Digital Dopamine for Digital Natives

Feb 19, 2016

Let’s face it, we are addicted to being online. We may as well be high on it. Our smartphones, now our wearable devices. For legacy folk, waking up and checking Email. For us at a startup, checking Trello and Slack. More channels, more digital touchpoints, changing how we relate to brands, retail stores and so forth.

The #marketingtrends I’m watching in 2016 revolve around our digital consumption and how this impacts branding for Millennials, in Omnchannel and towards a new kind of brand loyalty.

I am currently consuming 2o white papers a day on this, so forgive me if I’m about to ramble a bit, I mean well.

EXECUTIVE SUMMARY

With augmented reality, more pervasive wearable technology, the age of notifications is upon us. This is even before the Internet of Things really takes off and before analytics is embedded into everything. Fitbit anyone?

It’s only going to get worse!

Dopamine is the short-term high that is engages behaviour in humans. As technology “gamifies” we are living more on social media, growing up with texting, and learning about brands searching on mobile devices on the go.

The new digital reality is not just changing how we consume content online, but how we create it. DIY video channels is on the rise, and so is video on demand. Consumers on mobile devices will often be more engaged by a video than by an article. Offline journalism has died clogging our social media, I get my News from Facebook and Twitter. ugh!

I learn about you on Instagram, ouch! But it’s not just mere irrelevance, it’s digital evolution in real-time, it’s consumer driven changes in how companies are branding. Entire companies are dying and rising every day because of this stuff!

This doesn’t just relate to marketing, it relates to how brand affiliation works in the digital era. The world wide web is a global movement, with new populations getting “online” and “addicted” for the first time.

The Facebook high we had a decade ago, now a new generation somewhere out there is having. While our youth have moved on to Snapchat, Instagram and the next great thing, social media giants like Twitter and LinkedIn are showing signs of being behind in the game. Let’s take a closer look.

The New Breed of Information

In the new attention economy, the generation gap isn’t 15 years, it’s 7. The speed of digital change will mean while one generation grows up with augmented reality, another will grow up with intelligence Siri 2.0s that we cannot even yet imagine.

Exponential change doesn’t hit a running pace unit about 2025, but business, corporations, retail and even how we do loyalty reward programs is already behind the curve!

In the US, it’s getting pretty obvious even how US millennials and Gen Xers have a hugely different relationship with technology. More importantly, the individual difference between

  • digital natives who are early adopters
  • Non-digital natives who are slow adopters

Is just huge!

10 years in the eternity of virtual time, is another fundamental way of thinking influencing how people:

  • socialize
  • assimilate information
  • communicate
  • & create content
  • & relate to brands digitally

Key Differences

56% of US Millennials say their phone is their most valuable shopping tool.

Guess how much that is for Legacy Xers? It’s just half that, at 28%. That’s a generational chasm that spans a lot of apps, texting, SMS and instant seamless communication. Can you imagine the differences in the spontaneity and mobility of the lifestyles of these two different groups of people as consumers?

How is Loyalty Built?

Only 1 in 4 Americans say they are brand loyal. This demonstrates a new reality, the death of legacy brand loyalty is because, brand loyalty is built through useful experiences.

  • Advertising is useless (not interactive and therefore not engaging). Think of how a Millennial views a TV commercial?
  • The age of brand amplification via advertising centric models is over, unless you have a nifty video on Snapchat.

SEAMLESS what?

With the rise of the emphasis on cross-channel transitions from digital touchpoints to mobile clicks, you have to as a brand, get this right.

If mobile is your be-all-end-all device (well in 2015 it was), how good is your cross channel convenience for the consumer? How good is their digital customer experience? This counts, really.

Cross-channel return policies are one major point of friction: more than two-thirds of consumers in the United States, the United Kingdom and Brazil (71%, 69% and 77%)

So if your brand screws me over online, might I get a bit less loyalty to you? Damn right, you betcha!

Good Mobile Experiences = Loyalty

Even in the face of the obvious, to be online is the illusion of infinite choice. So as a brand are you giving your customers choice, really?

Let’s be real though, digital interactions are now key metrics in how I connect with your brand emotionally. Don’t have an outstanding Instagram? Why should I bother with you. Don’t SMS me? Who reads Email anymore. I certainly begrudge a brand that forces me to give my Email address.

What does this mean in Other places?

In countries like Brazil and China, where internet penetration remains relatively low, yet according to a study by Razorfish, this does not result in less-demanding connected consumers! So you see, this is a global movement.

Consumers in Brazil and China, 
for example, hold e-commerce sites to a higher standard than other markets; 79% and 87% of people in those countries, respectively, believe that most online shopping sites need improvement compared to 52% in the U.S. and 50% in 
the U.K.

In a paradox of fate, all this virtual hoopla have significant statistically differences between countries and regions of the physical world.

If Digital touch points have redefined what brand loyalty means, how do brands adapt a faster digital evolution of the human-AI interface?

Chasm of the Great Divides

Going back to Gen Xers (“Legacy” is my term for them), we are talking astronauts and dinosaurs here. But the spacemen will soon be displaced by cyborgs, I quite assure you.

If mobile dominates the millennial customer journey and consumer experience, let’s just call them “digital natives” goddammit. When I write about millennial trends, I literally get hate-mail and trolling about this term. I try to remind them, I did not invent the word. I’ve even taken pains in past articles to segment this group.

In 2016, we are seeing FinTech disrupt how younger Millennial interact with money digitally.

For a digital native:

There is no difference between online and offline, this is just a convenient name for Legacy dinos to understand it.

For the most part, digital natives ignore media in its traditional forms. The are mobile engagers and multi-device users. They are content creators and fluid innovators, most of them will have over 5 social media channels active and text message in any number of ways.

  • So why are brands still blasting the same Email message to everyone!

In 2016, Millennial are not even the trend-setters, that’s now become the privilege of iGen (sometimes called Gen Z). They are 21 and under. If Millennials are the new freelancers, Gen Z are the future entrepreneurs and data-augments.

Older Millennial and Gen Xers have a gap of not even a decade, however if I was socialized on social media and you were not how different are we? You talk on the phone and I communicate on Twitter, it’s an entirely different approach to relating to others in the world!

Digital natives are therefore:

  • More engaged with technology
  • More mobile friendly and adopting of wearable devices
  • Have invested more of their “identity” online
  • Relate to brands less physically and more digitally
  • Will adopt new trends more readily
  • Will push the boundaries of content consumption and content creation
  • Will tend to be more in favour of data-centric solutions (instead of the gut instinct of legacy folk).

It’s a New Paradigm

  • With new kinds of wearable devices, this trend of differentiation will continue.
  • Young shoppers are obviously then, more likely to be mobile shoppers.
  • Each year, the number of mobile searches vs. desktop searches on your website increases, it was 50% in 2014, and could be as high as 60% at the end of 2016.
  • Become the Internet of Things, we are seeing the Internet of Screens, no joke. It may sound barbaric 20 years from now, but that’s the sad reality today.
59% of U.S. Millennials use their device to check prices while shopping compared to 41% of U.S. Gen Xers

Mobile payment is going to become standard, since 66% of digital natives are interested in it.

Seamless…..Convenient…….Faster……..Is………..Better

When I hear of retail stores going with loyalty coalition networks, thereby giving their customer data to a 3rd party, I have to cringe, because:

Seventy-four percent of U.S. Millennials trust brands to protect their privacy compared to 63% of Gen Xers.
  • Cyber security and protection of personal information is a huge issues on the digital globe.

Video Content will be key for Brands

Grey = Gen Xers

Black = Millennial (digital natives)

iGen, who were raised on tablets, consume WAY more video content than Millennials. So it’s obvious, video content will be the key platform for how brands reach audiences. Snapchat is evidence of this.

Millennial are Hardwired Differently

For a digital native online, digital consumption is an emotional experience. Because of our dependency on digital, literally, our digital dopamine triggers makes a cool Instagram for example, more salient to us than it would an older person (or a slower adopter of digital channels).

If we grew up gamified and possibly, obsessed with our digital identity, it’s another level of interaction we are seeking from brands online.

Seventy-eight percent of U.S. Millennials and 72% of U.S. 
Gen Xers admitted to often feeling dependent on technology. Some- times, it happens because of speci c functions on a smartphone

Kids who text thousands of times a month, or people who check their smartphone 200 times a day, are not mentally ill! That’s just the new normal.

I’m not saying obesity in the states of being addicted to digital is healthy, I’m just saying it’s more common. For Retail, it’s beyond huge. I just wrote an article recently about the adaptions of big box retail closing down stores to adapt to mobile consumers.

Mobile Armageddon

The entire world is going mobile:

What does this lead to you may ask? It leads to two things in my mind:

ATTENTION

1) The new competition for attention that’s multi-device, I call this the attention economy.

DIGITAL EXPERIENCE

2) The digital experience economy (basically customer experience online).

VALUE EXCHANGE

The value exchange of the mobile shopping with the brand has change the game. It’s no longer about a transaction, it’s about a relationship. That brands that do well are those that can elicit trust, reciprocity and commitment in their audience. I just wrote an article today about this.

CONSUMER INTERACTION

If I belong to a cohort, that’s been bombarded with 5000 advertisements a day, do you think they will actually work on me? Content that’s persuasive to digital natives has to be more interactive. That’s why in 2015, we saw the rise of UGC and CSR.

It’s not just about does your brand have video content? It’s about what do you stand for as a brand and how inspiring are you as a thought leader, a style leader, how much authentic swag have you got?

What Have you done for me Lately?

Eighty-six percent of consumers in the U.S. say they value brands that are useful over brands that are interesting.

So how does your brand therefore, make peoples’ lives better?

Digital Dopamine in Practice

So the digital dopamine is also utilitarian:

No surprise here, Chinese are the most pragmatic. But this entails another dimension to user-centricity, it’s the arrival of the CONVENIENCE ECONOMY. Digital natives don’t expect seamless experiences, they demand them. That’s why I’m such an advocate of independent retailers to get on the cloud and adopt SaaS solutions that speak to this need.

Part of the value exchange in the attention economy is then, convenience. Yes it’s pretty intuitive right, but you would be surprised how many brands and retail stores neglect this. Adopting gimmicky legacy loyalty reward programs with many external (“clunky”) parts is a good example of this.

Now listen carefully, and this is important, what are we being influenced by:

  • Digital natives trust other consumers, not brands!
  • Advertising is a waste, it’s ineffective!
  • Interactive social content and Campaigns (UGC and CSR) are on the rise!

Again this may seem obvious, but you would be surprised how many brands and retailers just don’t get these simple truths. It’s not maybe that they don’t understand then, it’s that they don’t have a strategy and do anything about it.

Journey of Seamless Commerce

So with omni-channel customers, the result is a digital journey of cross-channel convenience.

In the attention economy, it’s less about removing pain points as much as it is about removing digital friction points and optimizing speed to convenience.

The future star his the connected storefront. Have a poor website that’s not optimized for mobile? These goes your first impression with digital natives.

The numbers speak for themselves: 84% of people in Brazil and 92% of people in China say that a bad brand website negatively impacts their opinion of the brand.

It will likely be the last time they even hear of you.

So what do you make of all this? Tell me in a comment below.