Deloitte’s 17th annual Digital Media Trends survey landed this week. And while the focus, as with previous editions of the report, was largely on SVOD (streaming video on demand) … a different acronym features almost as many times: UGC.
It’s the first time in at least five years that User-generated Content has featured so prominently in one of Deloitte’s influential trends analyses. And why? Well, it’s got something to do with the emergence of a new consumer: enter, Gen Z.
Tomorrow Comes Today
Among the insights shared by Deloitte in their report, two immediately stand out:
- 48% of the Gen Z and millennial cohort surveyed actually spend more time interacting with their peers in social media than they do in the physical world, and
- While 32% of people surveyed consider online experiences to be meaningful replacements for in-person experiences … for Gen Zs and Millennials the number scales up to 50%. (Deloitte)
Gen Z and Millennial respondents evidenced a growing proclivity for online experiences – and, increasingly, see an equivalence in the validity of the experience they’re having online versus offline.
This turn toward digital experience – while also offering perhaps a rarefied validation of certain “big bets” being placed by tech firms; if and when the metaverse arrives, it appears there’s a market for it! – is a timely reminder for brands of the importance of preparing for tomorrow’s consumer’s needs today.
As we learn in the survey:
- ~50% of consumers say UGC videos help them to discover new products or services to buy, and
- ~40% say they are more likely to purchase a product after they watch a creator review it.
It’s a ringing endorsement for the efficacy of UGC; “digital word of mouth” demonstrably offers persuasive social proof at the point of discovery. And it’s a series of insights that chime also with what we learned in our Content Trends Report, undertaken alongside the IMRG last year. In that survey – and in contrast to Deloitte’s question, which focuses specifically on discovery – we looked at the role of UGC across the whole purchase journey. As we learned:
- 73% of online shoppers say that User-generated Content (imagery shared on social media, reviews from customers, etc.) has directly influenced their online purchase decision-making in the past 12 months.
And once again in complement to Deloitte’s findings, we learned that for members of Gen Z UGC is the single most important factor when making a purchase decision on a brand site (more influential than ratings and reviews, branded content, etc.).
Reading across the two reports, there’s a feeling that for those generations who count “digital natives” among their cohort, a premium is being attached to “authentic” online experiences.
And from that point of view, it’s particularly intriguing that Deloitte’s survey categorises User-generated Content as a media its own right (i.e. not just as a singular format within the broader vernacular of “content marketing”).
UGC – in lockstep with Gen Z – is growing up.
Gen Z – Time to Get Real?
“We need to start looking at the realities of marketing to Gen Z –– they’re a financially strapped and stressed demographic that want to see real value in any products they consider purchasing.” (Future of Commerce)
With a whole generation of consumers now entering the market, the question of how to best market to Gen Z (born 1997-2012) is fast becoming the key topic of conversation for brands. Unique financial pressures – Gen Z has 86% less purchasing power than “boomers” did in their 20s (Consumer Affairs) – coupled with a truly digital-native lifestyle – Gen Z spends ~3 hours on social media each day, 33% more than Millenials (Statista) – have led to Gen Zs being the most discerning consumers out there.
To that end, brands need to tread carefully…
It’s incredible to think that, although the eldest of the group is only now hitting their mid-20s, we’re already a couple of marketing hype cycles down the road with Gen Z. And while DeFi and cryptocurrency, NFTs, and the metaverse have each experienced surges and (relative) collapses in popularity … only short-form video has really managed to create and maintain a mainstream following among Gen Zs.
A recent study has shown that Gen Z adults narrowly prefer YouTube (25.7%) over TikTok (25%), with Instagram (20%) a close third place (Forbes). And all available evidence indicates that, across the platforms, it’s short-form video (TikTok, Instagram Reels/Stories, YouTube Shorts) that is resonating best.
How to get short-form video right is a key consideration for brands right now; really, any sensible strategy for capturing and converting the attention of Gen Z should begin from that point and work its way out. It’s here that brands would do well to remember Gen Z’s insistence on authenticity – as one commentator puts it, “if your marketing content smells of a sales pitch, Gen Z will walk away.” (CMSWire)
When shopping online Gen Z needs to see authentic, customer-generated content; and it needs to know the brands they shop with can be trusted. It’s back to word of mouth, only now it’s digital.
Do You UGC?
What we’re learning, and in an increasing number of guises from an increasing number of sources, is that social proof content is also future-proof content.
To return to Deloitte’s survey, a key recommendation is made:
“Savvy brands should sharpen the art of social persuasion. Beyond selling and shopping, social media is a nexus for virality and buzz and can be central to stoking interest and driving entertainment behaviours … [T]he creators that fuel these services are not just entertainers but can become trusted guides and intermediaries.”
As Gen Z becomes the dominant demographic in terms of purchasing power (as soon as 2034 in the US, apparently!) brands will need to create more and better ways to strengthen their customer relationships – ways to turn customers into collaborators.