The world and its people are constantly evolving. A lot has changed, including the way we spend. The younger generation, also known as the millennials have radically different priorities than their parents' generation.
Millennials have different values, and are leaning more towards value-based spending. Value-based spending can mean different things to different people. It is about making choices that reflect your personal values and priorities.
For some people, this means investing in tangible goods that will bring them joy and satisfaction. For others, it means spending money on enriching experiences that will create lasting memories and a sense of purpose.
Young consumers, especially those in their 20s and 30s, are more likely to be value-based spenders. They are often more interested in experiences than products, and they are willing to spend money on things that will make them feel good about themselves.
WHY YOUNG CONSUMERS VALUE EXPERIENCES OVER MATERIAL POSSESSION?
Millennials are the generation that was born between the early 1980s and the mid-1990s. They are the first generation to grow up with the internet and other digital technologies. This means that they have been exposed to more information than any other generation in history.
The internet has made it possible for millennials to access information from all over the world at the click of a button. They can learn about anything they want, whenever they want. This has had a profound impact on the way they think and learn.
This has made them more critical thinkers than previous generations. Previous generations were more likely to take things at face value. Millennials, on the other hand, are more likely to question information and look for evidence to support it.
For example, the media may influence us that buying things will make us happier. However, millennials are more likely to question this claim. They may look for research that shows that buying things does not actually lead to happiness.
These young consumers are often characterized as being more interested in investing in experiences than possessions. This could be due to a number of factors, including:
- The rise of social media documentation: Social media has made it easier for young people to share their experiences with the world. This has created a culture of FOMO (fear of missing out), which drives young people to seek out new and exciting experiences.
- The rise of the sharing economy: The sharing economy, which includes services like Airbnb and Uber, has made it more affordable for young people to travel and try new things. This has made experiences more accessible and appealing to young people.
- The YOLO lifestyle: YOLO which stands for "you only live once," is popular among young people. This philosophy encourages young people to live in the moment and make the most of their lives. This often means spending money on experiences, rather than material possessions.
As young people become more financially stable, they are likely to continue to spend money on experiences that will create memories and a sense of purpose.
The younger generation's focus on experiences is having a significant impact on the economy. Businesses are increasingly catering to this trend by offering more experiential products and services.
WHY ARE THE 20's & 30's THE TRENDSETTERS?
People in their 20s and 30s who are more likely to spend money on experiences, such as dining out and traveling. They are more likely to believe that experiences are more valuable and lasting than material things.
This is because they are in the most active phase of their economic life. Young adults in their 20's and 30's are likely to have jobs and disposable income, which gives them the freedom to spend money on things they enjoy.
Second, they often have fewer fixed commitments, such as assets or houses. This means that they have more flexibility to spend money on experiences.
Third, people in their 20s and 30s are often more focused on the present moment. They may be less concerned about saving for the future, and they may be more willing to spend money on things that will bring them joy right now.
The trend of spending money on experiences is likely to continue as the 20-30s become the dominant demographic in the workforce. Businesses are already catering to this trend by offering more experiential products and services. For example, many restaurants are now offering tasting menus or cooking classes.
HOW DOES THIS RELATE TO US IN THE F&B INDUSTRY?
With all these background information on how the younger generation are spending on experiences rather than on material possessions, and their motivation behind that... You may wonder how does that relate to us as café/restaurants/business owners?
In Malaysia today, cafes and specialty coffee shops are not an uncommon sight. There seems to be no hint of cafes, coffee shops and bake houses’ popularity decreasing any time soon. In fact, the number is on a rapid increase because of the growing coffee drinking and café culture.
This is because the café culture is now an intrinsic part of the younger generations’ life. Cafe hopping and food tasting has become a culture that was created by the younger generation, in search of the full experience - i.e. spending on a cup of coffee perfected with beautiful latte art, in a café whose ambience is worthy of an Instagram check-in.
Photo credit to Buro247.my
WHAT DOES THE MODERN CONSUMER WANT?
The modern consumer is willing to spend a little more on great products and experiences. For us in the F&B industry, this means the quality of the food, drinks and services is the top priority for customers. It is the complete quintessential café or restaurant experience that is of value to people.
Take cafes for example. Cafes have become increasingly popular in recent years. One reason is that they offer a relaxing and comfortable atmosphere. This is in contrast to local restaurants, which can often be more formal or perhaps noisy.
For example, one can still catch up with their family and friends over a cup of kopi-o at their local neighborhood kopitiam, but rather we would find the younger generation enjoying their lattes or cappuccinos at a café instead.
Cafes typically have more comfortable seating, and a warm and inviting atmosphere. This makes them a great place to relax and unwind. It is the overall ambiance, which greatly influences customers' experience and perception of the space.
This is why we find many cafes in recent years investing in aesthetically pleasing environment to provide their customers with a more comfortable space to spend time and enjoy their coffee and food.
Of course, the atmosphere alone does not suffice. If the service and/or products aren’t good, customers are likely to not return.
From the initial getting customers through the door to making them want to come back, customer experience and satisfaction are key.
We believe that by improving customer's experience and satisfaction, this will lead to repeated business and positive word-of-mouth from existing customers. Marubishi strongly believes that human management plays a vital role in achieving that.
HAPPY EMPLOYEES MAKE HAPPY CUSTOMERS
Human management is essential not only to improve employees' confidence, but to also increase job satisfaction, and reducing turnover. When employees are well-trained, they feel more confident in their abilities and are more likely to succeed in their roles. This can lead to a sense of accomplishment and job satisfaction, which can motivate employees to stay with the company.
This, in turn, has the same effect on customers – proving that happy employees make customers happy. Similarly, unhappy employees can negatively impact the productivity, turnover, and overall efficiency of the business, which, in turn, has a knock-on effect on the customers. This is especially prevalent in the F&B industry as staff are interacting with customers a lot during service.
When customers are satisfied, businesses benefit. This is because satisfied customers are more likely to return, spend more money, and recommend your establishment to others. Ultimately the success of a business lies in the hands of its employees.
In conclusion, investing in human management skills doesn't just make employees happier. It spills over beyond the company walls and into customer experience.
MONTHLY HUMAN MANAGEMENT CONTENT
This is a prelude to the human management content that we are planning to share once a month in collaboration with Okamoto-san from Japan, who is an expert in Human Management. Stay tuned! 😃