Millennials and Generation Z account for a significant majority of users of subscription services. As their share of the public spend increases, how can businesses ensure their offerings meet the expectations of this diverse, difficult audience?
Though they may have a reputation as work-shy kids who can’t go more than a few seconds without staring at their social media accounts, Millennials and Generation Z are the two most important markets that a subscription business can target, as their more monied but less tech-savvy elders reduce their spending.
While they are two generations for whom home ownership may be a distant dream, their share of consumer spending is growing. Soon, Millennials will become the largest generation and the biggest spenders
, with Generation Z certain to exceed even them
in the coming years. Combined, Millennials and Generation Z represent some 60% of the total global population
, with the latter narrowly edging out the former, making up nearly a third of, well, everyone
With the eldest members of the Millennial cohort pushing 40, the oldest members of Generation Z are beginning to reach financial maturity (Pew Research Center places the cut-off at 1996
), despite its youngest members being barely in the double digits. “Generation Rent
” may be the best way to broadly categorise the two, according to Kim Bayley, CEO of the Entertainment Retailers Association.
Despite the two generations defying broad categorisation, they share enough similarities to be the drivers behind much of the growth of subscription services.
Growing up in a media-saturated digital landscape, Generation Rent is largely immune to persuasion by traditional marketing, placing more value in social proof
than in adverts – after all, their friends, peers and influencers are more trustworthy than faceless brands. This means that any marketing strategy must be more than a handful of banner ads and blanket email campaigns; a full-spectrum, cutting-edge, customer-engaged approach is necessary, not corny slogans co-opting the lingo.
These two cohorts are by and large typified by a desire to express their individuality through their purchasing habits; personalised, curated and packaged for sharing on their various social media channels
This isn’t to say that they’re shunning brands outright – Generation Rent are actually the most loyal generations
, but they use the brands they consume as an extension of their identity more than any other generation, with 91% of Millennials willing to switch brands to one associated with a cause
Both are largely aligned when it comes to socially conscious consumption, preferring sustainability
and convenience over traditional ownership, with most even willing to pay more
for their subscriptions to protect the planet.
This reflects a broader tendency for Generation Rent to prefer experiences over things
, and media is no different; rather than, say, owning a vast, cumbersome CD or vinyl collection, for a monthly fee they can immediately access any music they so choose. It’s for this reason that a whopping 72% of Spotify’s userbase are Millennials
This love of convenience manifests itself most clearly in on-demand streaming platforms – Millennials are more likely to subscribe to multiple services
than any other generation; with Amazon Prime, for example, users can combine the immediacy of its streaming service with the convenience of its next-day delivery feature – or should that be the convenience of streaming and the immediacy of next-day delivery? That’s why, according to YPulse’s Media Consumption survey, over half of 19-37-year-olds
are Prime subscribers.
That’s not to say that they aren’t choosy about purchases – with many Millennials maturing during the Great Recession of 2008, and Generation Z coming into maturity on the cusp of a potential COVID-induced downturn, their careers are the most precarious
. It’s little wonder then that password-sharing
for streaming platforms is rife among Generation Rent.
What Generation Rent seeks in their purchases makes them uniquely receptive to the benefits of subscription packages, and a priority segment for subscription businesses to target and retain as their share of the total consumer spend continues to rise. Successfully targeting this group means making your offering ethical, sustainable and convenient. A fully automated, personalised digital service is crucial, or you won’t gain their loyalty. And these digital natives may prove to be your greatest evangelists, provided you can get them on side.
Let Cerillion Skyline manage your recurring billing while you worry about how to sell to Generation Rent; get in touch to find out more or to book a demo.