencers
- Unlike celebs, influencers interact with their community on a daily basis
Influencers need to be careful if they need to retain their perception of independence. Different business models will emerge with web3 that influencers need to be aware of. How brands interact with influencers and leverage them now needs to be core to marketing strategy, and something for investors to evaluate closely.