Chief marketing officers (CMOs) and marketing leaders face an uncertain and rapidly evolving situation as a result of the coronavirus, and they must take an aggressively proactive approach to preparing their organization for disruption, according to Gartner Inc. This article is copyright 2020 The Best Customer Guide.

CMOs must take immediate action in monitoring customer channels for unexpected and quick changes to customer behavior and purchasing needs, and prepare for potential disruption to budgets, plans, campaigns and strategy in the months ahead.

“CMOs who wait for shifts in customer perceptions and needs, interruptions to supply chains and operations, or restrictions on mobility, travel and mass gatherings as a result of the COVID- crisis will only increase risks to their organizations and miss potential opportunities to build customer loyalty,” said Augie Ray, senior director analyst at Gartner for Marketers. “The key to managing risks and finding opportunities in such a period of significant uncertainty isn’t to predict a single likely outcome, but to recognize the range of possible scenarios.”

Gartner recommends CMOs and marketing leaders take the following four actions to better prepare their organizations for disruptions related to the coronavirus COVID- crisis:

1. Build COVID- Contingency Plans
   The key to mitigating risks associated with COVID- and identifying opportunities is rigorous scenario planning. Marketing leaders should create three scenarios, spanning from best- to worst-case, and consider the potential impacts to customers, the marketing team, and brand strategies and tactics. While scenario-planning, it is prudent to coordinate with functional leaders across the organization in legal, finance, supply chain, IT and operations.
2. Monitor, Report and React to Shifts in Customer Behavior
   Maintaining customer-centricity is of utmost importance during times of stress, greater needs and quickly changing expectations. Marketing leaders must not only monitor customer values and sentiment against a global backdrop; they should also improve real-time listening to detect shifting customer sentiment so they can react immediately. In addition, as marketing leaders make decisions, they must carefully weigh short-term interests versus the value of sustaining and nurturing longer-term customer relationships during this time.
3. Prepare Marketing Teams for Interruptions and Challenges
   The actions that marketing leaders take now will set the tone, internally and externally, for how the organization will weather the crisis. From an internal perspective, it’s important that marketing leaders anticipate how business disruptions will impact existing marketing operations and formulate strategies to protect and adjust budgets. In addition, CMOs must assess the needs of employees and prepare for alternate workplace operations. Externally, marketing organizations should be ready for rapid changes toward at-home and digital delivery of products and services. Marketers must also consider changes that may need to be made to customer policies and procedures to stay attuned to the empathy that customers need and expect.
4. Review Marketing Plans for Potential Impact
   Failure to anticipate potential change to campaigns, promotions, event marketing, sponsorships and other marketing strategies will leave marketing teams in defense mode throughout the duration of the crisis. Marketing leaders’ scenarios should consider how restrictions to events and travel will impact sponsorship activation plans or campaign messaging. The coronavirus outbreak could also have significant impact on the timing of new products or campaign launches, and marketing organizations need to be agile in rescheduling or shifting messaging around these events. To avoid making reactive budget decisions, CMOs must begin to prioritize spending now and brace for rapid budget changes.

Additional information on what marketing leaders should be doing amid COVID-19 has been made available to Gartner for Marketers clients in the report, “Actions CMOs Must Take Now to Prepare for the Impact of the Coronavirus and COVID- Disease”.

This article was first published by Customer Network Strategy. Permission to use has been granted by the publisher.

Despite the persistent threat of a recession, consumers remain confident about their financial well-being and are contributing to CPG sales growth, according to IRI’s Q4 2019 Consumer Connect Survey. However, as consumers prioritize saving time, effort and money, they are shifting their shopping habits to channels they feel best support them. This article is copyright 2020 The Best Customer Guide.

In the full report, entitled ‘Channel Trends in CPG Today’, IRI analyzes how this shift is affecting consumer shopping channel preferences and in-store behaviors. Joan Driggs, IRI’s vice president of Content and Thought Leadership, explained: “Despite an atmosphere of economic uncertainty, consumer confidence and outlook remain favorable. The optimism we recorded in our Consumer Connect survey is likely to have a positive effect on sales in the CPG industry, which we expect to continue growing incrementally through 2020, and exceed $886 billion by 2021.”

That said, certain channels – such as dollar stores and e-commerce – provide stronger value propositions to customers, and are gaining shopper visits, while more traditional retail channels, such as mass market, supercenters, drug and grocery show declining visits. This suggests that, despite their confidence in the future, consumers are still focused on finding new ways to save.

The index monitors the current financial health and outlook of consumers, differentiating between the sentiments of various income groups, races and generations. The Q4 report revealed that overall consumer confidence has increased by nearly 1% since the Q4 2018 report, and 1.5% against the data from last quarter, overcoming the threat of recession. Fifty-seven percent of consumers reported that they feel good about their financial health, and 73% expressed confidence that their households’ economic well-being would improve within the next six months.

IRI observed the most widespread feeling of financial stability among older generations and high-income households, as well as Asian and non-Hispanic consumers. Millennials and African Americans reported the most widespread confidence that their financial health would improve in the near future.

Shift Toward Convenience and Value
The study observed that consumer demand for convenience and value is increasingly influential in persuading a consumer to shop through a specific channel and at a specific store. Value retailers, which include dollar stores and e-commerce, have seen 1.4 and 6-point increases in penetration, respectively, since 2016.

While consumers still favour traditional channels such as grocery, drug and mass, the penetration in those channels has decreased over the same period, suggesting that they are losing shoppers to other channels. The IRI study also found that, when deciding where to shop, consumers weigh in-store experiential concepts and easy navigation services, as well as price, as heavy motivations for their choices.

“Consumers across the board cited time and cost savings as key drivers of where they choose to shop, which is causing a shift away from the channels that we are used to seeing dominate the CPG space,” continued Driggs. “In particular, we found that heavy shoppers are being attracted to dollar retailers over competing channels, likely because they are looking for ways to save. We expect this will continue to negatively impact sectors like grocery and pharmacy, which have lost their ability to protect and cultivate their core shopper base.”

The ease and value of the dollar channel led consumers to increase the frequency of trips per month and per-trip spending compared to a year ago, relative to competing channels. E-commerce platforms also experienced a greater number of trips, but saw average basket size decrease, as shoppers got more comfortable with the platform and the expectation of quick delivery.

This article was first published by Customer Network Strategy. Permission to use has been granted by the publisher.

Employers and business leaders take note: a one-size-fits-all approach to defining a generation will cost both talent and customers. As Generation Z (the generation of those born between 1997 and 2007) begins to enter the workforce and flex its newfound spending power, connecting with them is critical. This article is copyright 2020 The Best Customer Guide.

To do that, it is important to identify and acknowledge the differences within the generation – something many employers and business leaders failed to do with millennials, to their own detriment, according to Ernst & Young’s ‘Gen Z Segmentation Study’, which confirms bucketing the most diverse generation to date into one simple type, despite their individual characteristics, goals and values, will be a costly mistake.

Gen Z contradicts many expectations
Gen Z is a walking contradiction to society and past youth when it comes to social media usage, core values and politics. Employers and business leaders should get to know the generation before basing plans on stereotypes:

1. Social media
Today’s youth are perceived to be obsessed with their social media activities, and while 84% of Gen Z say they have a social media account, they use it more for communication than for public sharing like past generations. When asked to choose their top reasons for using social media, EY research found:

• 80% of Gen Z use social media to connect with family and friends
• 72% use it to satisfy boredom
• 41% use it to stay up to date on news
• 22% share opinions through social sites

2. Values
Today’s youth are driven and future-thinking, with 79% saying doing well in school is very or extremely important and 72% spending time on activities that will help them in the future.

3. Politics
The general assumption tends to be that Gen Z is liberal, but the research shows that these young people represent the diversity of the political spectrum. The majority view themselves as moderate (39%), with an almost-even split between liberal (28%) and conservative (25%), and the smallest percentage falling into the “other” column (8%).

The power of five
The EY Gen Z Segmentation Study identifies the five segments of the Gen Z population and shows how much of the population each segment represents:

1. Stressed Strivers (35%)
   high achievers, driven by a fear of not being good enough
2. Big Plans, Low Energy (18%)
   expect to do well and make money, but aren’t necessarily willing to put in the effort
3. Carefree Constituents (16%)
   the definition of “go with the flow”; may not drive change, but will be the ones who adopt it into the mainstream
4. Authentic Activists (16%)
   motivated by the obligation to save the world – and the fear of what will happen if they don’t
5. Secluded Perfectionists (15%)
   focused on being the best, not for money or accolades, but for the love of what they do

“Companies need a Plan Z and to recognize the power of five – or that each Gen Z segment brings unique value,” according to Marcie Merriman, EY Americas Cultural Insights & Customer Strategy Leader. “Combining their strengths can accelerate innovation and transformation throughout an organization. The research shows us that while, as a whole, Gen Z are the true digital natives who grew up with technology and unparalleled access to information, their individual attitudes are proving to be diverse and varied. Understanding the drivers of each Gen Z segment is critical to providing them with the products, services and experiences they desire as consumers and the jobs they seek as employees.”

Societal changes impact how Gen Z is being raised
There are many components influencing the diversity we are seeing among Gen Z, such as technological innovations, medical advances and changing social norms. Gen Z is the first US generation born of three generations, meaning their parents can be baby boomers, Gen X or millennials.

The research shows that diversity also exists among the parents of Gen Z:

1. Free-Range (ish) (38%)
   care about their children’s well-being and will help them when they’re struggling, but overall, encourage their kids to be independent
2. Controlling Critics (33%)
   dictate what their children do and make their decisions for them, rather than raise them to be independent
3. Helicopter Parents (16%)
   worry about their children and want to have control to ensure they are on the right path for success, a holdover from the millennial era
4. Hands-Off (13%)
   detached from their kids’ lives, providing limited emotional support

The study found a correlation between parenting styles and the Gen Z segments they foster. The more involved parents are, the more likely their child is to be a Stressed Striver or Authentic Activist, while the more detached parents are likely to raise a Carefree Constituent or Secluded Perfectionist. The following chart further details these relationships:

Transparency addresses Gen Z’s trust concerns
As an extremely diverse, independent and proactive generation, Gen Z have strong personalities and values, making it hard to gain their loyalty – 67% of Gen Z say that people cannot be trusted. With the disposable nature of the current society, loyalty may seem like a lower priority to Gen Z, causing a greater challenge for companies. Transparency will help companies gain Gen Z’s trust and provide them with a platform to remain authentic, connected and fulfilled, and therefore, more aligned with their values.

To maintain relevancy in our fast-changing world, businesses need to adopt a Plan Z. Today’s youth are markedly different from past generations. They are more tech-savvy and globally aware, and have unprecedented access to information and opportunities to educate themselves – these truths have previously defined Gen Z. However, as they come of age, the contradictions and individuality within the generation are becoming clear. To take advantage of this endlessly empowered generation, companies need to understand the diversity within and the unique drivers in each segment, rather than viewing them as one.

Gen Z’s influence in the workplace, economy and society will be increasingly felt in the coming years, and understanding how they see and approach the world will remain important for employers, marketers, technologists, business leaders and more.

This article was first published by Customer Network Strategy . Permission to use has been granted by the publisher.