THEIMPACTOFGENERATIONSONMARKETINGSTRATEGIES

eMarketing-Strategiesforfuturesuccess

Frédéric Brodeur (439218)

Štefan Huléni (439266)

Étienne Plourde (439345)

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CONTENTS

Introduction ................................................................................................................................ 3

Timetable of generations ........................................................................................................... 4 Veterans ............................................................................................................................................... 5 Baby Boomers ...................................................................................................................................... 5 Generation X ........................................................................................................................................ 6 Generation Y ........................................................................................................................................ 6 Generation Z ........................................................................................................................................ 7

Marketing strategies among different years ............................................................................. 8

Changes of mentality – Information and knowledge ............................................................. 11

How marketing has to change – Information and knowledge ............................................... 13

How generations react to all of these changes – Information and knowledge ..................... 17

Change of mentality – Values .................................................................................................. 19How the marketing has to change – Values ........................................................................... 22

How generations react to all of these changes – Values ........................................................ 26

Changes of mentality – The “now effect” ............................................................................... 29

How marketing has to change – The “now effect”................................................................. 30

How generations react to all of these changes – The “now effect” ....................................... 32

Conclusion ................................................................................................................................ 34

Bibliography ............................................................................................................................. 36

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Introduction

For the first time in history, five different generations with unique expectations,

experiences, generational history, lifestyles, values, and demographics are in the market. As

all these generations are not alike, nor should marketers treat them in the same way.

Accordingly, many companies are reaching out to multi-generational consumers and are

trying to understand and gain the attention of these diverse buyers.

“Multi-generational marketing is the practice of appealing to the unique needs and

behaviors of individuals within more than one specific generational group, with a

generation being a group of individuals born and living about the same time.”1

-W.Morris

Marketers factoring in the different characteristics and behaviors of each generation are more

likely to build relationships, gain trust, and close business. In fact, creating ageless multi-

generational brands is one of the biggest challenges for marketers nowadays.2 Brands should

try to satisfy the needs of people of different ages and to have customers among all

generations, from very young people to pensioners. Down to this fact, an understanding of

multi-generational marketing is now crucial for companies and their marketers.

The purpose of this work is to describe the change in knowledge, values, characteristics,

technology usage and lifestyle of five generations and their impact on marketing strategies

over a few decades. We are going to mention all the generations of people that are living

today, as well as their features and values. In addition to this, we will discuss what influence

various marketing strategies, from Mass marketing in the 60's to the current modern Internet,

and Social media marketing had on them and how they affected each generation. What also

had a massive impact on marketing strategies was the development of technologies that were

available for different generations from rotary phones, radio broadcasting or first television to

modern smartphones, tablets and computers used nowadays.

1 Morris, W. (1982), The American Heritage Dictionary, p. 549. 2 Himmel, B. (2008), “Different Strokes for Different Generations,” Rental Product News, 30(7), pp. 42-46.

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In the second part of the work, we will discuss how knowledge and range of consumer's

information about products has changed in recent years. What effect will this huge amount

of information have on customers buying behavior? Do suppliers know what exactly their

customers want? Is there any way to predict customer's future behavior? As marketers want to

get more and more information about us and our habits, how people among different

generation react to this kind of approach? Are they afraid of losing their privacy?

The third part of this work is concerned with the question - How people's values have changed

in recent years? Are ecological and environmental issues more important for them then in the

past? Do customers think about working conditions of people who are manufacturing their

products? How important is trust in relation with eShops for consumers of different

generations?

In the last chapter, we are going to discuss what “now” effect is and its influence on

consumers of different age. Are suppliers able to fulfill our need of getting every product as

soon as possible or even better within an hour?

These and many other questions about impact of generations on the marketing strategies will

be discussed and answered in the next few pages.

Timetable of generations

Source: Generations by FDU Magazine and Jeane Meister (2008), 2020workplace.com

As there are various sources with different timelines, names and attributes of generations, we decided to use the generation table by FDU

Magazine and Jeane Meister, which is the most relevant. In addition, we made a little correction and divided the last generation (1980+) into

Generation Y and Generation Z as it was mentioned in many other sources and we found it more accurate

Generation Born Today’s age Targeting

Veterans 1922-1945 70-85 Print media

Baby Boomers 1946-1964 51-69 TV

Generation X 1965-1979 36-50 PC

Generation Y 1980-1994 21-35 Internet

Generation Z 1994- present 0-20 Social Networks

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Veterans

Veterans represent the smallest and oldest generation in the market. In some other

sources, you can come across names like Depression Generation or Traditionalists. As

childhood of Veterans was strongly effected by Second World War and Great Depression in

1929, their values are mostly related to saving, rationing, morals, and ethics. Social tranquility

and family togetherness are also crucial values for this generation.3 In terms of their

characteristics, lifestyles, and attitudes, they rely on tried, true, and tested ways of doing

things.4 The most common technology for Veterans were rotary phones, and they are more

likely to read newspapers or watch TV, rather than using computer with an Internet access.

So, what is the best way for marketers to attract people from Veterans generation? First of all,

it is wise to use themes that stress active lifestyle and that break with stereotypical portrayals

of older consumers and “seniors.” They should not be depicted as helpless or dependent on

someone else.5

Baby Boomers

The Baby Boomers, also called Baboo, Love Generation or Sandwich Generation were

born during the dramatic increase of births between 1946 and 1964. They are the largest and

in many cases career-focused workaholics that value optimism, individualization and self-

expression.6 In terms of their characteristics, lifestyles, and attitudes, Baby Boomers are

idealistic and community-oriented people, who always prefer to live by rules. In terms of

technology, Baby Boomers are mostly print media and TV users and not many of them are

active Internet users.

Boomers generation is very attracted to new products and technologies that will make their

lives easier, save them time, and will not rip them off. They are good market for travel,

3 Hawkins, D.I., Mothersbaugh, D.L., and Best, R.J. (2010), Consumer Behavior, 11th ed., Irwin/McGraw-Hill. 4 Gorrell, M. (2008), “When Marketing Tourism, Age Matters, Expert Says,” The Salt Lake Tribune, May 13. 5 Williams, G. (2005), “Using Multi-Generational Marketing to Target Donors,” Nonprofit World, 23(5), p. 8-13. 6 Koco, L. (2006), “Use Generational Marketing to Reach Boomers, Younger Clients,” National Underwriter Life & Health, 110(20), pp. 26-27.

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adventure vacations, expensive restaurant meals, second homes, recreational vehicles,

maintenance-free homes, personal chefs, personal trainers, motorcycles, and financial

advisors.7

Generation X

Generation X, also known as Baby Bust, Slackers or Why Me Generation was born

between 1965 and 1980. Since the economic situation during that time was hard, the success

for this generation has been less certain. People of Generation X are highly educated, even

though they are pessimistic, skeptical, disillusioned with almost everything, and are very

questioning of conventionality.8 The characteristics, lifestyles, and attitudes of Generation X

include balancing family, life, and work. They do not believe in sacrificing time, energy, and

relationships for advancement and they are generally free agents, rather than team players.9 In

terms of technologies, X's were the first one to use cell phones, and they also frequent

computers and Internet users.

And what is the best way for marketers to attract people from this generation? First of all,

marketers should help them plan for the future and balance work, family, and personal life.

They like initiatives that will make things more useful and practical. Give them a lot of

stimuli, a challenging environment, and flexibility without long-term commitment. Give them

opportunities to learn, grow, and improve.10

Generation Y

Generation Y, also known as Millennials or DotNet was born between the years 1980-

1994 and members of this generation are in many cases children of Baby Boomers. Gen Y

individuals are open-minded, optimistic, goal oriented, and highly motivated toward their

perceptions of success. They are self-absorbed and self-reliant with a strong sense of

7 Leaver, D., and Schmidt, R.A. (2009), “Before They Were Famous: Music-Based Tourism and a Musician’s Hometown Roots,” Journal of Place Management and Development, 2(3), p. 220. 8 Moore, M., and Carpenter, J.M. (2008), “Intergenerational Perceptions of Market Cues among US Apparel Consumers,” Journal of Fashion Marketing and Management, 12(3), p. 323. 9 Lager, M. (2006), “X Ways,” Customer Relationship Management, 10(11), p. 28. 10 Williams, G. (2005), “Using Multi-Generational Marketing to Target Donors,” Nonprofit World, 23(5), p. 8.

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independence and autonomy and want results without being concerned with the why of it.11

Y Generation has a great need for peer acceptance, connecting with their peers, fitting in, and

social networking.12 Members of this generation are very frequent Internet and social

networks users. Moreover, almost each of them owns a smartphone and computer. They use

Internet social networks to keep in touch with their friend and family, but also to do shopping

and get as much information as possible about products they want to buy.

In terms of marketing, important product areas for Generation Y include apparel, accessories,

footwear, room furnishings, action sports equipment, and entertainment. Gen Y likes products

customized to their unique needs, and brand names are also very important. They respond

well to green living and energy-efficient features. They also want products and services with a

purpose greater than the bottom line and are likely to purchase prestige products. Generation

Y people expect competitive pricing, and might want to negotiate based on your competitor’s

advertised price or search results from the Internet13.

Generation Z

Generation Z, in other names Tweens, Generation 9/11 or Generation XD is the

youngest generation in the market. Members of this generation are still children or young

teenagers that had to face several disasters of recent years such as global terrorism, the

aftermath of 9/11, school violence, economic uncertainty and the mortgage crisis in 2008.

Generation Z values authenticity and “realness.” Peer acceptance, as well as “need to belong”,

is very important for them and their self-concept is partially determined by the group to which

they belong. Tweens are a global and diverse generation who come from a wider mix of

backgrounds with different experiences and ideas. They are ready to be on mission, confident,

very optimistic and value security more than ever. Gen Z people believe that they can impact

the world and are quite possibly the most imaginative generation.14 In terms of technology,

members of this generation never lived without the Internet. They are all common modern

technologies users with account on at least one social network and need to stay in touch with

11 Himmel, B. (2008), “Different Strokes for Different Generations,” Rental Product News, 30(7), p. 42. 12 Donnelly, A. (2008), “Playing to the Digital Generation,” Marketing, April 16, p. 19. 13 Himmel, B. (2008), “Different Strokes for Different Generations,” Rental Product News, 30(7), p. 43. 14 Simon, M.M. (2009), “What’s a Tween?”

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their mates as much as it is possible. Many of Tweens are also student bank account and debit

card owners, so they very often use Internet to do shopping.

And what should marketers aim on with this generation? Tweens are discerning consumers

who think a lot about what they are going to wear. Music, fashion, cosmetics, and video

games are very important for Gen Z, specially, in terms of peer acceptance and fitting in.

Some researchers have also predicted that Generation Z will be the unhealthiest and

overweight generation, so gym memberships and health insurance will be important products

and services for this group. 15

What is really astonishing about Gen Z is that children are able to recognize brands from the

age of 18 months. Moreover, kids now influence more than 70 percent of family food choices,

with influence on items bought for them in the 80-90% range. Nearly two thirds of parents say

that their children have an impact on their vehicle purchasing decisions.16

Marketing strategies among different years

Four main periods of the Internet marketing

15 Matthews, V. (2008), “Generation Z,” Personnel Today, September 16, pp. 48-52. 16 Rosenburg, J. (2008), “Mind Your Generation,” Journal of Property Management, 73(6), p. 41-44.

Years Strategy

60's Mass marketing: customer individual needs are not crucial

70's More market research, usage of target groups

80's Marketing databases, more info about customers and more interaction with them

90's Personal marketing- usage of computer technologies

00's Internet marketing

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Marketing strategies, as well as generations on the market, were different in each decade. The

approach of the marketers has been changing with the innovations and new technologies that

were available for people.

Marketing of 60's

Main target groups for marketers were Veterans and older Baby

Boomers. Means of advertising were specially newspapers and

television. Basic feature for this period is mass marketing.

Picture 1: Marketing of 60’s17

17 Pinterest. [https://www.pinterest.com/pin/2744449747958142/]

Substitution(1995-2005)

•Movingfromwarehausestoonlineshops.

Comunication(2005)

•Beginningofsocialnetworksera- Facebook,Twitter,LinkedIn

Platforms(2013)

•Eraofplatformsconnectingconsumers directly withproducers(e.g.:Alibaba.com)•Marketingmixisindividualandnotfixedanymore•Firstgoalistosatisfycustomerneedsascompetitiononthemarketishuge

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Marketing of 70's

Veterans and Baby Boomers are still the main target group, in later

stage Generation X is also coming to scene. Television is the important

mean of advertising. Marketers are doing more market research a target

groups are defined.

Picture 2: Marketing of 70’s18

Marketing of 80's

Collecting more and more information about customers and interaction

with them. It was also the beginning of customer databases. Three

generations in are the market: Veterans, Baby Boomers and Generation

X. Effort to effect the youngest Gen Y by TV commercials is strong as

well (Michael Jackson-Pepsi Generation).

Picture 3: Marketing of 80’s19

Marketing of 90's

Four generations are already in market and also members of Generation

Z are being born. Expanded computer usage and start of personal

marketing. Customer data analyses are becoming far easier thanks to the

new technologies.

Picture 4: Marketing of 90’s20

18 Bodenner, Chris. “When Do Multicultural Ads Become Offensive? Your Thoughts”. The Atlantic. June 22, 2015.[http://www.theatlantic.com/entertainment/archive/2015/06/advertising-race-1970s-stereotypes-offensive/395624/] 19Starwear Status. [https://www.starwearstatus.com/product/michael-jackson-black-and-white-pepsi-commercial-zipper-leather-jacket-by-j-park/20 Sweeney, Daniel. “Throwback Thursday: Salute to the Freshmaker.” The Duncan Daily. November 1, 2012. [http://duncanday.com/2012/11/throwback-thursday-mentos-commercial/]

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Marketing of 00's

Modern Internet marketing that we know

nowadays, in the first decade (2000-2010)

usage of TV commercials, emailing and web

side banners mainly. After launch of social

networks (2010- present), it became much

easier to define and find your target groups

and advertise directly to them. Era of big data

Picture 5: Marketing of 00’s21 analyzes, Internet platforms, cloud

computing and huge amount of information about products, is now available for consumers

on the Internet. All five generations have their place in the market.

Changes of mentality – Information and knowledge

In the previous generations, when someone wanted information about a specific

product or a service, he was going to the shop and asked questions to get the answers he was

looking for. Nowadays, with the emergence of technologies, such as Internet, smartphone or

tablet, it is incredibly easier to get access to all the information you need about a certain

product. Directly from your living room, it’s possible to know within a few minutes all the

characteristics and the reviews of a product, or even to compare it with another one.

Technologies have completely changed the buying process of the customers.

Back in the 60’s, the customer was not that important. The companies were using, for the

majority, the mass marketing, which ignores the different segment of the whole market. The

idea of that type of marketing was to broadcast a unique message that would reach the largest

number of people possible. The main reason why this approach was the most common

strategy at that time was because of the small variety of products on the market. The direct

consequence of this on the customers was that they were not having a lot of choice in the 21 Mick, Blue. “Facebook, MySpace Vow to Stop Sharing Your Private Info With Advertisers.” DailyTech. May 21, 2010. [http://www.dailytech.com/Facebook+MySpace+Vow+to+Stop+Sharing+Your+Private+Info+With+ Advertisers/article18456.htm]

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shops. In fact, local retailers were then adopting a selling strategy with their clients. This

means the focus points were on a short-term relationship, the transaction and the product

itself. Another important point is about the supply driven economy. In other words, the

supplier determined all the types of products, their quality and their prices.

One of the major difference between the customer of yesterday and the customer of today is

that now, people are well informed about the products they want. The access of information is

now available from almost anywhere with our different devices (Tablets, Smartphones, etc.).

There’s a shift in the balance of knowledge from the seller to the customer. With the help of

Internet and the various search tools that are in it, buyers tend to know more information that

the vendor himself. A study conduct in 2013 of more than 1 400 business-to-business

customers reveals that the customers do about 60% of their transactions without even talking

with a vendor or supplier22.

In the previous decades, before the appearance of Internet, companies were controlling almost

all the information. This model is now completely obsolete and the customer journey is way

more complicated then it was before, due to the access of knowledge about products and

services. Internet has brought to the consumer something that was not in the mass media, and

the markets are now smarter, more informed and organized. Customers of today look up for

reviews on Amazon and Facebook, research professional information on LinkedIn, browse on

Google and search on the companies’ digital properties. Another important aspect about the

emergence of Internet is related to the variety of products on the market. It’s now possible for

the customers to buy almost everything online, and from anywhere in the world. With all

these new possibilities, people tend to use more and more their electronic devices to shop and

buy online. The diagram on the figure 1 shows the evolution between 2010 and 2014 of the

daily use of some media. In four years, the daily use of a smartphone increase from 40

minutes to 134 minutes, and from 21 minutes to 163 minutes for the tablet. These numbers

clearly demonstrate the change in the behaviour of people. More than ever, the online

commerce is present and the customers are ready to modify their buying process.

22Sank, Tom. “Dealing with the informed customer.” Qvidian. October 9th, 2013. [http://www.qvidian.com/blog/dealing-informed-customer]

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Figure 1: Average daily media use in the United States from 2010 to 2014 (in minutes).23

How marketing has to change – Information and knowledge

“The paradigm of teaching your customers about what you do has flipped and now

customers walk through the door knowing exactly what they want and what they should pay

for it.24” Customers are more informed than ever, and that changed the way they buy, use and

evaluate goods and services they purchase. In fact, this is not a problem for the companies, as

long as they adjust their marketing strategy and don’t stay behind the others. It’s then

essential for them to investigate the changes to be able to know what is happening and why

they are happening, in order to respond to it.

The main goal of today’s companies is not help to sell, but help to buy. This means the selling

strategy has become a marketing strategy, where the focus is on the consumer, and a long-

term relationship with him. Instead of a supply-based product, companies now concentrate

their efforts on the customer requirements and on a customer-oriented service. To be able to

get a big market share, the retailers have to enhance their customer experience and have to 23 “Average daily media use in the United States from 2010 to 2014 (in minutes).” Statistica. [http://www.statista.com/statistics/270781/average-daily-media-use-in-the-us/] 24 Newman, Daniel. “How to sell to the informed customers.” Huffington post. July 13th, 2014. [http://www.huffingtonpost.com/daniel-newman/how-to-sell-to-the-inform_b_5309839.html]

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provide a better service. A survey conduct by CEI Research revealed that 86% of buyers are

willing to pay more for a better consumer experience25. This statistic is interesting, because it

illustrates how the service has become important for the buyers.

“62% of global consumers switch service provides due to poor customer service

experiences.”

– Accenture global consumer pulse survey26.

If they are not satisfied, they will go away and see another retailer. This is the reason why

companies are now according so much importance on the consumers. They know that it costs

more money to acquire a new customer than to keep an old one. Companies have to find a

way to provide experiences that integrate innovation, data and technologies to create strong

relationships with their customers.

After the emergence of technology, the mass effect has become useless due to the big variety

of products on the market. Marketers had to found a way to be closer to the customer, to make

it more interactive and individual. Customer database is the key for the companies to build a

relationship with all of their customers. When buyers enter in a shop, they want to be known

and recognised. They want to be in an environment in which they feel comfortable and where

they are free to choose whatever they want. The challenge for the retailers is then to collect

the relevant customer information to be able to adapt their service subsequently. To reach that

goal, the suppliers have to collect as many data as they can about their clients. They can

record each customer’s transaction history (what they purchase from them, when and how

often), accumulate consumer data every time they interact with the company (via mobile,

online, in-store or in a survey), and use the location-based technology. However, data itself

don’t reveals anything, the suppliers have to create the information out of it. This means that

they have to filter the information, in order to create a profile that will be consistent with what

products they sell. Globally, customer database helps to define a clear picture of who is the

target customer, how to communicate with them, advertise them and market with them. Once 25 CEI Research. “Why you need to reprioritize your customers.” Rosetta. [http://www.rosetta.com/why] 26 Accenture global consumer pulse survey. “Why need to reprioritize your customers.” Rosetta. [http://www.rosetta.com/why]

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a shop knows exactly what is their ideal consumer, it is easier to understand their needs, and

then to communicate them the right offers, to eventually increase the sales. Of course, to

achieve all of this, companies have to invest money in the technologies that will allow them to

handle the volume, the velocity, and the variety of the big data, such as Hadoop, the most

commonly used framework, which collects data, and also provides tools to analyze it.

“Understanding who your customers are and how they behave enables you to target the

right people. However, understanding why they behave the way they do enables you to

adapt the message, channel and frequency for a higher degree of relevance, which drives

acquisition and retention rates.”

-Rosetta27

To adapt themselves to the changes that occurred in the last decades, companies have to

create awareness of a need that the customer may not even know he had. In some way, they

have to know the customer better than he knows himself. “The aim of marketing is to make

selling unnecessary.” This quotation of Peter Drucker, management consultant, educator and

author, has never seemed this true. Companies such as Amazon represent a great example of

success in this challenge. Jeff Bezos, the founder and CEO of Amazon, claims that his

company can predict what products their customers will order one week in advance 70% of

the time28. Furthermore, when you buy a product on Amazon, they always propose you

another product linked to the other one, to add to your cart. By doing so, Amazon is able to

sell things that people would have not necessarily bought in the first place. All these processes

are due to the customer database. Since many years, Amazon uses data to built a

recommender system that suggests products to people who visit their website. This means that

each customer and each user can see customized results. Using a different approach, LinkedIn

is doing the same with their prediction system “People you may know”.

Another challenge is related to the social media. With the emergence of websites such as

Facebook, Twitter, LinkedIn and Instagram, the amount of information about diverse products 27 CEI Research. “Why you need to reprioritize your customers.” Rosetta. [http://www.rosetta.com/why] 28 Molenaar, C. (2015) “Why customers would rather have a smartphone than a car: Relationship retailing as an opportunity. “ p.29. United Kingdom: Gower Publishing.

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is way more important than in the past. To face this new reality, companies can’t just sit and

watch, they have to be active on these media, to participate in the conversation, not just

advertise it. Moreover, they have to find ways to encourage their customers to talk about their

satisfaction of the products. By doing so, companies will show to the consumer that they want

to offer a better customer service and that they are engaged with them. As an example,

Starbucks launched this year the movement “Tweet a Coffee” to build awareness of the brand

and engage customers. In addition to provide giveaways, Starbucks regularly creates content

that encourages their customers to “like”, “comment”, and “share”. The impact of social

media on revenue is getting higher each year. In America, social media influences 36 percent

of sales and this percentage is expected to increase up to 52 per cent by 201829.

The graphic in the figure

2 illustrates clearly how

important it is for the

companies to be on the

social media. The

difference between a fan

and a non-fan can be

very considerable. For

ZARA, the difference is

evaluated at 354$.

Globally, the average

difference is 116$ per

year.

Figure 2: Average Spend in 2013 between fans and non-fans.30

Another important aspect that companies have to consider since the arrival of technologies is

the website. Same if you think local, you have to view global. In the past, customers were

hesitant to buy online because of a lack of knowledge of this medium. Since a few years,

people are getting more familiar with the Internet and use it more often, as a research tool or

also to buy products. This means that if the retailers want to survive, they can’t just sell in the

physical shops, they have to sell online too. However, to obtain a successful multi-channel 29 Molenaar, Cor. (2015) “Why customers would rather have a smartphone than a car: Relationship retailing as an opportunity. “ p.134. United Kingdom: Gower Publishing. 30 Scissons, Michael. “The value of a Facebook fan 2013: revisiting consumer brand currency in social media” Syncapse. April 2013. [http://www.slideshare.net/alfonsogadea/value-of-a-facebook-fan-2013]

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strategy, suppliers first have to clarify if the customer is looking for information or to make a

purchase on the website. This will help the company to create the website that will fulfill the

needs of the customers. Although, the information on the website must be convenient,

relevant and easy to use for the customers. If the interface is not well structured, the

customers won’t waste their time to search what they need, they will go see the competitor’s

website. According to SME Website Statistics, 94% of people cited web design as the reason

they mistrusted or rejected a website31. To facilitate the buying process of the customers, the

suppliers should have three main sections, which are the company information (What we

stand for, Our products/services, Contacts, etc.), the product information (Practical

information, videos, user manuals, FAQ, etc.) and the topic information (Around the

customer’s issue or theme)32. This information will guide the customers in their buying

process and will provide them a better-informed purchase.

How generations react to all of these changes – Information and knowledge

Regarding to all the changes that occurred since the emergence of technologies, it’s

obvious that the generations are not responding in the same way. Same if people are accepting

Internet more and more, the major online shoppers are young people and families, over older

people, who use the Internet less often and more as a resource tool.

Since the past 10 years, the percentage of online adults who use social networking sites, such

as Facebook, Twitter, LinkedIn and Pinterest, has incredibly risen. Last January 2014, 74% of

all online adults were using social networking sites in the US. The problem is that the older

generations are not using these websites as much as the younger people. 89 % of the adults

between 18 and 29 years old (Generation of the 90’s and +) use the social networking sites,

compare to 82% for the adults between 30 and 49 (Generation of the 70’s and 80’s), 65% for

the adults between 50 and 64 (Generation of the 60’s), and 49% for the adults between 65 and

older (Generation of the 50’s and -)33. These statistics reveal that same if the shops try to

implement a social relationship with all their customers through the social media, it’s more

31 SME Website Statistics. February 27th, 2014. Rareform New Media. [http://www.ironpaper.com/webintel/articles/10-web-design-statistics/#.ViTgqryV_zI] 32 Molenaar, Cor. (2015) “Why customers would rather have a smartphone than a car: Relationship retailing as an opportunity. “ pp. 80-81. United Kingdom: Gower Publishing. 33 “Social media use by age group over time”. Pew Research Center. January 2014. [http://www.pewinternet.org/data-trend/social-media/social-media-use-by-age-group/]

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difficult to reach older people than the younger one. Therefore, same if there has been a rapid

growth of Internet, smartphones and tablets use amongst the older generation in the past years

(An increase of 59% for the generation of the of the 60’s between 2005 and 2013)34, retailers

still have to find other ways to communicate properly with older people.

Nowadays, the English has become the most common language use internationally. To adapt

themselves to this new reality, the webshops have to include an English version of their

website, so that they can attract more customers. However, generations react differently in

regard to the language barrier. A lot of people from the older generations are not use to the

English and are not familiar with it. The direct impact of this on the online shopping is that

older people tend to buy more locally, because it’s only in these webshops that they are able

to understand the language. On the other hand, younger people are, for the majority, very at

ease with English. This ability allows them to catch more opportunities, because they can

shop and buy abroad on Internet. The variety of the products is then bigger and they can get

better prices when they shop elsewhere.

In our opinion, the notion of privacy is another point on which the generations don’t share the

same point of view. As we stated earlier, the emergence of technologies has brought another

dimension of the customers. The companies are now collecting as much data as they can

about the consumers, so that they can know them better in order to provide them a greater

service. We haven’t been able to find statistics to confirm our statement, but we think that old

people are less incline to give their personal information to the retailers because they are

afraid that this would break their privacy. The consequence of this decision is that the retailers

can’t, without personal data, formulate good personalized-offers to these people. Generally,

younger people don’t have any problem to share their information with the retailers. This

allows the companies to analyze the customer behaviour of each consumer, and then to

communicate them the right offer to fulfill their needs. The major difference between the

older generation and the younger one is that the older seems to have no interest in creating a

relationship with the retailers whereas the younger people are ready to share their information,

in order to obtain a better customer service.

34 Ibid.

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Summary table - Information and knowledge

Changes of mentality:

People are more informed about the products/services

Access of information --> ZMOT

Appearance of technologies (Internet, tablet, smartphone)

Variety of products (Shop worldwide on the online market)

How marketers react:

No more about help to sell, but help to buy

Focus is now on the customer itself (Experience and service)

From a supply-driven to a demand-driven economy

Introduction of the customer database (to collect info on customers)

Analyse the data to create the information out of it

Try to create awareness of a need for the customers (Ex: Amazon)

Be active on social media (Create content and participate)

Create a website, in order to sell online and in physical shops

How generations react:

The major online shoppers are young people and families

The percentage of online adults who use social networking sites has risen

It's more difficult for marketers to reach older generations

Generations react differently in regard to the language barrier

Older people are less incline to give their personal information

Change of mentality – Values

Since a few decades, it has been possible to observe a clear change in the mentality of

the people’s values. These changes are quite manifold but nevertheless, some seems to be

much more relevant for the community. Vanessa Merit Nornberg explained it well, “Younger

generations are much more conscious than previous ones to the impact their spending

decisions can have on the world around them”35. Customers of today now care more about

their ecological footprint, about the living condition of the others and, they also want to be

able to trust people in our globally connected world’s.

35 Merit Norberg, Vanessa. “Why 2014 Will Be the Year of the Informed Consumer.” Inc. January 2nd, 2014. [http://www.inc.com/vanessa-merit-nornberg/why-2014-is-the-year-of-the-informed-consumer.html]

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More than ever, the human beings are getting more and more concerned about the

environment and the planet they are living. Many reasons can explain this change of

mentality. For some people, it’s because they are nature lovers and prefer to live near green

places or even in the woods than to live directly in the city center. For others, it’s because

they want to leave a healthy planet to their descendant, so that they could enjoy life as much

as their ascendancy did. Even in the business sector, people tend to carry much more about

the environment issues than in the past. Because people care about how the others perceive

them, environmentally friendly companies are now getting very popular and often have

impressive success. A company such as Tesla Motors would be an excellent example of a

successful business model that highly considers the environment in their different products.

Furthermore, electric and hybrid cars gained more popularity in the last years, same if they are

both more expensive than the common fuel cars.

In fact, take care of the environment is not only to look good in front of the others, but it’s

also a real problem that companies and customers have to take into consideration. In diverse

sectors, such as insurance, tourism, food and energy, meteorological events and climate

change create an important risk, and it’s why it’s important for them to preserve and protect

the environment, in addition to deploy some strategies to improve their environmental and

economic performance.36 In brief, both customers and retailers tend to care much more than

before about the environmental issues and are ready to change their behaviour in order to slow

down the climate changes.

With the important immigration from the tier-world and from Asia to the occidental countries,

people seem to have developed a greater open-mindedness and they are getting more and

more sensitive about the living conditions of their peers. Nowadays, almost everybody is

aware about the cheap labor around the world. The main reason why big companies like Nike

are using cheap labor to produce their product is fairly simple, it’s to reduce their costs. By

doing so, they can offer their products at the consumers at a lower price, so that they get more

competitive against the other companies. However, people now care about this problem. They

are even willing to pay more for a certain product, if they have the warranty that the ones who

36 “Developing a green business mentality.” European Commission. May 22th, 2014. [http://ec.europa.eu/environment/news/efe/articles/2014/05/article_20140522_08_en.htm]

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are involve in the production of what they are buying, are treated well. It’s also why non-

profit organizations such as Fairtrade® exist. These international organizations worked to

insure that there is a minimum fair wage that is respected and that the working conditions

provided by the employer are decent.37 Another important non-profit organization is the Fair

Labor Association (FLA). The President Bill Clinton established it in 1999, and it’s composed

of universities, businesses and civil society organizations. This institution has been created

after some huge scandals related to child labor and some big sports brands.38 To conclude,

these associations are the concrete evidence that people are getting more concerned about the

working and living condition of the other human being in this world.

In the last centuries, people were going to the local shops when they had to buy something.

They knew the sellers, they knew the shops, so in brief, they were in charted territory. Since

the emergence of the Internet and mostly since the emergence of the e-commerce, people

don’t know anymore the sellers. In this new reality, customers may not even know were the

shops are located, but in fact, it doesn’t really matter, because they are able to see the products

via their webshops, and then to make it delivered directly at home. It can be 10 000 kilometers

away from it, it might be in a country were they don’t even speak their language, but is it

relevant? In fact, one of the most important point is that web sellers need to provide English if

they want the customers to shop on their website and it’s trust. The customers need to feel that

the website represents a safe environment, during all the buying process. Patrick Coombe says

it well, “Trust is the single most important factor that will determine whether or not a

customer will complete an online transaction or hit the back button.”39 It’s hard to gain the

confidence of a customer, but on the other hand, it’s also incredibly easy to lose. In the past

decades, when people were shopping in a physical shop, this kind of fear was not present, but

now, since people are providing their personal information, their bank account number and

their credit card number, they are scared that all these data could be use in an inappropriate

way. In the past years, the number of companies and online shops have increase so much that

a customer can easily switch from a webshop to another if he doesn’t trust the previous one

37 “Fairtrade Standards” Fairtrade. 2012. [http://fairtrade.com.au/page/fairtrade-standards] 38 “Fair Labor Association” Wikipedia. March 19th, 2015. [https://en.wikipedia.org/wiki/Fair_Labor_Association] 39 Coombe, Patrick. “Do Your Customers Actually Trust You? Injecting Trust into Online Commerce.” Moz. June 19th, 2013. [https://moz.com/ugc/do-your-customers-actually-trust-you-injecting-trust-into-online-commerce]

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anymore. The confidence is now, more than ever, a shared key point. This being said, the

buyers and the sellers need to mutually trust each other.

Obviously, these three values are not the only one who seems to emerge, but in our opinion,

they can be classified as the more important ones. With the globalization and the better level

of education, people now have a better idea of the world they are living on. They are also

feeling more empathetic to the others, since now, with the immigrations from all around the

world, the population is more in touched with these peoples. For some, they are part of their

family, they are friends, they are colleague or even though their neighbour. Finally, people

need to feel that there’s a climate of confidence between the sellers and them to do business in

a trustful environment.

How the marketing has to change – Values

Mentalities have change since the last few decades and as the time between each

generation tend to decrease; the values are changing way faster. But the three values presented

in this work aren’t going to change soon, because now, they are all, in a way, mandatory.

Avoid them may lead to major consequences on the planet’s health and because we all want a

beautiful world, we are all concerned about them. The marketing needs to consider these new

values, because from the eyes of the buyers, it adds a plus-value to the product they are

considering to buy.

If someone could travel in time and return back in the 60’s or the 70’s, he would notice that

nobody was really caring about the environment except the hippies. They thought that the

planet would exist forever and that all the resources would be unlimited. They can’t be

blamed, because even the science didn’t know it, but today, the situation is clear. We are now

all familiar with the climate change and the destruction of the fauna and flora. So nowadays,

as people are getting more and more concerned about the environment and about taking care

of it, marketers need to develop a new strategy that fits with the new market. In the past years,

when you were watching a car advertisement, you were always hearing about how this muscle

car was faster and more powerful than the other cars with his big V8 block, because it was

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what the consumers wanted to hear and that’s how the marketing was working. At that time,

nobody was caring about the consumption or the pollution of these big cars. They wanted to

hear the sound of the motor and smell the gas getting out of the exhaust. We don’t really see

those types of advertisements anymore, because the needs and the mentalities have changed.

People now want environment-friendly cars. It’s the main reason why today, the marketing

tendency demonstrates how a new car is fuel-efficient, how it has the lowest emission in his

category and why they always try to beat record in these previous aspects. It’s also why the

biggest car brands are offering so many electric cars, hybrid cars, very low consumption cars,

because the human beings are changing their consumer’s behaviour. Basically, the buyers are

searching for brands that represent their values. In order to attract the more potential

consumer possible, the brands now have to follow the trends and the new values. A study

published by the Harvard Business Review found out that 64% of the consumers considered

shared values as a primary reason of a strong brand relationship.40

Many companies and retailers change their marketing strategies and now associated

themselves with non-profit organizations or charity work to enhances their image and also be

more relevant and attractive to the customers. It has been mentioned earlier in the work that

people were caring more about the living and the working conditions of the workers than ever

before and even more since almost everything we buy comes from Africa, the Middle/Far

East or the Asia, where cheap labor and bad working conditions are part of the day to day life.

The research of Harvard Business Review also mentioned, “Most customers aren’t

particularly loyal to any one business, but they are loyal to what the business stands for” 41.

It’s one of the main reason why showing what you are standing for is a part of the new

marketing strategy. Demonstrating that you only work with suppliers who are accredited by

Fairtrade or the Fair Labor Association helps you to indicate that you also care about all the

workers who, near or far, are supplying you. It enhances your image and your social impacts.

There are also other examples of this kind of stance on issues, such as the TOMS’ shoes who

have their own “One for One” movement where they are giving one pair of shoes for every

40 Ciotty, Gregory. “The Art of Customer Loyalty.” Help Scout. [http://www.helpscout.net/customer-loyalty/#two] 41 Ibid.

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sold one to someone who needs it. Moreover, Timberland, with their G.R.E.E.N Standard, put

in the same team profitability and community to give back to others.42

The emergence of online businesses changes customers’ buying experience and the marketing

has to react and prove to everyone that online shopping is as safe as physical shopping. This

issue helps to develop many technologies that become a true hub for the online shopping

process, such as PayPal (the most used payment process), Transport Layer Security or Secure

Socket Layer (“cryptographic protocol designed to provide communication security”43). The

use of trusted payment process in webshops is primordial for their success and beside that,

customers need the assurance that their intimacy is well protected, that their data are well used

and that they can’t be thief. First thing first, let’s talk about PayPal. This service was founded

in 1998 and it’s now available in 203 markets around the world, allowing their 169 million

customers to pay in more than a 100 currencies.44 In fact, PayPal is the world digital wallet

leader with 79% usage rate, beating out his entire direct competitors such as Amazon,

Starbucks and Google Wallet.45 Furthermore, more than 4 billion payments have been process

through PayPal in 2014, and there are already 1.16 billion payments in the second quarter of

2015, which represents an increase of 25% for the same period one year before.46 Even the

number of payment process by an account has increase from 23 to 26 per year. This illustrates

that payment facilities such as PayPal can encourage people to trust the online shopping.47

This being said, the most important statistic that proves that people trust PayPal for their

online shopping is definitively the one regarding to the increase of customers and average

customer spending. As a matter of fact, “According to Nielsen Online Buyer Insights in 2013,

businesses that integrated PayPal into their system increased customers by 27%, and doubled

customers spending.”48 There’s also Alipay.com, a third-party online payment platform

introduced in 2004 in China by Alibaba Group.49 These services provide a new payment

method, where the consumer has the power, instead of the sellers, but how can the buyer have 42 Ciotty, Gregory. “The Art of Customer Loyalty.” Help Scout. [http://www.helpscout.net/customer-loyalty/#two] 43 “Transport Layer Security”. Wikipedia. October 2nd, 2015. [https://en.wikipedia.org/wiki/Transport_Layer_Security] 44 “PayPal About” PayPal. 2015. [https://ca.about.paypal-corp.com] 45 Chan, Elliot. “6 Stats That Prove PayPal Still Matters for Businesses.” Control. August, 2015. [https://www.getcontrol.co/blog/6-stats-that-prove-paypal-still-matters-for-businesses/] 46 “PayPal About” PayPal. 2015. [https://www.paypal.com/us/webapps/mpp/about] 47 Ibid. 48 Chan, Elliot. “6 Stats That Prove PayPal Still Matters for Businesses.” Control. August, 2015. [https://www.getcontrol.co/blog/6-stats-that-prove-paypal-still-matters-for-businesses/] 49 “Alipay” Wikipedia. August 21st, 2015. [https://en.wikipedia.org/wiki/Alipay]

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the power? Well, it’s quite simple. When someone buys something on AliExpress through

Alipay, the money is withheld until the buyer is happy and completely satisfied of the product

he had just bought. Then, the money is transferred to the sellers and because of this, the

population of China regain confidence in online purchasing.50 This new way of processing is

easily making is way throughout the modern online shopping and helps buyers to not be afraid

of the e-commerce process.

The second things that really helps the customer to trust a webshop, is the presence of Trust

Marks. We find much Trust Marks, such as SSL Certificate, McAfee Secure, Truste and many

others. In the U.S., 93% of the online shoppers say that it’s important for a webshop to

include a Trust Mark of some kind in their site.51 These Trust Marks assure the security and

the privacy of the customers for the whole time he is on the site or provides data, like personal

data or financial data. Finally, an important marketing strategy for a website, despite the

secure online process and the data encryption, is the testimonials from genuine happy

customers. This reflection came from the power of Word of Mouth (WOM) marketing and

basically, “What others say about you is easily 10x more powerful and convincing than what

you said about yourself”52. Based on that, every webshop should provide a review section. It’s

also why many brands or shops associate themselves with celebrities and well-know persons

who have a huge amount of followers on social media. Those types of associations also help

the buyers to trust the sellers, because they think that if the famous celebrity agreed to be

viewed with these brands or shop, it’s because she trusted it.

As a conclusion, marketing reacts to these changes of values by adopting a new image, a more

environmentally friendly one. The companies also associated themselves with major

renowned organizations that fit with the new values and tendencies. Finally, the creation of

new technologies helps to provide the customer a trustworthy online shopping environment.

The marketing will never end to change as we now lived in a world where everything evolves

rapidly that it must adapt itself constantly and react as fast as possible, otherwise it won’t

follow the consumer needs. 50 “Alipay” Wikipedia. August 21st, 2015. [https://en.wikipedia.org/wiki/Alipay] 51 “Top 10 Ways to Build Trust for Your Online Store.” webShaper. 2013. [http://www.webshaper.com.my/learn/top-10-ways-build-trust-online.php] 52 “Top 10 Ways to Build Trust for Your Online Store.” webShaper. 2013. [http://www.webshaper.com.my/learn/top-10-ways-build-trust-online.php]

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How generations react to all of these changes – Values

The reactions about the changes that occurred in the marketing concerning the values

are pretty variable depending on the generation. Most and foremost, they seem to touch

everybody, from the digital born to the Grandparents.

Since a few years, almost everybody, regardless of their age, seem to care more about their

impacts on the planet and marketers are following the same path as well. Even if many of

them weren’t used to these tendency, it was almost mandatory to step in the new boat,

because otherwise they would have sunk. It’s why producers and marketers introduce new

innovations corresponding to these new trends. At first, the success was not the one

anticipated, because all these things were new to the buyers. Since the tendency begin to gain

more and more people from all ages, the consumers begin to change their habit and their way

of living. In this way of thinking, we can

understand why green vehicles such as

plug-in hybrid and electric cars are

gaining so much popularity around the

globe. Even though, some owners use

those cars to make an environmental

statement, but it’s still a good thing.53

Some people own these types of car to

follow those new tendencies, or to adopt

these new values.

Fig 3. Electric vehicle sales in 2013 and 2014 in the UK54

In the UK, the sales of plug-in hybrid and electric cars are growing increasingly fast

(respectively increased of 454% and 181% between 2013 and 2014).55 Since we know that

these types of cars are not the cheapest ones, even if the government is giving some huge

subventions to the buyers, the majority of the buyers aren’t young adults who are getting out

53 “Green vehicle” Wikipedia. October 2nd, 2015. [https://en.wikipedia.org/wiki/Green_vehicle] 54 Nichols, Will. “UK electric car sales surge in 2014.” The Guardian. October 7th, 2014. [http://www.theguardian.com/environment/2014/oct/07/uk-electric-car-sales-surge-in-2014] 55 Nichols, Will. “UK electric car sales surge in 2014.” The Guardian. October 7th, 2014. [http://www.theguardian.com/environment/2014/oct/07/uk-electric-car-sales-surge-in-2014]

27

of school. So these numbers are the real proof that multiple generations rely themselves to

these new values and buys these new innovations. The marketers are working hard on to

provide more models each year to satisfy every different consumer and so far, it seems to be

effective.

Concerning the fair working conditions, it follows the new trend to live in a better world,

where everyone is equal and have decent living conditions. This being said, it’s not surprising

to see an increase in the number of associations who work in the same field as Fairtrade or the

Fair Labor Association. As a part of these new values, marketers found out that the products

that corresponds to them, had a plus-value for the customer. This means that the buyers is

ready to pay more for a product because it has the seal proving that it is respecting the fair

working conditions and in fact, these products are often more expensive than the other

because the workers were paid more. The modern consumer seems to has a more developed

social conscientious and marketers know it, so they change their marketing strategies and

focus more on these added values and as we know, people are choosing brands and certain

types of products because of the image it projects. In fact, the brands that rely themselves to

these values attract new customers and gain popularity. This affects all the generations,

because the diversity of products that responds to these standards are increasing year after

year, so anybody can change his buying habits. The customer seems to appreciate that their

buying habits can have a positive impact for many workers and producers around the world.

Nowadays, as long as a person has a credit card and at least 18 years old, she can shop online

but if she does so, she wants to do it in a trustful environment. This being said, it’s not even

surprising to see grandparents 70-plus using Internet to shop. rA research even found out that

“Adults 50 years old and above represent the Web's largest constituency, comprising one-

third of the total 195.3 million Internet users in the U.S.”56 These persons who were born a

long time before the arrival of the computer are rarely the ones who are the most confident

when comes the time to use a computer and we used to say that we trust what we understand.

Even though, the seniors are getting more and more involve in online shopping because

webshop and the online buying process is getting more user-friendly and more

comprehensible. In fact, two out of three Americans of 50 and above, of the one who compose 56 Abramovich, Gisele. “15 Mind-Blowing Stats About Online Shopping”. CMO. May 7th, 2014. [http://www.cmo.com/articles/2014/5/6/Mind_Blowing_Stats_Online_Shopping.html]

28

the 195.3 million of Internet users in U.S., are buying from online retailers.57 Furthermore,

with all the improvements in the security issues, people are gaining confidence in regard to

online shopping. But, our first thought could have been that many adults of all ages, maybe

more 50 and above, stick to the old fashion way of going into physical shops. Often, people

don’t like changes and prefer to keep a winning formula instead of experiencing new stuff.

But many statistics are showing the wide generation’s spread tendency to shop online. One of

the most advisory and influential firms in the world, Forrester research, found out some

interesting statistics about the differences in the generations in 201458:

“Forrester found that more than three-quarters of 57,499 U.S. online adults surveyed had

ordered products or services online. And while Gen Y adults (ages 24 to 32) are the most

likely to have done so, Gen Xers (ages 33 to 46) spend the most. With an average $561 in

spending, Gen Xers spend about 15 percent more online than Gen Yers ($489), and roughly

25 percent more than the average online adult ($449).”59

- Giselle Abramovich

To conclude, every living generation is affected by the new marketing strategies and even if

sometimes it seems that these changes are not quite popular, peoples ended by understanding

the reasons behind these changes. They find them relevant enough to change their buying

habits and their lifestyle in order to adapt to those new values. By doing this, they show that

they care more about the impact that their presence has on this world. Finally, many of them,

regardless of their ages, use Internet to shop online more often than ever and the e-commerce

is increasing at an impressive rate, which proves, in a way, that they trust the online shopping

process.

57 Abramovich, Gisele. “15 Mind-Blowing Stats About Online Shopping”. CMO. May 7th, 2014. [http://www.cmo.com/articles/2014/5/6/Mind_Blowing_Stats_Online_Shopping.html] 58 “About Forrester” Forrester. 2015. [https://www.forrester.com/marketing/about/about-us.html] 59 Ibid.

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Summary table - Values

Change of mentality:

Human beings are getting more concerned about the impact of their

decisions

Business sector is facing environment issues and needs to improve their

environmental performance

Environmentally friendly businesses are getting very popular

People are conscious about cheap labor and hard working conditions

Fairtrade and Fair Labor Association (International organizations)

Trust issue in E-commerce (Don't know or view the seller)

Fear of an inapropriate use of the customer information

How marketers react:

Respect the values of the customer end to a plus-value on the product

In car industries --> From a performance to a low consumption ads

Companies and retailers associated themselves with charity and non-profit

organization

Companies and retailers need to show for what they are standing for

Development of new technologies to improve customer safety online and

during the buying process

PayPal & Alipay (Online payment process), TLS & SSL (TrustMark,

Communication safety)

Power of Word of Mouth (what people say about you as a seller)

How generations react:

Changes touch every generations, but in different ways

People own things to follow tendencies and be a part of these new values

Marketers provide and adapt their product to attract different generations

Buyers are ready to pay more to buy a product that represents them

Every generation use Internet for shopping

Some trust issues for the Baby Boomers and Veterans, since they don't are

not used to the new technologies

Online shopping is involving to be more user-friendly

Changes of mentality – The “now effect”

“There is more to life than increasing its speed”. This quote from Mahatma Ghandi

has never seemed to be so true. It’s undeniable that the lifestyle’s speed is way faster than a

few decades ago, and this is especially due to the development of the technologies. Through

30

our smartphone, tablet or computer, we now have an instant access to the information because

of the Internet. Smartphones are now so important in our life that many people are suffering

of “"nomophobia", which is specific to the anxiety driven by the absence of your mobile

device.”60 Smartphones now allow people to be connected with the world around them all day

long, in addition to provide an infinite access to the Internet and its huge market. It has never

been as easy as today to shop, and this is why the shopping mentality has changed. Nowadays,

people are so used to have everything at the tip of their fingers that they suffer of what can be

called, the “now” effect. This factor is the “sickness” of wanting everything at the instant

moment, and it’s very present in the shopping process. Normally, when someone goes in a

physical shop, he can easily get out with the item the same day. People are now so busy, that

they don’t even take the time to go to the shops. Also, they are highly demanding in regard to

the customer service, where they want to have a reliable 24/7 assistance, no matter if it’s

before the sales or for after-sales support. Instead, they buy a lot of products on the Internet,

because even if often they are shipped from far abroad, customers can have them very fast.

The occidental man never wants to wait for something, nor to search a product for hours in

order to find the one that fits his needs. This could easily explain why today, two of the most

important things on online shopping are the delivery speed and the platforms. Having a

traditional online shop can be no longer sufficient to face the desires of the consumer, and it’s

why they need to turn themselves toward bigger players, such as Amazon, Alibaba or EBay to

generate more sales. In sum, the modern customer has a new mentality. He wants to be able

to shop from anywhere, to buy his articles at the moment he wants, and to have it delivered as

soon as possible at home.

How marketing has to change – The “now effect”

The new mentality of the “now” effect doesn’t go unnoticed by the marketers, who

need to change their strategies and their ways of working, if they want to be able to deliver to

the customers what they asked for. First things first, the consumer wants to be able to shop

easily at one place, for every products he needs, and be able to view all the options that are

offered to him. This being said, the market reacts to these needs, by providing the customers

of multiple worldwide platforms (Amazon, EBay, Alibaba, etc.) where it’s possible to buy 60 Villas-Boas, Antonio. “Researchers say your answer to these 20 questions will tell the true story of your smartphone addiction.” Business Insider UK. May 11th, 2015. [http://uk.businessinsider.com/how-dependent-are-you-on-your-smartphone-2015-5?r=US&IR=T]

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almost anything, from anywhere. In this list of the major players, Alibaba is definitely the

largest online retailers’ platform. In 2014, Alibaba had $240 billion in sales, which is more

than Amazon and EBay combine.61 This demonstrates the importance of these huge platforms

in today’s market. Secondly, the good usage of the Big Data will become a standard for both

retailers and webshops.

“Big data is being generated by everything around us at all times. Every digital process and

social media exchange produces it. Systems, sensors and mobile devices transmit it. Big

data is arriving from multiple sources at an alarming velocity, volume and variety. To

extract meaningful value from big data, you need optimal processing power, analytics

capabilities and skills.”

- IBM62

The use of the Big Data by companies, retailers, facilitators, industries and platforms helps

them in different ways. For instance, with a good usage of it, they can predict customers’

behaviour, and then, predict the future sales. That way, they can approximate the demand and

take care to never miss any selling opportunities. It also helps them to improve their services

and their production, in order to deliver the best products in the shortest time, while fulfilling

the desires of the customers. To do so, the key elements are the collaboration, the

connectivity, the control and the communication between every party. It is then easier for

them to develop a solid supply chain and a strong logistic. To achieve this, they need to

collaborate all together and use the expertise of each partner, such as the product excellence

of the factories, the operational excellence of the facilitators and the customer intimacy of the

companies, retailers and platforms. Companies and retailers need to collaborate with a logistic

service provider, such as FedEx, UPS, DHL, to offer the best service possible and have a

guarantee that their products are delivered fast. For these providers, the operational excellence

should be the focus point to answer the demands of the customers. The new technologies help

to connect every segments of the supply chain. For instance, factories can now have a

permanent access to the sellers’ stock, and then, take care of filling it. This allows to reduce

61 Popper, Ben. “Alibaba has more sales than Amazon and eBay combined, but will Americans trust it?” The Verge. May 7th, 2014. [http://www.theverge.com/2014/5/7/5690596/meet-alibaba-the-ecommerce-giant-with-more-sales-than-amazon-and-ebay] 62 “What is Big Data?” IBM. [http://www.ibm.com/big-data/us/en/]

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the number of intermediates in the supply chain, makes it less complex and more reliable. At

the end, the customers receive a better service, due to the reduction in the delay. Often,

retailers work with different suppliers to make sure that they are never out of stock, because if

this situation happens, then the customer will need to wait longer to receive the items he

ordered. Sellers know that in this case, the consumer won’t buy again on their webshops. One

of the direct consequences of the innovations surrounding the connectivity is a better

communication between all the different parties involve in the supply chain. In the past, it was

difficult to communicate with their partners when they were far away. Since the arrival of the

Internet, they are able to communicate much more easily than before, and problems can be

resolved quickly. Finally, a good control of all the supply chain and the logistic insures that

no problem will stay unsolved for too long, which can have consequences on the global

customer experience.

How generations react to all of these changes – The “now effect”

Each generation has its own opinion about the “now” effect, but almost everybody is

affected by the increasing rhythm of life, where the main elements are the performance and

the speed. People day-to-day life is always strictly scheduled and losing time seems to be the

worst thing, because they all know that the only thing that can’t buy is time. This mentality

has also an effect in the desires of the modern customer, who wants everything and at the

moment he wants it. Rieva Lesonsky said, “Timely delivery is a big factor in satisfaction for

more than one-third of ecommerce customers. Delivery speed is the fourth most important

factor in making the sale.”63 However, even if for some people the fast delivery time is a

major issue, half of the buyers prefer to wait a little bit longer in order to receive a free

shipping, and for 83 percent of them, they are ready to accept one or two days of waiting to

save on shipping fees.64 Furthermore, 85 out of a 100 consumers can afford to wait for five

days or more to get their purchase. On the other hand, almost half of the consumers have

abandoned an online shopping cart because the delivery time was too long or they couldn’t

have a clear idea of the estimated delivery time.65 A few years ago, Amazon came up with an

idea that completely changes the online market, which is Amazon Prime. With this 63 Lesonsky, Rieva. “Why Product Delivery Can Make or Break Your Ecommerce Sale.” Web.Com. September 15th, 2014. [https://forum.web.com/product-delivery-can-make-break-ecommerce-sale/] 64 Ibid. 65 Ibid.

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membership subscription, millions of items can now be delivered in two-days, as long as the

consumers subscribe to Amazon Prime. The most recent update stated that Amazon has

almost 40 million subscribers. In the United States, around 45% of the Amazon’s customers

have a subscription to Prime.66 The Amazon Prime had a major impact on the customers,

since now, they expect fast deliveries, low prices and a good customer service. The

importance of these aspects is different from a person to another. In the U.S., 19% of

Millennials use this Amazon Prime, compare to 16% for the Gen X, and 11% for the Baby

Boomers.67 These statistics show that younger people seems to grant more importance to the

time of delivery than the older ones. Also, with the emergence of platforms, the buyers now

have the ability to buy almost all the products they want on only one site. The time where we

had to search on different websites to buy a pink suit, or even a new pair of earphones is now

over. Each year, Amazon.com is selling for almost $89 billion, which makes it the most

popular online store in the U.S.68. Amazon’s biggest competitor is without a doubt Alibaba,

which has some impressive statistics and world records. As of the second quarter of 2015,

Alibaba Corporation reports that 367 million buyers had accessed one of their webshops in

the past twelve months.69 However, the most impressive one is definitely the one about the

24-hour sales hosted by Alibaba each year, on the November 11th. In 2014, Alibaba received a

record number of 278 million of orders, from which 42.6% have been generated on a mobile

device, for a total worth of $9.3 billion.70 These facts illustrate that the change in mentality

regarding the “now” effect is real, and that nowadays, almost everyone want to be able to

shop from anywhere, in addition to receive their purchase as soon as possible.

66 Weise, Elizabeth. “Amazon Prime is big, but how big?”. USATODAY. February 3rd, 2015. [http://www.usatoday.com/story/tech/2015/02/03/amazon-prime-10-years-old-anniversary/22755509/] 67 Smith, Craig. “By the Numbers: 80+ Amazing Amazon Statistics” DMR. August 10th, 2015. [http://expandedramblings.com/index.php/amazon-statistics/2/] 68 “Annual Financials for Amazon.com Inc.” Market Watch. 2014. [http://www.marketwatch.com/investing/stock/amzn/financials] 69 “Cumulative number of active buyers across Alibaba's online shopping properties from 2nd quarter 2012 to 2nd quarter 2015 (in millions).” Statista. 2015. [http://www.statista.com/statistics/226927/alibaba-cumulative-active-online-buyers-taobao-tmall/] 70 Shao, Heng. “$9.3 Billion Sales Recorded In Alibaba's 24-Hour Online Sale, Beating Target By 15%”. Forbes. November 11th, 2014. [http://www.forbes.com/sites/hengshao/2014/11/11/9-3-billion-sales-recorded-in-alibabas-24-hour-online-sale-beating-target-by-15/]

34

Summary table - Now effect

Change of mentality:

Increasing of lifestyle speed

Smartphones make people permanently connected People want everything at the instant moment (No more used to wait) Customers want a very fast and reliable customer service Delivery speed is very important for a majority of buyers Emergence of online shopping platforms (Amazon, Ebay, Alibaba)

How marketers react:

Platforms provide customers with a huge variety of products from all around the world on the same site Big Data helps to predict customer behaviour --> Future sales Big Data helps to improve every part of the supply chain Good use of partners expertise (Operational excellence, product excellence, customer intimacy) Key elements: Communication, Collaboration, Control and Connectivity Companies and retailers work with logistic service providers (FedEx, DHL, UPS) Innovations help to improve the communication in the supply chain

How generations react:

People's life are strictly schedule, there's no place for lost time Customers often prefer free shipping over fast delivery Amazon Prime innovation, two-days delivery Platforms are worldwide and gaining more importance each year

Conclusion

New webshops are established every single day, and majority of them are doomed to

failure, as there is no willingness to change old-fashion habits and mentalities. The world is

changing, customers are changing, competition between suppliers is bigger and bigger,

especially with platforms like Alibaba.com, that connect customers directly with producers, in

addition to allow them to save huge amounts of money, as labor costs in Asia are far cheaper

than in Europe or America. How can we answer to that? If we cannot compete with Alibaba

producers in price, we have to find our competitive advantage.

The Knowledge and the quantity of available information about products has increased

rapidly in the last few years. What is new with last generations is the zero moment of truth

(ZMOT), which comes before even buying a product, and helps the consumer to compare all

35

the shops and choose the best proposition in the market. Marketers nowadays have to predict

the behavior of customers and give them individual approach if they want their businesses to

grow.

New generations of customers have different values, they care more about the environment

and ecological issues around them, want good working conditions for people who are

manufacturing their products and also demand trustful relationships with Internet shops. In

terms of delivery, new generations are strongly influenced by the “now effect” and want to

get every product within a few hours. This is a great challenge for retailers as they have to

think about other ways of fast delivery (e.g.: drones) and predict what their customers are

about to buy in next few days.

With five different generations in the market, wide range of product knowledge and the

highest consumers expectations, it is tougher than ever to be sustainable and be the leader on

the market. If you can’t meet the customer´s needs, your competitors surely will.

36

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