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The Disruptive Impact Of Gen Z: What You Must Know Now To Profit with Kathleen Hessert and Rani Mani
My guest is Kathleen Hessert, who is the CEO of Sports Media Challenge, a reputation management in social media and We R Gen Z, a Gen Z consulting firm to demystify that generation and how brands can meaningfully engage with youth between 10 and 22 years old. This is becoming increasingly important because if you haven’t figured out Millennials, you’re probably not going to make it in business and if you don’t figure out Gen Z, you will not make it in business. Welcome, Kathleen.
Thank you, Mark. It’s a pleasure to be here with you.
Why is Gen Z so important to businesses?
If you just start with their sheer numbers, they’re critical to the present and the future. In fact, there will be 2.56 billion Gen Z-ers by 2020, which means in the US alone, 40% of the population will be part of Gen Z. I think 37% globally will be Gen Z kids as many of us still call them. Look at their numbers. Their numbers alone are remarkable. Where they go, we go. That’s the bottom line. Their spending power is enormous. A lot of people think of Gen Z, “They’re just kids. They don’t have money to spend. We don’t sell to them,” but they are your current and future employees. They are leading the world in so many issues in so many ways, whether it’s environmentalist, whether it’s gun control, whatever you want to ask. They clearly spent $44 billion a year in the United States and they influence 600 billion.
You might say, “How could that possibly be?” The reality is when I grew up, if our parents said, “Do this. Don’t do that. This is what we’re going to eat.” That was it. That was the Bible. Now, they influence $600 billion a year, and the reality is that when I was growing up, my parents controlled everything in the household. As much as we hate the idea of it, kids influence so much of the major decisions. You’re not going to buy a piece of technology unless you get the kids’ input because they’re the ones who know how to use it. You’re not going to buy a car if it doesn’t fit all the kids and where you have to take them with all their gear. You don’t even buy food in the house if the kids are going to waste it.
That’s such an important point because one of my friends has been highly influenced by his Gen Z daughter who has chosen to become a vegan and it’s had a massive impact on what they purchased and what they consume and what restaurants they can go to. I’ve understood that Nestlé, because of this impact of Gen Z, has decided to source all of their eggs from free-range hens.
The Gen Z are very socially-minded. We don’t have a green party in the US, but basically, there’s a lot of interest in environmentalism and the environment in general in the US by young people. If your kid wants to recycle, you’re going to recycle because they’re going to bug you until you do. My daughter works in Africa with education reform in Tanzania. I doubt I ever would have been interested in Africa for anything else than Safari if it wasn’t for our daughter but we spend so much time and energy focused on that part of the world because she took us there.
The interesting thing about Gen Z is most of them grew up playing Minecraft. Fortnite now is also being named as one of the leading causes of divorce. The interesting thing about Minecraft is that children learn how to build worlds. They build empires, create products, exchange information with other people that don’t speak the same language because they’re communicating through memes and they learn how to do commerce. All of this before they know how to spell their name.
Think of Gen Z as a boundary list generation. What used to be a small backyard, confining our thinking, our actions, our play and our whole world is now a globe. They thrive on global connections and they see that as their world, which is very different than the world that many of the older generations, including Millennials, grew up in. In fact, this is the first generation that didn’t know a world without the internet.
They were raised with devices in hand. They are digital natives and they know how the stuff works almost intuitively and instinctively. Without a doubt, their brain operates in a different fashion.
The way they see it, it’s amazing. Sony and Electronic Arts are doing research on Gen Z. We learned to read from left to right so our eyes track that way whereas Gen Z, because of the smartphone, they read from top to bottom. Their eyes tracked differently. What that tells a marketer is if you’re going to market to that generation, which is soon going to be the predominant generation, if not already. You better make sure that what you want them to see is vertical and in the middle, and that the periphery is nothing more than the periphery so you’re not going to put important information on the left or the right. It’s got to be down the center.
That tells me I’ve got to reengineer all of my books for Gen Z reading. We can’t have large dense blocks of text. They won’t read it.
Look at the New York Times. The New York Times has a whole section that is focused on recreating the times in paper form like the internet in short chunks to capture people’s attention.
We just had a special guest join us, Rani Mani from Adobe. Welcome.
Mark, how are you?
We’ve got Kathleen here as well. I’m glad you could join us.
Thank you for having me.
We’ve been rolling and laid the base of why Gen Z is so important. Where we want to go now is using you on what a major corporation is doing from Gen Z. Kathleen, would you introduce Rani and start the conversation with what Adobe is doing to incorporate Gen Z into their current and future plans?
Rani is a dear friend and we started because she is the Head of Influencer Marketing for Adobe and employee advocacy. She’s an early adopter like we are. She recognizes the value of Gen Z when we introduced it to her and to Adobe and she became the internal champion. I’ll let her go from there so that you can hear directly from her. All I can tell you is that nobody could want a better champion than Rani. It’s not because she loves what we do, it’s because she recognized before many others the importance of this generation to Adobe into the marketplace.
Thank you for that, Kathleen. I’ve got several Gen Z-ers in my household and beyond that, just recognizing that for Adobe, this is our future. Gen Z represents our future customers, our future employees, our future partners and so it’s just a good business to woo this cohort of people to really understand what’s important to them. What makes their heart sing? Where are they placing their bets? Honestly, it’s not for an altruistic reason, but really because it’s smart business to befriend and ultimately woo this cohort of this generation.
We often talk about three horizons when we do the planning and strategic plans. We have horizon one, which is short-term zero to six months. Typically, we considered that to be a market chaser and then horizon two is six to eighteen months. We consider that to be a need seeker, we’re looking for the needs that people have, seeking those out. Horizon three is 18 months to 36 months. That’s where we do tech innovation and rarely do we talk about beyond three years. I consider beyond three years to be the age for the fourth horizon and that’s where we start to see a generational impact. Gen Z is the generation that we have to be paying attention to and there will be a follow-on generation. The situation is that these generational influences frequently sneak up on people because they don’t show up in market studies and market surveys studies. Rani, tell me what Adobe is doing to make sure that you’re including this fourth horizon in your strategic planning approach.
We’re working so closely with Kathleen to understand what this generation is about. We’re just in the discovery and investigative mode in terms of just feeling it out, knowing and believing their purchasing power and their sense of influence. We’re on the listening door if you will, and everything that we’ve heard absolutely is resonating in terms of how we should incorporate their needs and their feedback into our product roadmap as well as our positioning as a company. I would say we’re really at the early stages, but yet I do believe we’re pioneers and trailblazers in this space because so few brands understand this generation, let alone have we managed to integrate them into our strategic plans. I’m not at all going to mislead you to believe that we’ve got it figured out, but we at least know enough to know that we need to pay attention.
What you figured out is simply that you’re listening to the voice of the next customer. A lot of people pay attention to the customer, but not many pay attention to the next customer. Keep in mind that the role of an executive is simply this, to guide the organization to where the customer money will be in the future.
Let me just share with you how they have begun to listen to Gen Z. At the Adobe Marketing Summit, 13,000 people from around the world, marketers come and convergent in Las Vegas and talk about marketing where it is and where it’s going. They first asked me to come and be an influencer and cover the summit. I said, “Why don’t we send Gen Z and have Gen Z report on the summit through their eyes?” It will be a very different perspective. We sent four kids and they gave them front row seats to everything. The access was remarkable and these kids were superstars. Other brands were coming up to us saying, “How can we get your kids to do what Adobe is having them do now?” From there, the next huge creative summit that they have is Adobe MAX in Los Angeles and we brought seven kids to not just cover it, but again, to immerse in it. Some of our kids take over official accounts on social media and post from there. They let them sit in and ask questions a half an hour with Ann Lewnes, the CMO of Adobe. Our kids actually spent half an hour asking her anything and everything and she asked questions in return.
We had one young woman, a seventeen-year-old who interviewed the lead actress in the movie, Eighth Grade. They gave them mentoring sessions in the areas of their interest at half hour at a time, one-on-one. It was amazing the opportunities they gave these kids and in return, these kids talked about Adobe on social media and beyond in videos and posts and so on. From there, they then had their global marketing leadership conference and they brought 90 people in at the director and vice president level from around the world in marketing for Adobe to listen to a panel that I lead with three of our kids talking about and helping them understand Gen Z in a much deeper way. For instance, a sixteen-year-old boy, Noah, who’s on our team, Think Tank, and our What’s Hot, What’s Not trends panel said, “You want us to be loyal. We’re not going to be loyal to you or to any brand that markets to us and says, ‘We need you.’” He said, “We don’t need you. You need us more than we need you and if you help us believe and trust that you want us, then you have a chance at getting our loyalty.” Every brand marketer knows that if you build loyalty early, the lifetime value of that Gen Z customer is huge.
I’ve raised five Millennial children and I raised them to be skeptical. I raised them to question authority and of course, I raised spoiled kids because we didn’t say no very often. Gen Z is an even higher reflection of that. They are not afraid to push back. They’re not afraid to question and it’s a beautiful thing.
They ask the word why, it’s not to be disrespectful but because they, for their entire life, has had the world at their fingertips through the internet and their smartphones and so they get context for anything and everything. When they ask why, it’s because they want to know more. They want to know the context. They’re constantly asking why.
It was so enlightening for us to understand why that’s important to them and how to actually satisfy those questions. Mark, I was going to just intervene earlier and say I don’t even consider this a generation of consumers the next customer, given how much revenue they’re influencing on an annual basis. Not only are they consuming $44 billion a year yet they’re influencing another $64 billion. To me they are also the consumer. They are now our consumer. It behooves us to understand what makes them tick and what’s going to endear us to them and what’s going to make them buy and insist their parents, parental figures in their lives buy. I wouldn’t even label them as the next customer. They have arrived. They are here.
They are an important component of a successful, scalable business. Rani, you are Adobe Head of Influencer Marketing and on a prior show, I had Jessy Grossman who represents influencers and influencer marketing. She went from representing actors for advertising to influencers. She completely tore down her company and restarted by looking for people using online influence to support brand messaging. How does that type of activity plug into what Adobe is doing with the Gen Z?
We want Gen Z influencers. They are the epitome of what we mean by influence in the sense that they are swaying decision makers. As we endear ourselves to them and make ourselves valuable and they feel like there’s a cultural fit that we represent something that they value and they can actually amplify and promote who we are. I can’t think of a better poster child, if you will, of what we really mean by influential, people that we’re partnering with. They’re addressing a marketplace in an audience, frankly, that we don’t currently have. That’s what we’ve started and this is where we hope to go long-term because we want this demographic to make up more of our customer base.
I am an Adobe Cloud subscriber. I have been for way longer than I want to admit to, given the fact we’re talking about young people. The reality is that what you do is you create a suite of tools that allows creative people to do extraordinary things. I believe that a lot of the Gen Z are preserving their creativity. In my cohort, if you ask everybody in kindergarten if they’re an artist, every hand goes up. Three grades later, four grades later, only a couple of hands go up. That’s changing with Gen Z, they’re preserving their creativity because they have in their hands all the digital tools they need to become extraordinarily creative.
40% of Gen Z says working Wi-Fi is more important than working bathrooms. They check their social media 100 times a day and usually are on as many as five screens. Think about this. All of this is changing the way we consume information, the way we distribute information, the rules that define their lives are the rules that are defining us in this world. Their attention span is only eight seconds long. That’s one second less than a goldfish. Think about that. A lot of people say, “How horrible,” but the reality is they’ve been multitasking all through life. They can do so much more within eight seconds than we ever thought of doing. I remember when I started and I had a whole office full of young people and they had earphones in and I’m thinking, “Don’t they want to talk with the rest of us? They can’t collaborate if they’ve got that headset on, how can they focus on what they’re doing?” The reality is they’ve learned to focus in different environments in different ways than we have. They consume information in a very different way and they consume that much more within a timeframe than we ever imagined was possible.
A way to explain it is that Gen Z is really good at parallel processing, multiple things simultaneously. It’s not multitasking the way that a lot of people think about multitasking, which is essentially task switching. They can actually perform multiple tasks simultaneously and this reminds me back in the days when I started off in the world of radio. I’ll figure out how to talk and operate the radio board and trigger all the audio and all that thing simultaneously. That was without a doubt a task that I had to learn how to do simultaneously and my brain figured it out. These folks are inherent at that kind of situation and it really changes how much complexity they can handle. The ability to handle complexity is an indicator of cognitive capacity associated with IQ. These folks who are way smarter than the average bear.
They’re much more aware from early on because of their access to the internet. This panel of Gen Z kids was speaking to the Adobe marketing group and we were talking about loyalty and how they get the loyalty. They’re inherently interested in social justice and causes. They want a better world to live in. Remember, these kids were born after 9/11 and into a recession. There wasn’t this lovely environment that everything was positive. In fact, they grew up in environments that were challenged, much more challenged than the generation before them. They don’t want to have to go home and live with their parents or go into dead-end jobs. They’re much more frugal and realistic about what it’s like. They expect that they are going to create a different world than they were born into and they expect the rest of us to come along with them.
I love the fact that they’re not waiting for someone else to do it for them. They expect others to come along, but they expect themselves to drive that change and that’s really liberating and it’s a fantastic thing to witness. There’s no lack of effort and willpower and just this everything is figureoutable type of attitude.
Share with me some of the insights that you’ve learned that you want to share with our executives as a brand, Rani, that you might be able to pass on to give people perhaps a bit of your wisdom that you’ve gained through the work you’ve done with Kathleen and her team.
I think we’ve covered so much of it here in terms of the fact that Gen Z is wanting to belong to something that’s far bigger than themselves. They want to make sure brands and corporations are invested in that social impact and social good and they want to co-create with us. They’re not sitting back and waiting for others to spoon feed them answers. They’re on the front lines rolling up their sleeves and willing and ready to fight the battle. The fact that they know what they’re worth, they’re not intimidated nor are they awe-struck by big brands. There is certainly humility and there is certainly a sense of wonder. I certainly saw when the students were on our campus and at our summit. They were very appreciative of the amazing solutions and things that we put out in the world, but they also have a very, “Take it or leave it,” attitude.
They know if we’re not providing what they need, they will simply move on to the next thing and I think that was very humbling. Iconic brands like Adobe, there’s a tendency to think we’ve arrived and that no one can touch us. I would say let’s not get too hung up on who we are and who we think we are and what we think we bring to the world. Let’s make sure we know that we need to constantly innovate and provide value and the minute our consumer base and Gen Z, they’re going to make up 40% of the population. The US population in 2020, it’s going to be consisting of Gen Z. The minute they think that we’re not providing value, they’re going to move on. That’s what I would say. Let’s get over ourselves.
Rani, don’t you think that the depth of their thinking surprises many people in leadership roles?
It’s so thoughtful and it’s so well-plotted and researched. It’s not this top of mind just spit balling stuff. When I think to the various comments I’ve heard through our interactions, it’s very well thought out and it’s up close and personal. It’s very much their story and the story of their friends, which makes it so relevant and so authentic. They’re not reading off of research reports and studies. They’re talking from lived experiences.
Because of their deep networks, they know a lot and they know how to find answers. They ask questions and they get answers.
They’re individualistic in many ways but they act collectively. They will do what they want to do and what they think but once they’ve come on board and think, “This is the way to go.” They’re not shy about bringing their friends along. For instance, I was really interested when the Nike Just Do It campaign came out with Colin Kaepernick that, “Stand up for what you believe in no matter what it costs,” kind of thing. Nike took a big risk because they would definitely alienate a lot of the older customers that they had and advocates that they had by using Colin Kaepernick. For those of your listeners who aren’t in the US or might not follow US football, he was the one who started the kneel during the national anthem and the flag. It caused a great controversy, but one of our panelists told the Adobe Marketing Group. He said, “I love Adidas and I love Nike. I love them both, but when that Just Do It ad came out with Colin Kaepernick, I put away all my Adidas things for two weeks and wore nothing but Nike. I like Adidas better in terms of clothes but because of what they stood for, I had to stand with them.”
They’re very connected to their community. That was a conversation theme that’s run through our entire conversation. It’s all about the community for Gen Z and the fact that they work in concert, they care about the community and they’re willing to do things to support the community.
In my generation, and probably you are too, our community was people like ourselves. For Gen Z, their community is not people like themselves. In fact, they are very inclusive of people who are not like them and they expect brands to do the same thing.
I have great hope for the future. I think we are raising children that are going to make a positive impact on the world with a community focus. It means that they won’t be as narcissistic as some of our other generations and they’re going to be much more focused on creating an environment and a world that all of us can live in a better place. We’ve got to pay attention to that. Last words, Rani?
I am humbled and honored to be working with such a vivacious group of people. They’ve really opened up my eyes and they certainly are making the right people at Adobe sit up and really pay attention. For that, Kathleen and I think the students that we have had an opportunity to interact with and we’re looking forward to a very long and prosperous relationship with this generation of students.
Kathleen, how can our audience get ahold of you and what would you like for them to do?
First of all, I’d like them to understand that we’re not experts reading about other experts talking about their studies, but we are research-based. We do eight original surveys a year with a thousand or more teams. We go right to the source and we let them tell the world what’s important to them and I think that’s very important. Go to WeRGenZ.com. Go and follow us on social media. For anybody who is really interested, it’s not going to be easy to sway your company to move more towards Gen Z and to put resources to it, but we have a Gen Z Fast Facts sheet that we’re happy to share with anybody. You can download it from our website or you go to AskUs@WeRGenZ.com and we’ll be happy to give it to you.
You’re going to have to go grab that, download it, read it and study it. Thank you so much, Kathleen and Rani, for joining us on the show because without understanding Gen Z, you will be disrupted.
Thank you so much.
- Sports Media Challenge
- Rani Mani
- Jessy Grossman – previous episode
- We R Gen Z on social media
- Gen Z Fast Facts
About Kathleen HessertKathleen Hessert is CEO of Sports Media Challenge, a reputation management, social media & WeRGenZ a GenZ consulting firm to demystifying the generation and how brands can meaningfully engage with youth between 10-22yrs old.
In 2006, Hessert expanded beyond communication, branding and crisis management for C-Level executives in major corporations, government and sports to include social media strategy and education services.
Hessert has counseled renowned clients in financial, manufacturing, media and education as well as some of the world’s best in Olympic, Professional and College sports. Clients have included NFL MVP Peyton Manning, Derek Jeter, Danica Patrick, Christian Laettner, Universities of Notre Dame, Texas, Michigan, Auburn, Penn State, ESPN, the Big Ten Network, The Rockettes and music magnate P. Diddy.
As a social media early adopter, Hessert’s vision led to international acclaim with the launch of NBA superstar Shaquille O’Neal on Twitter.
In 2010, Hessert recognized a more fundamental need for social media expertise in Humanitarian Assistance and Disaster Relief. She became lead social strategist for Exercise24, an international disaster preparedness exercise for 79 nations.
Hessert developed DASSL: Disaster Alerting through Sports-based Social Linking and was Communication Chair for Operation Dragon Fire a national working group on use of technology & social media in disasters.
In 2015 Hessert led the strategy and activation of the @PopeIsHope social media initiative around Pope Francis’ historic visit to the United States.
In 2016, Hessert launched a think-tank of 1k plus youth to provide Generation Z insights and original research for brands on how to leverage tweens and teens who account for $44 billion annual spending.
About Rani ManiI am deeply passionate about making customers successful and harnessing the power of customer feedback to improve the overall customer experience. I like to do this at scale over social media and am constantly looking at new and interesting ways to pinpoint areas where companies are making it especially difficult to do business with them. From there, I am skilled at working with cross-functional teams across the company to figure out ways of reducing the customer effort.
In addition to being keenly interested in reducing customer effort, I am equally schooled in strategies for providing exemplary support over social channels and cultivating and nurturing community engagement so that the company can be a community driven business. Following are some articles that provide my thoughts on the topic:
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