January 5/12, 2015; Volume 28/Number 14
By Ken Ryan
How quickly is technology changing the way we live and work?
According to one finding, email—which emerged as a consumer habit in 2002—will cease to exist as a communication tool by 2019 as it will be replaced by texting and video chatting.
Richard Honack, professor at Northwestern University’s Kellogg School of Management, shared this tidbit, along with other predictions, during his address at the National Association of Floor Covering Distributors (NAFCD) conference in November.
“We live in a world of a nanosecond culture, where things change much faster than our ability to learn,” he said. “In order to have a sustainable advantage we must have the ability to learn faster and change faster than ever before in history.”
His discussion, “Understanding Generations of the Nanosecond Culture,” touched on the technology habits of the different generations—from Gen Z (ages up to 16) through baby boomers (50-69) and beyond—and how the flooring industry needs to adapt and respond…or be left out.
“People don’t want walls anymore, so they are knocking them down,” Honack said, referring to Kellogg research findings. “In fact, they don’t want houses or backyards. They want to take the train, drink Starbucks and ride their bikes.”
When we think of social media, Facebook and Twitter come to mind. But in 2014, new platforms that gained followers include Instagram, Tumblr, Pinterest, WordPress, Viddy, ooVoo and Snapchat. According to Pew research, 87% of the world is on the Internet.
“We live in a FOMO [fear of missing out] world,” Honack said. “80% of women are on a smartphone and often use it to shop.”
Other key data points in his address include:
- We will not use traditional credit cards in seven years; we will buy everything with our smartphones. “We do everything with these phones,” Honack said. “If you have a smartphone on your desk, you check it every 40 seconds.”
- 62% of American adults have a smartphone today.
- 45% have slept with their phones because they want to make sure they don’t miss any important messages.
- The largest market for Kindle is people 50 years old and older.
- Tablet penetration is growing rapidly; it stood at 42% in January 2014, up from 34% in September 2013 and 24% in November 2012. Nokia said the penetration percentage was 56% as of November 2014.
- Baby boomers remember Dick Tracy and his futuristic watch. That watch, which sells for $347, is now here and does everything the smartphone does.
- Google Glass is here as well and can do everything your phone does. “This will replace smartphones for people who wear glasses,” Honack said. “This is how fast it is changing.”
Honack also provided an overview for the different generations, helping to understand the nanosecond culture and how it relates to different age groups.
Gen Z
(ages 0 to 16)
Gen Z represents the new market force. These individuals started using technology at age 2, got personal phones by age 6 and now spend over seven hours a day with media. “They understand the keyboard before they understand their ABCs, and they are learning from something other than a print book,” Honack said.
For Gen Zers, texting is the preferred form of communication—in fact, 82% text. And in 2013 they represented the largest group of Internet shoppers. “They buy online, not in shopping malls,” Honack noted. To illustrate just how much teenagers rely on the Internet, he revealed a statistic from last year revealing that 52% of those ages 16-17 said they don’t want a driver’s license.
Gen Y
(a.k.a. millennials, ages 17-34)
Millennials make up the largest generation in the U.S. and globally; they are also the largest consumers of goods and services. “They seek convenience and speed in life,” Honack said. “They do not want traditional brands or lifestyles. They do not understand the value of money because they haven’t paid for anything.”
Honack explained that millennials grew up in a culture in which “everyone was a winner, everyone got a trophy.” He said they also prefer to work in teams rather than lead. “They live for today and want work to be fun. They are not thinking about careers; they change jobs frequently and get bored easily.”
Fifty-six percent of millennials take a gap year between school and starting their lives/careers. They are graduating with an average $28,000 in debt, and according to Honack, have no problem with it because they know their parents will help them repay loans.
Millennials are also getting married later. The percentage of Gen Yers married by age 32 is 26%, compared with 36% of Gen Xers (ages 35-49) and 48% of boomers (ages 50 to 69).
Beyond that, millennials are not rushing to buy homes; 42% live at home with parents, up from 34% a year ago. “They don’t want homes in the ‘burbs; they want to live in cities, in condos. This is impacting the flooring market.”
Honack said, in general, millennials “are very laid back. They will do great work if you hire them but they won’t stay long; they are not interested in careers. At Kellogg we have already decided this. [Millennials] will go into entrepreneurships or nonprofits; they are not going to conform to the old, traditional ways.”
Gen X
(ages 35 to 49)
Gen X is defined as those born between 1964 and 1980, representing the smallest generation globally between the two largest generations. Interestingly enough, data shows Gen X represents the highest penetration of social media users. “They will change their minds based on word-of-mouth marketing and media hype,” Honack said. “This is the FOMO generation.”
Members of Gen X search and check the Web for most products and services before purchasing. “They want the best of the best at the lowest price. They will be brand loyal while it is trendy. They love playing fantasy sports games. For them, relaxing, taking time off and vacations are all very important.”
Baby boomers
(Ages 50 to 69)
Boomers represent the largest percentage of new Internet users. They are also selling their homes and moving to condos/apartments.
“The market you are in is changing so quickly with Gen X, Y and Z, and the boomers are not far behind.”
Honack explained that the overall dynamics of nanosecond engagement has changed. Because of the power of social media, the customer rules, and the flooring industry—among others—has to adapt to the customer. “We have to listen to the customer for the first time in history. If you do not listen to [her] you will go out of business.”
He noted that he has learned a few things about our online culture through his research and teachings. For example, he never saw Twitter gaining the popularity it has today. “I didn’t think Twitter would work. I thought it was ridiculous, but I was wrong.”