What we can learn to connect with Gen Z (people under 26) in sales and marketing — from eSports to virtual weddings.
Covid-19 gave an acceleration in digitalization as a forced shift of behaviours. Yet, there is a larger demographic shift on top of that.
For a recent customer project, I tapped into the enormous and rapidly growing market of eSports, which gave me a few thought provoking insights into what it means to sell to people under the age of 26.
To make the case for the industry — 443 Mio people were eSports watchers in 2019 and this number will reach 600 Mio by 2021. The global video game market is forecasted to be worth $159 billion in 2020 of which mobile will account for 48% alone. To compare — music industry revenue was at $57 billion in 2019.
Consumption patterns explored will reveal insights into how Gen Z works, learns and approaches leisure time as this generation has entered today’s workforce.
Business Models that are built around low barriers of entry and user experience.
While the degree of commitment to freenomics, subscription based business models and on mobile are still debated in many industries, they are taken for granted by Gen Z. Free-to-play games allow vendors to monetize without the need to convince customers to make up-front purchases. Instead upsell opportunities such as upgrades and expansion packs bring in desired revenue. Microsoft has reported that subscription gamers increase play time by up to 40%. Google recently removed a $130 sign-up fee for its cloud gaming service, hoping that the value offered will convince users to stay.
Brand and content authenticity are being tested — Community comes first.
Consolidation is ahead for organizers and publishers. Telcos, Entertainment and Media companies are only the first to feel the transformation in how to address new channels in order to reach those that are under 26 years old today. Platforms you might never heard of, draw millions of viewers. New digital streaming events have lowered the entry barrier for new consumers. Bitesize information and authenticity of content are key. Twitch became the World’s Go-to Game-Streaming Service with 140 Million unique monthly and 15 Million daily active viewers, since it is able to create authentic content by giving young people the experience to watch their friends play from their couch. Unlike other conventional sports events (Olympics and World Cup) that were legitimised by international institutions, eSports is a representation of the power of communities that drove those from the outside to give eSports the reputation and attention it has today. A strong sense of community spreads across a variety of new digital platforms, hence needs to be understood and addressed accordingly under the absence of a governing institution to reach the young audience.
Technology is adopted to a degree that it does not need to be called out — The total blend of virtual and real life.
Lifestyle changes by embracing virtual — not only because of Covid-19, but accelerated through it and foremost based on the willingness of young adults to spend additional screen time every conscious waking hour. The casual video gamer spent on average six hours, 20 minutes each week playing games, while a professional eSport athlete trains 8–12h per day so that they can compete. Therefore spending more than 5 additional hours per week in a virtual world seems to become the new normal for many. And we are talking here about free additional time spent in the virtual environment i.e. outside work or required assignments such as virtual education. Around 5% of people worldwide regularly go to virtual gaming worlds. Even in Switzerland, at 14%, this figure is significantly higher.
On a more romantic occasion, I attended my first virtual and Zoom hosted wedding last month. 200 attendees, an upbeat wedding host, a couple in a game show setting and a seperate window to contact tech support, made sure my wife and I spent two hours well entertained while sitting in the comfort of our living room 10.000 Kilometers from the to be married couple. Actions were taken so that all the messages and moments newly-weds usually share with their guests a.k.a. “wedding community” could be understood and it felt celebrational without any notion of technology in the way — a seamless user experience. In all aspects of life video conferencing faced a steller adoption rate. During a time when most fear a recession — Zoom as a business had increased revenue by almost 170% year-on-year to $328 million for their first quarter 2020 and expects to close this financial year with double its revenue to between $1.78 billion and $1.8 billion.
What once was parental guidance to steer children away from spending free time on virtual platforms, has not not yielded the expected results 20 years down the road. Technology barriers have been broken down and Gen Z lives in a mixed reality that embraces the virtual world.
Why you should be excited…
- Think about the community to reach beyond the technology in use, since tech and digitalization is not the discussion for a person under 26 anymore. Although Covid-19 has brought us many doomsday scenarios — it also gave an acceleration in digitalization as a forced shift of behaviours. Yet, there is a larger demographic shift on top of that. There is an opportunity for the long-run once we understand younger consumers, co-workers and customers.
- User Experience goes beyond the interface and embraces an entire business conversation. It needs to be seamless as virtual and real life are one for Gen Z. Businesses like Zoom, that invested ahead in a seamless user experience and new business models like freenomics and subscriptions have benefited from the acceleration already.
- Digital Business Models become less of an add-on to conventional industries. Rather, digital business has become the very fabric of new high-growth Industries. The most encouraging part is that with normal and lasting demographic change, there is now an addressable market of highly engaged consumers and an entire eSports industry on the rise that we all can learn from!
