Nielsen‘s Scott McKenzie describes some of the social and demographic changes unleashed by coronavirus, from mass unemployment to multi-generational homes – and what they could mean for brand marketers.
Prepare to face the looming reality of marketing to more multi-generational households. With youth (16-24-year-olds) unemployment running at rates of 20-30% in the US, and expectations that the jobless queues will ultimately grow longer across all age groups, there are a number of implications confronting marketers.
High school students are graduating into an economic recession expected to be larger and longer than most of us have ever witnessed, and there will be a near immediate impact. Instead of going to university or taking on a job, those young adults will be forced to live at home for longer than anticipated in a pre-Covid-19 world – much longer. As they struggle to find employment, with even part-time jobs in the now-declining hospitality industry scarce, their parents will share their financial burden. Cell phone bills, gas money, more groceries, spending money will all be added to the household budget for what is likely to be years.
Parallel to this, more elderly grandparents are now considering moving in with their children to avoid the risk of Covid-19 infection outbreaks in care homes, or to gain access to their families, who are barred from visiting due to health controls at such facilities.
That gets us to at least three generations living together. This is a trend that will have lasting effects on how those newly expanded households spend, consider product and brand choices, and also how they respond to brand messages.
For retailers and brands attempting to reach these new and pervasive multi-generational households, a change in tactics will be in order. Yes, marketers know how to approach multi-generational households at a niche level – some cultures are still maintain such practices – but this is a trend that is going mainstream. We saw it in Spain a decade ago as unemployment numbers spiraled out of control. Kids stayed at home for many years longer than either they, and likely their parents, would have liked.
So why is this such a big deal? Put simply, it adds social disorder to the economic disorder already unfolding. It looks like this:
- Ongoing education levels decline, which means that when the good times return, those who haven’t been able to afford further education may be forced into lower paying jobs.
- Retirement ages are pushed later (pension plans, 401ks are worth less in economic downtimes and household costs have gone up.)
- Marriages and children are delayed.
- Major purchases such as homes and cars are delayed.
- Many will be forced to move to cheaper locations offering more space to accommodate larger households.
As any or all of these pieces play out, brands will be forced to rethink their offerings and how they reach this ‘new‘ type of household. There will be previously unknown gatekeepers and decisions makers across each of the generations in these larger households. Product and brand choices will come about as they individually advocate for ‘their‘ share of the household spend. The favorite breakfast cereal of a millennial may be very different to the breakfast choice of a baby boomer.
As we think about the consumer packaged goods space, consumers in these newly expanded households will be thinking critically about the health attributes of their purchases. With the elderly in the home more prone to Covid-19, all generations will be looking to do their part to create a healthy home. Are there cleaning products that guarantee germ killing? Are their foods that can help boost immunity levels across the household? Understanding these dynamics at an individual and household level will be critical.
There are also categories that may be left by the wayside in the household negotiation for share of wallet. Rather than see categories abandoned, it will be better for brands to find ways to keep these households in the category by offering more choice in areas like packing sizes or nutritional benefits.
For example, in a Nielsen BASES study, we found a clear shift in desire for food products that provided health benefits as the impact of Covid-19 began to be felt. Between March and May, the data demonstrated a clear shift in thinking. In March, when asked what attribute they would be willing to pay more for, the top answer was that it be made by a company they trusted. But by the end of May, that response had pivoted to be that the product needed to be “nutritious”.
This is an easy example of how to look for common ground among members of these multi-generational households. You can please some of the people some of the time, but there will be pressure to please more, or most, of the people all of the time.
Scott McKenzie is the global head of the Nielsen Intelligence Unit.
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