Generation Alpha To Overtake Generation Z: Implications For Companies
The needs and preferences of the consumer have changed after the pandemic, and this has shifted buying towards more selective and mindful products and services. They have cut down to less expensive products and value for money remains the most important priority. Consumers switch brands as soon as they find better value elsewhere and do not hesitate to abandon brands that are neither good value for money nor aligned with their value system. The COVID-19 pandemic led to rising health issues mainly obesity, overweight and cardiac problems. Consumer preferences have shifted towards health and wellness and have started looking for brands to help them make healthier choices. The pandemic has further accelerated the shift to the home. Consumers started giving more time at home as a result, the home evolved to become the hub of everything, including working, shopping, exercising, and playing. They want convenient, time-saving, and space-saving smart technologies to make their homes smart and greener.
Gen Y (Millennials) and Generation Z have been the main target consumers receiving much attention from marketers and brands, due to their market size. However, the pandemic has put screens in front of the newest generation- Gen Alpha in their formative years for education, entertainment, and communication. Gen Alpha relies on digital platforms to interact with people and lean on digital games, and metaverse for meeting places. Their digital-first, tech-savvy and highly digital social upbringing will fiercely impact their shopping behaviours. They are growing up with smart technologies (artificial intelligence, machine learning, robotics, and biometrics), healthier living, and greener products, so this generation will likely prioritise buying products from high-quality, authentic, health-conscious, greener, and sustainable brands that have a positive impact on the world. Looking forward to their working lives, most of them will want to make a difference in the world by saving human lives and will use technology to make a difference.
For example, Brands have started using virtual entertainment playgrounds within the metaverse like Nike launched virtual Jordan sneakers in Fortnite, Mattel’s –‘Hello Barbie’, came up with sustainable packaging, and ‘KidKraft’ incorporates Amazon’s Alexa into interactive toy functionality. Procter & Gamble has launched a new electric toothbrush that includes a voice-controlled Alexa smart speaker built into the charger base to use songs, jokes, and trivia to get kids brushing for the right length of time. All the above brands are targeting Gene Alpha tech-savvy and environmentally conscious influencers.
Generation Alpha’s population will be more than 2 billion people around the world by the end of 2024. They are poised to have the greatest spending power in history, even more than millennials and baby boomers. These emerging young consumers have a huge influence on their family purchases and more than 50 per cent of the kids under 16 years have direct access to an amazon prime account and it’s their favourite place to spend smart money. The kids of today are the shoppers of tomorrow and that’s not so far off when Gen Alpha will all grow up, with jobs and families and disposable incomes of their own. They will come to the foray in the next few years and will be culture influencers and trendsetters. They will overtake Generation Z to become the largest generation by 2035. With that, Gen Alpha will be a significant market force shaping consumer buying trends.
Generations are classified with each span of 15 years and help in meaningful comparisons of consumer demographics, lifestyles, and buying behaviour. Baby Boomers were born from 1946 to 1964, Generation X from 1965 to 1980, Generation Y (Millennials) from 1981 to 1995, Generation Z from 1996 to 2010, and Generation Alpha from 2011 to 2025 and so it follows that Generation Beta will be born from 2026 to 2040.
Companies must pay close attention to Gen Alpha’s unique needs and characteristics, appealing to their connected world with personalised, tech-savvy, authentic experiences that integrate seamlessly into daily life. The new generation of Alpha customers might not be today’s target customers for marketers, but they act as today’s disruptors and influence their parents in purchasing decisions in most of the product and service categories. Those brands that will invest early in understanding and building loyalty with Gen Alpha will remain in power with this “wealthiest and educated generation” and will dictate marketing dynamics and economic growth over the next two decades.
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