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Digital Natives Emerge as a Major Consumption Power

Digital Natives Emerge as a Major Consumption Power

LEE Seung-Hyeon

Sept. 19, 2008

Transcript

Welcome to our Video Program. I’m Seung-Hyeon Lee from the Marketing Strategy Department.

The world is now witnessing the emergence of teenagers that share similar consumption patterns across national boundaries. Key factors behind this phenomenon include the ever-growing prevalence of the Internet, the globalization of mass media, the expansion of global brands like Coca Cola and McDonald’s, and the emergence of multinational retail giants like Walmart.

SERI has dubbed this generation the “Global Digital Native Generation.” This generation has been familiar with digital devices and the Internet practically from birth. Compared with previous generations, Digital-Natives are characterized by youth and their uniform trends in consumption.

The purchasing power of this generation has been on an upward trend since 2002, reaching over $1.9 trillion in 2005. Their purchasing power is likely to continue to grow, given that the world is now entering an era of low fertility, which will increase their share in household consumption. Today we’ll take a close look at the key consumption features of this generation.

SERI selected a total of 88 hit products for the “Global Digital Native Generation,” based on hit products chosen by a group of domestic and foreign institutions between 2007 and 2008. SERI determined the consumption patterns of this generation by analyzing success factors for hit products.

First, the Digital Native Generation tends to prefer indirect and anonymous relations. In other words, they prefer sharing ideas and emotions without meeting face to face. Although teenagers are not as skilled at making new relations through direct meetings, they have great curiosity about others. They also reject the convention that relationships mostly depend on factors like social position, age, or educational background.

Instead of showing themselves up, they attempt to share their emotions with others and to solve their problems through anonymous contact, while enhancing their psychological satisfaction by packaging themselves well and making themselves look better to others. The growing popularity of online games, blogs and social networks like “Facebook” reflects the trend towards forming relations anonymously.

Second, this generation is infatuated with iconic products like the iPod as a way to show off its specific culture and life style. The Digital Native Generation see themselves in a product’s image and determine their social status through ownership of iconic products. Such products accordingly enjoy huge popularity among this generation. Among US high school students, the share of those who own Apple’s iPod shot up to 82% in 2007 from 16% in 2004.

Third, unlike older generations who rely on social status or wealth as a way to distinguish themselves from others, this new generation uses fashionable items as a tool to differentiate themselves. In particular, with fashion trends the Digital Native Generation is increasingly exhibiting ‘fashion nomad’ consumption, a trend towards showing off by endlessly seeking and consuming the latest products in fashion. Under these circumstances, apparel makers like H&M and Uniqlo who keep pace with changing fashion trends, are enjoying rising popularity.

Fourth, the Digital Native Generation has a marked preference for content that departs from long-standing customs. Some popular content for this generation includes music, films and animation which skewer social contradictions. The Simpsons is one good example of this trend. As a cartoon which shows off the contradictions of modern life, “The Simpsons” is the most favored TV program by the Digital Native Generation, according to the 2007 survey by Habbo.

Let’s take a look at how to gain the attention of the Global Digital Native Generation. First, companies need to keep in mind that this generation is not a group with fixed tendencies but a moving target. Accordingly, they must continue to monitor and understand changes in this generation’s favorite designs and functions as well as their life style and personality. Second, given this generation’s heightened sensitivity to the emotional value of products, companies need to place focus on product planning and advertising that appeals to teenager’s feelings. Instead of trying to make teenagers understand product functions and features, companies need to shed light on a single attractive point.

Third, to acquire the attention of the Digital Native Generation, it will be necessary to use “global fun codes,” common styles of communication for the Digital Native Generation. To this end, companies should have a better understanding of the “fun code” of the Internet, which is now serving not only as a playground for the Digital Native Generation but also as a global medium that unites this generation into one.

Finally, it’s also necessary to provide the Digital Native Generation with opportunities to attain new experiences, because they regard “getting used to new products and functions” not as stressful but as a enjoyment. Companies can double their PR effects if they create “experience stores” and stimulate the senses of this generation through novel use of colors, sounds, and space.

Thank you for watching. I’m Seung-Hyeon Lee.

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