Brand communities and Generation Y, Millennials and Generation Z

Brand communities for Generation Y, Millennials and Generation Z are an increasing consideration for marketers seeking to engage with audiences starting to earn and have disposable wealth. However for many brands building successful brand communities is still unchartered territory…

What are brand communities?

“A group needs only two things to be a tribe: a shared interest and a way to communicate.” So wrote author, entrepreneur and speaker Seth Godin more than a decade ago.

And so he set out a template for converting our ancient need to belong into a very modern take on tribes, just as applicable for brand communities of loyal customers and long-term advocates.

“A successful brand community acts as real-life communities do; members can learn and speak to each other, discover new things about the brand, and you can enhance trust and increase retention by having a part in this conversation.”

While Godin’s formula may sound simple, not every consumer is the round peg that will fit neatly into the round holes of your brand community.

However, although sweeping generalisations are always risky, there are a few things we can fairly safely say about Generation Y and Generation Z, those of us born in the years 1980 to 1995 (Gen Y or millennials) or 1996-2010 (Gen Z).

Brand communities and Generation Y, Millennials and Generation Z: the consumer perspective

Firstly, we need to have some kind of definition of these generations and ultimately, there are a lot of them, making them hugely significant as consumers.

According to Bloomberg, 2019 was the year in which Gen Z made up the largest share of the world’s population, accounting for 32 per cent of the total and just nudging ahead of Gen Y on 31.5 per cent, giving both groups huge spending power, by sheer numbers alone.

Although older members were late to the internet party that began in earnest 30 years ago, as a whole Gen Y is at ease in a digital world. As adults when the global financial crisis struck in 2007, older millennials may face financial challenges including paying off student loans or buying a home. Perhaps as a consequence of the crash, they tend to be sceptical about business: the Deloitte Global Millennial Survey 2019 found that just 55 per cent of millennials believed business had a positive impact on society, six per cent down on 2018.

Meanwhile, Generation Z members are digital natives, who have never known life without the internet and social media. Along with more options for the way they buy and pay than ever before, they’re used to being bombarded with digital marketing messaging and filtering out what isn’t of interest. And despite their youth, they have an important say in buying decisions. As an IBM report revealed:

‘Over 70% of surveyed Gen Zers said they influence family decisions on buying furniture, household goods, and food and beverages. Gen Zers’ impact is only going to increase as they mature and become mainstream consumers.

Going shopping: the habits of Gen Y and Gen Z

If we’re going to assess the validity of brand communities and Generation Y, Millennials and Generation Z, firstly, we need to understand how they shop?

Leaving aside the question of how much they have to spend, their natural affinity with technology means that they have instant access to information, comparisons and prices for the products and services they are interested in, making them super canny consumers, who can also pack a powerful punch as social media influencers.

They’re also not afraid to put their money where their values are: the Deloitte Global Millennial Survey 2019, which questioned more than 16,000 millennials and Gen Z-ers, reported:

‘Many say they will not hesitate to lessen or end a consumer relationship when they disagree with a company’s business practices, values or political leanings.’

It’s also significant that the age range of Generations Y and Z is a wide one, with the earliest Gen Y-ers 30 years older than the youngest Gen Z-ers. Within Gen Y, life stages vary widely, from younger members establishing themselves in careers and who may be still living at home to older millennials buying a first property and having children of their own – all factors influencing their ability to purchase and the products and services that interest them.

Older members of Gen Z have their own money to spend and their business heads firmly screwed on, as generational expert and author David Stillman told a Sunday Times conference in 2019.

“Side hustle and entrepreneurship is in their DNA. We have the makings of the most entrepreneurial generation the world has ever seen.”

Younger Gen Z-ers also have a huge pull on the family purse strings, as we have seen from the IBM report: a whacking 77 per cent influence family spending on food and drink, 66 per cent influence travel spending and 61 per cent spending on electronic goods.

What does this mean for brands and millennial marketing?

The picture that emerges is of well-informed, well-connected millennials and Gen Z-ers: no pushovers when it comes to making spending decisions nor afraid to vote with their feet or fingers.

An IBM study involving 15,000 13 to 21-year-olds found that more than half (52 per cent) would swap from a brand if they weren’t happy with its quality while product quality and availability were the most important factors when choosing a brand for 66 per cent. It also found:

‘Generation Z consumers like to engage with brands online, especially with those that create an interactive environment where customers can shape their own experience.’

These generations are also aware that the apparently rock-solid financial and economic infrastructure of the past has inherent vulnerabilities and this may be filtering through to create a view of life in which buying and owning items is less important, as an 2018 Ipsos report into Gen Z found:

‘Less than a third (30%) of younger Generation Z feel the things they own say a lot about how well they are doing in life, compared with 42% in 2011. Less than half (46%) feel that buying things gives them a lot of pleasure (compared with 53% in 2011).’

And millennials may also be becoming less materialistic. The Deloitte Global Millennial Survey 2019 found travel and seeing the world was the most common aspiration (57 per cent), against 49 per cent who said they wanted to own a home. And a Harris Poll for Eventbrite suggests that not only are millennials more interested in experiences and events over buying something, more than two-thirds suffer FOMO: “In a world where life experiences are broadcasted across social media, the fear of missing out drives millennials to show up, share and engage.”

“Experiences are where both Millennials and Gen Z are going. They don’t want to just come in and drink the beer, they want an experience.”- Neil Simpson, Brewdog

Take all this on board and marketing themes of authenticity, added value and interactivity come together, making brand communities a logical step for businesses marketing to millennials and Gen Z.

What do Generation Y, Millennials and Generation Z gain from brand communities?

Our report Benefits of Brand Communities shows that in the luxury sector, 57 per cent of 25 to 34-year-olds say it’s important to be part of a brand community. In the automotive sector, more than half (55 per cent) of 25 to 34-year-olds say it’s important. And in the travel sector, it’s important to 49 per cent of 16 to 24-year-olds and 56 per cent of 25 to 34-year-olds.

The Benefits of Brand Communities: a Dialogue report

So we know that Gens Y and Z value brand communities in which they engage with like-minded individuals, although they also enjoy more tangible benefits, including:

• discounts and offers
• invitations to exclusive events
• access to exclusive online content
• exclusive branded products.

But it’s crucial that such communities are a two-way street: it’s only by continuous engagement that brands can build the relationships that create long-term influencers and loyal brand advocates (our research found that half of 16 to 34-year-olds are more likely to stick with a brand that switch to a rival).

One option that ticks many boxes is via a dedicated community app; an app separate to Facebook or Instagram channels which is dedicated wholly to that passionate group of brand advocates. Dialogue partner Disciple Media has created such community apps for the likes of The Rolling Stones, politician Matt Hancock, Norwich City FC’s fan base The Pink ‘Un and others. When we spoke to Disciple Media founder Benji Vaughn for our content marketing podcast series, he told us:

"Think about creating a narrative and a conversation that the community can latch onto. Think about your brand community that you build as almost part of your team. Don’t treat them like your audience that you would market to; try and think of them as part of your business, making them really bring value to you."

Brand communities, whatever channel they’re using – and we offer apps, events, magazines, social media, video, websites – tick many Gen Y and Gen Z boxes when it comes to millennial marketing.

The direct approach delivers the authenticity they like; exclusive content and offers feed into the interactive, experience-based lifestyle that’s important to them; reaching out for their opinions show that a brand values them, increasing their enthusiasm for acting as influences – all within the context of a millennial community.

Building brand communities for Gen Y and Gen Z may not be quite as easy as A, B, C – but the good news is that the door is open, and they’re just waiting for you to step inside.