Millennials and Generation Z are a key consumer segment — they accounted for a combined 46% of the global population in 2019, according to survey data cited in a recent podcast by Euromonitor International titled “Millennials and Generation Z in the Age of Coronavirus.”
The global COVID-19 pandemic will impact these young consumers at a crucial time when they are reaching key milestones in their lives, as Lan Ha, Population Manager at Euromonitor International, explained in the podcast interview.
Millennials, age 26-40 years old, include both young and established career professionals who may also be new parents or homeowners. Gen Z, age 11 to 25 years old, is now beginning to come of age, complete their education, and move into the workforce.
“The pandemic could be the most formative experience of young people’s lives, given the disruption it may cause them,” Lan Ha observed.
The Ripple Effects of Economic Hardship
During lockdown, a surge in layoffs and reduced working hours hit young people particularly hard, a trend that was also evident in the last 2008 global financial recession. “Historical data shows that during economic recessions, youth unemployment rates rise faster than the overall unemployment rate,” Lan Ha noted.
Euromonitor’s forecast predicts that the average global gross income of those age 25 to 29 will decline by a jaw-dropping 49% in 2020, and a similar trend is also expected for other young age groups.
Due to economic pressure and the limitations of life in lockdown, many younger consumers have already tightened their budgets and focused their spending on essentials like food, housing, health, and education, and they have decreased spending on transportation, leisure, and recreation.
But the pandemic could lead to more grave changes in young people’s lives. Unemployment, reduced incomes, and financial insecurity could lead more individuals to delay important life steps, such as moving out of their parent’s home, getting married, having children, or becoming homeowners.
Stress and Disruption Due to COVID-19
Economic difficulties are not the only challenges facing these generations. Living through the pandemic has caused many changes in everyday life. Gen Z has grappled with school closures and shifts in routine. Many Millennials also face the stress of working from home while simultaneously caring for their families and trying to homeschool their children.
These stressors can impact mental health and cause stress and anxiety. “According to Euromonitor lifestyle surveys, Generation Z is already the most anxious generation,” Lan Ha said. The pandemic may only exacerbate this issue.
Shifting Consumer Habits During the Pandemic
Not all impacts of the COVID-19 pandemic are entirely negative, however. The crisis may also accelerate and reinforce existing consumer trends.
For example, while young people are already fluent in digital technology, virtual living has become an even more entrenched part of their lives during shutdowns, with an uptick in online grocery delivery, music and video streaming, and virtual entertainment events. The emphasis on technology and digital experiences is expected to continue even after the pandemic, according to Lan Ha.
Health and wellness is another trend to watch. Young consumers are known for embracing ethical and healthy lifestyles, but the COVID-19 pandemic will raise their awareness even more. Going forward, young people are expected to pursue fitness goals, cook more fresh food at home, and seek products and services that support their mental health such as meditation apps.
How Brands Can Stay Relevant to These Consumers
According to Euromonitor, there are several ways for brands to win over Gen Z and Millennial consumers during this challenging time:
- Focus on value: Because young people will be more wary of spending, they will increasingly look for value in products and services. Brands should review their pricing strategies or find ways to add value to existing products.
- Support health and wellness: Brands that emphasize health and wellbeing could gain an edge with younger consumers, as this is a top-of-mind concern.
- Boost your digital capabilities: During and after the pandemic, brands should consider new ways of engaging with consumers digitally, such as offering live streaming services.
- Show that you care: Young consumers place high value on social and environmental concerns, and during the pandemic, their expectations for brands have only increased. Brands that find ways to help those in need (such as fashion companies that produce and donate face masks) will appeal to this consumer segment.
Where to Learn More
Interested to find out more? Euromonitor International has released a series of recent reports that analyze the impact of the coronavirus on a wide range of industries, from beauty and personal care to consumer electronics.
Visit MarketResearch.com to view Euromonitor’s reports on the impact of COVID-19. If you need help finding research on a specific topic, don't hesitate to reach out to our research specialists.
About the Author: Sarah Schmidt is a Managing Editor at MarketResearch.com, a leading provider of global market intelligence products and services.