March 28, 2016

How Gen Zs Are Using Data to Create Preferences and Shape Digital Experiences

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We often think of brands using data to gain insights about consumers, but marketers often forget that they are not the only ones manipulating it. Increasingly, consumers are, too. Any time they state a preference for a music service or tap an option to rate content, they are personalizing their own experience as well. While this may seem a minor point, it underscores a growing trend that could prove highly disruptive to brands in the near future.

To understand why, let’s start with a group market researchers often find useful in predicting future trends: young people. While we typically analyze Gen Zs to figure out what they want, they can also provide insight into where we’re all headed. Gen Zs act as early arbiters, often picking winners and losers before most of us see them. They also serve as guinea pigs and beta testers — not to mention cheerleaders — helping developers improve their technologies along the way. As a result, by the time the majority of us see a service, it responds to our needs much better than it originally did. At one time, only cool kids posted selfies to Facebook — now every grandma can.

Looking at this group today, we can see a big shift in their attitude towards data. They are hyper-aware that they have a huge digital footprint, and that they give brands massive amounts of information about themselves. As a result, they have much higher expectations about how an experience goes. They want to be able to have input into that and even influence and control it. Here are a few recent examples:

YouTube Red. This service was launched with a lot of fanfare, and many think of it as another Netflix or Hulu. But Red has stark differences with traditional streaming services. Those services respond to what you do. Watch a romantic comedy, and Netflix shows you a bunch of romantic comedies. By contrast, Red allows you to take holistic control of your entertainment experience. You choose content types from categories like music videos and TV shows. You can then access that content whenever and wherever you want, without the distraction of commercials. It’s all about you, your choices and your power over your entertainment.

NBA 2K Games. The NBA 2K franchise has been the best-selling basketball video game for years. Part of the reason is MyCareer, a feature that lets you influence the game itself. The way it works is this: You add your own image into the game and become an NBA player. Just like any other player, you can win and lose, gain endorsements, get traded, and even appear on the cover of a virtual copy of Sports Illustrated. The takeaway is that you feel like you’re not just playing the game, you’re actually part of it.

Atom Tickets. This is a fascinating new movie ticketing service that supports (and allows consumers to influence) the social process of going to the movies. To use it, you first propose to a group of friends that you all see a film. Then members of the group buy tickets, which in turn encourages others to join in. Eventually, if enough people sign on, the price goes down. In this way, the service fits right into the activities we all go through to see a movie. We select a film, invite friends, gather a group, and so on. The app itself responds to and rewards that social behavior. What you do in the real world makes a difference in how it responds in the virtual one. As a result, it enables rather than gets in the way.

So what does this all mean? Very likely, consumer expectations of brands will shift in this direction, creating a new set of winners and losers. In the last decade, for example, Apple and Amazon taught us to expect things to be better, faster and more responsive than before. If a retailer didn’t offer free returns or a device didn’t have a range of interesting apps, we went to one that did. In a few years from now, the newer, personalized services mentioned above — along with similar startups in industries like finance, health care, and transportation — will likely move the goal posts again. People will want every experience to reflect their preferences and personality, and will punish those that don’t.

Needless to say, this has big implications for brands. Even today, relatively few of them are even accessing the full data set they collect on their consumers. That will have to change. If they want to stay relevant, they’ll need to dig into that data and allow consumers to leverage it in a much more proactive and creative way.

The good news is that we have time to make the change. Consumer expectations rarely snap to a new reality overnight. Instead, we can watch the behaviors of our future consumers and use them to guide our response to the new landscape. And the quicker we can do that, the further we’ll be ahead of the game.