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#NEXTGEN

2015 A QUALITATIVE STUDY OF THE NEXT GENERATION

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ORANGE ALS TRENNER!

INTRO

METHOD

RESULTS

CONCLUSION

OUTRO

IMPRINT

#CONTENTS

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#INTRO Dear Readers,

For almost twenty years now, SinnerSchrader and the rheingold Institut have been following an evolution whose excitement, speed and consequences for all of our lives never cease to amaze us: the story of the Internet.

In 1996, the year SinnerSchrader was founded, just about four million people in Germany were online. A company called Amazon celebrated its second birthday with an annual revenue of a relatively modest 15 million US dollars. Nobody could really foresee how quickly and comprehensively digitisation would change human behaviour and thus most business models.

In the same year, the IFM Köln market research institute, which became the rheingold Institut two years later, published a study entitled “Die Seele im Netz” (“The Soul in the Net”). Here, too, the influence of digital technologies on human behaviour and their possible implications for future developments were being considered at a very early stage.

We are living in this future now. Last year Amazon turned twenty, Facebook celebrated its tenth birthday – and SinnerSchrader and rheingold have taken the anniversaries of these giants as an occasion to jointly and intensively look at the next generation of users and decision-makers, going well beyond what can normally be found in statistics about digital natives.

From the findings we gathered, we can conclude that traditional marketing practices need to be reconsidered much more than previously assumed if we want to find the right level with the users and decision-makers of tomorrow and thus secure the future viability of our own companies.

We hope you enjoy reading this and learn many new things.

Nils Wollny and Heinz Grüne

NILS WOLLNY

MANAGING DIRECTOR STRATEGY, SINNERSCHRADER

HEINZ GRÜNE

MANAGING PARTNER, RHEINGOLD

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#ME TH OD

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#METHOD1

A psychological exploration was used to examine what motivates the “NEXT Generation”, which offers are relevant to them and for what reasons, and which technical developments that will change everyday life are supported or feared by them.

The surveys were conducted in April and August 2014 in Hamburg and Cologne in a total of three waves. In April the twenty-somethings (20–29 years old) were questioned, then in two successive weeks in August the teenagers (13–19 years old) and finally the kids (6–12 years old). In intensive individual and buddy interviews as well as group discussions, a total of 60 young adults, adolescents and children born between 1985 and 2008 were questioned.

All respondents over the age of 13 used the Internet regularly, i.e. at least once a day, and have owned a smart phone of their own for at least two years. All children aged between 6 and 12 have access to their parents’ tablets, smart phones or computers, and this is how they come into contact with the Internet. Their parents have had a smart phone for at least two years and go online for personal reasons at least once a day via a PC, tablet or smart phone.

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In addition to this exploration there were also expert discussions: As part of the NEXT14 Digital Conference initiated by SinnerSchrader, the NEXT CXO Circle was founded – an interest group of CEOs, CMOs, CDOs and CIOs with the aim of ensuring closer and more intensive exchanges on digital developments.

At the second meeting of the NEXT CXO Circle at the Reeperbahn Festival in Hamburg in September 2014, those present were given an exclusive insight into the results of the study and were asked for their evaluation. The results were also discussed with more experts at the NEXT Executive Expedition to Le Web in Paris in December 2014. The findings were incorporated in the “Conclusions” chapter.

#METHOD2

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#RE SU LTS

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#TWENTY-SOMETHINGS1

Twenty-somethings behave like veterans of the digital age. Although they are only between 20 and 29 years old and thus naturally familiar with the digital world, twenty-somethings feel much older than teenagers with regard to handling digital offerings. They are already at a stage of satiety and stagnation. They are much more critical of innovations. They are increasingly scrutinising innovations for their relevance to everyday life.

Twenty-somethings see themselves as owners of digital brands. The lives of twenty-somethings are closely entwined with digital brands. However, these brands are considered nowhere near as important to building personalities or forming identity as analogue brands. The twenty-somethings know that digital services usually need a critical number of users to be really attractive. They are very well aware of this power. That is why they quite naturally see themselves as joint owners of the digital brands they use.

AGE-GROUP 1985–1994

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AGE-GROUP 1985–1994

Twenty-somethings are well aware of their dependency on digital devices. Almost all twenty-somethings describe themselves as “dependent” on or “addicted” to smart phones, tablets or other connected devices. They can no longer imagine a life without these devices and their services. At the same time, they are all looking for filters that will free them from the complexity of permanent innovation and the surfeit of information.

Twenty-somethings reject everything that does not promise immediate benefits. In the digital world, everything that does not have a functional value is rejected. The focus lies on real benefits – for companies, this is often the only remaining way of establishing a sustainable brand image. Empty marketing stories and gimmicks are unmasked and rejected by twenty-somethings in a matter of seconds.

Twenty-somethings know that their personal data is a currency. Privacy and its protection are an important subject for young adults. But their attitude to it is completely ambivalent. They are aware of the risks of transparent data, e.g. misuse by third parties, but at the same time there is no way they would go without certain services. This means that they are surprisingly open to offers to simply sell sensitive data for something in return.

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#TWENTY-SOMETHINGS2

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#TEENAGERS1

Teenagers yearn for stability and substance. Digital brands are perceived as pure infrastructure – as a setting or framework in which people are constantly moving. Everything is in flux within this infrastructure. Whether it’s content or information – they are constantly sharing and being informed. When dealing with this constantly changing environment, they express the desire for constancy, for suitable filters and for substance.

Teenagers live in constant fear of an Internet firestorm. Teenagers are firmly anchored in social networks. With their online presence, the chances of being noticed and discovered rise – but most of them are scared of exactly this. They fear the unforeseeable developments if someone criticises, uses or distorts their content. Monitoring digital existences – their own and those of others – becomes an all-consuming task. The unending connection with their own digital habitat is a meta-program in the background that is never closed. The actual reality becomes ever less noticeable.

AGE-GROUP 1995–2001

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#TEENAGERS2

Teenagers surrender to their digital dependency. Just like twenty-somethings, teenagers are well aware of their dependency on digital media and devices. But they don’t see any need to act. Going without their smart phones is absolutely inconceivable for them. They are permanent parts of their lives. Anyone who even temporarily cuts back on their digital connection is out of the loop. But the young people know very well that the use of smart phones, social networks and apps makes them into transparent users. However, they accept this transparency as a matter of course – unlike the twenty-somethings, who expect specific benefits and added value in return for personal information.

Teenagers move between being high-profile and having no profile. The teenagers use social networks to work on building up their image. Photos, videos, locations, connections to the right friends and shared external content constitute the desired image of their own personality. Every “like” received is viewed as a compliment – and as confirmation

that they are on the right development path. Teenagers optimise their digital presence accordingly. Their own actual personalities fall by the wayside. What everyone likes becomes the norm and what everyone uses becomes the standard.

Teenagers find even Googling too much bother. Convenience is the modus operandi of teenagers: Everything has to be as effortless, simple and fast as possible. The active search for information is seen as too laborious. Everything has to be handed to them on a plate. And there’s more: Having a multitude of options leads to an inability to act. Teenagers view a decision for one option as a decision against a thousand others. The alarming effect: More knowledge leads to even more (undesired) options and thus to even less movement in any direction – in other words, to a standstill.

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AGE-GROUP 1995–2001

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#KIDS1 A smart phone is a kid’s umbilical cord to its parents. Most kids get their first smart phone of their own when they start school. It is their access to the digital world – albeit still strictly regulated. Since children know about the expectations of adults – even those that are not explicitly articulated – they anticipate how their parents will probably react to offers and products, such as websites, apps and smart phones. Nevertheless, it is still very important to them to comply with the grown-ups’ ideas.

Kids first go online through their games. Kids usually first come into contact with the Internet through games. However, these games are a very limited framework because they are still easily understood by their parents, who approve or ban them. Games for kids are therefore a first small framework, a playpen, where they can move freely without running the risk of constantly overstepping boundaries.

AGE-GROUP 2002–2008

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#KIDS2 Kids sense the limitlessness of the Internet. The kids of today know that the Internet is a vast resource. However, they are not allowed to explore this resource on their own yet. Their dealings with the Internet are marked by uncertainty as soon as they become aware of everything that can happen there. The kids have understood: “You can go into the world unfiltered, but the world can also come to you unfiltered.” They are unsettled by this – they look for filters.

Kids see Facebook, etc. as monsters under the bed. The kids associate risks mainly with social networks. However, the basis for this feeling is often not a bad experience of their own, but simply statements from adults. Facebook is omnipresent for the kids, but is heavily criticised – particularly thanks to the discussion about data theft. The kids feel that the potential consequences of a mistake here are so uncontrollable that they would rather not bother with experimentation at all and instead listen to their parents without great reservations.

Kids are taking digital authority from their parents. Digital technologies are permeating ever more aspects of our everyday lives. At the same time, the associated distortions are not subject to any control or predictions and thus cause concern for parents. Dealing with digital technology is a gamble for the kids that each one has to undertake on their own. After all, there is no one who really knows how it all works. Not even Daddy. Once the kids have cracked the code and understood that they are more expert in this field than their parents, trends show that they also use this power to their own advantage.

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AGE-GROUP 2002–2008

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Technology is overtaking humans. In many cases it is clear that, just like their parents, the young people are losing control and losing track when dealing with digital technology. The net is developing more quickly than most people who use it: As soon as you think you know how to deal with it safely, along come new technologies that turn everything you have learned on its head. This technologically driven overload is speeding up the digital divide – the separation between virtuoso digital insiders and disenfranchised digital outsiders.

Like-dislike logic defines life. Young users in particular live in a like-dislike logic. They practise extremely quick, extremely superficial evaluations that are free of any deeper engagement with a subject. The construction of such a black-and-white world can be understood as an attempt to recreate more order, clarity and transparency.

Technology generations are replacing birth generations. The orientation on birth generations (grandparents, parents, children) is currently being replaced by an orientation on device and software generations. But due to ever-shorter innovation cycles, the gaps between these generations are becoming ever smaller. This explains the great differences between the seemingly so close twenty-somethings, teenagers and kids.

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#OVERALL FINDINGS1

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“Benjamin Button” returns. The net has a very powerful effect on young, still unformed people. That is why these young people appear much less playful and keen to experiment when dealing with digital media than their parents. Sobriety and caution dominate their dealings. We therefore have to ask the question: Who is really the child here?

Digital media are becoming an all-encompassing infrastructure. Providers such as Google, Facebook and Amazon are perceived by young users not as brands, but rather as the infrastructure for their digital everyday life. An infrastructure that gives them access to digital offerings while filtering and simplifying them. For them, the idea of a brand applies only to something tangible and concrete.

#OVERALL FINDINGS2

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#CON CLU SIONS

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#CONCLUSIONS1

User first, business second. The consistent focus on people’s wishes, needs and dreams is the feature of successful services such as Uber or Netflix. Only when real insights are addressed with clearly comprehensible concepts is it worth transferring them to business cases and processes. The traditional way of approaching the subject of innovation from the market and process perspective leads to a dead end and jeopardises the future viability of brands.

Branded services are the new brand communication. The development of services with a high utility value and the simplest operation promises the greatest success. It is becoming the true form of brand communication. Obviously, branded services also need campaigns to draw users’ attention to them.

However, in future it will not be the campaigns that are at the heart of marketing, but the service. Because it is only through the service that a brand’s promise can be directly experienced.

Differentiation is limitation. In the digital sphere the main concern is popularity. Brands have to take leave of the traditional differentiation logic and address dominant typical applications and themes. By contrast, if they concentrate on niche issues – to differentiate themselves more clearly, for example – they will find fewer adherents in future and will thus quickly disappear from the relevant set of the new user generations.

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Mobile only instead of mobile first. The study could not have shown it any more clearly: For young people, it’s all about their smart phones. The phones go everywhere with them and function as a remote control operating every aspect of their lives. Wearables could also be well received by teenagers because of the even greater convenience. Therefore, concentrating on mobile applications is the only way of reaching young users in future. Everything else is superfluous.

Convenience is king. Actively offering instead of passively providing – digital offerings have to be perfected with respect to simplicity and convenience. Even today, aggregator services are the big winners, and they will dominate the future more than ever. Simple, clear branded services that focus on individual applications can quickly help brands achieve a higher relevance and become integrated in the everyday lives of young users in the long term.

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#CONCLUSIONS2

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#OUTRO The demands of young users require established marketing routines to be abandoned more clearly and decisively than ever. This requires a corporate culture that is oriented toward the needs and interests of the user in every respect – under a leadership that actively shapes the digital change.

The key task is to anticipate digital user experiences and constantly develop them further – taking account of the areas of Commerce (transaction of goods and services), Connection (linking the physical and virtual worlds), Content (content of great interest to the users) and Campaign (communication between the brand and people).

Combining these four Cs into a holistic NEXT EXPERIENCE will become the decisive factor for success in the struggle for the favour of young users.

You will find information on the NEXT EXPERIENCE here.

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#IMPRINTAbout SinnerSchrader SinnerSchrader is one of the leading digital agencies in Europe. With a focus on e-commerce, strategy and communication, SinnerSchrader offers the whole range of digital agency services: conception, design and development of Internet platforms, mobile apps, service design, campaigns, media, analytics and audience management. SinnerSchrader stands for technological excellence. 500 employees – of whom 200 are developers – realise marketing solutions for brands such as Allianz, Beck’s, comdirect bank, Holy Fashion Group, REWE, simyo, Tchibo and TUI. SinnerSchrader was founded in 1996, has been listed on the stock exchange since 1999 and has offices in Hamburg, Berlin, Frankfurt am Main, Munich, Prague and Hanover. www.sinnerschrader.com

About the rheingold Institut rheingold is one of the most prestigious addresses for quality psychological impact research. On the basis of morphological psychology, which was developed by Cologne University, around 50 permanent and 120 freelance employees, mainly graduate psychologists, analyse the unconscious psychological influencing factors and contexts that help to determine the action of each individual person – when shopping and consuming, in markets and media, with often surprising results. Every year, more than 7,000 men and women “lie on the couch” at rheingold. The Institut (formerly IFM Köln) was founded in 1987 by Stephan Grünewald and Jens Lönneker.

http://www.rheingold-marktforschung.de

Copyright 2015 SinnerSchrader Deutschland GmbH. This presentation, including all of its parts and contributions, is protected by copyright. Any use requires the prior written consent of SinnerSchrader Deutschland GmbH, Völckersstraße 38, 22765 Hamburg, Germany.

Text: Heinz Grüne, Patricia Achut (rheingold Institut), Nils Wollny, Stefan Förster (SinnerSchrader). Design: Philipp Kafkoulas, Benedikt Stalf. Editing: Dieter Schlichting, Büro für Lektorate und Übersetzungen, Hamburg, Germany. Illustration: Christian Schupp. Photos: Nils Hasenau, Sabine Bielmeier, Steffen Böttcher, Katrin Saalfrank, François Tancré, rheingold/Balsereit.