Why Brands Need To Prepare For The Great Wealth Transfer – Forbes

The Great Wealth Transfer

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We are standing on the precipice of the greatest transfer of wealth in modern history. In the next decade, Millennials and Gen-Z will gain trillions of dollars from previous generations. Most companies will need a strategy to attract younger consumers, employees and investors. A brand refresh won’t be enough. Companies need to rethink their entire operating model and value proposition.

Values-based Marketing

The historical relationship between brands and consumers has been transactional. Consumers bought products to fulfill a specific need, while brands sold goods in exchange for money. We purchased cars to save time commuting, food and drinks to gain nutrients and energy and laundry detergent to keep our clothes clean.

In the 20th century, brands started promoting the emotional benefits of products to stand out against competitors. Coca-Cola associated itself with happiness, Apple with thinking differently and Nike with overcoming adversity. Today, brands have to navigate a new dimension. Consumers are buying products based on values and beliefs. In an age when most products perform the same function, people want to know the brand story and its impact on society.

Belief in consumer brands is replacing religious faith and the declining power of the nation-state. According to Gallup, wealthy nations rank high on quality of life, whereas countries with low GDP ranked higher on meaning. In Western countries, individualism is the dominant idealogy—further compounded by virtual interactions and social isolation—young people seek a collective sense of belonging.

The search for meaning explains the explosion of brand communities. Young people no longer want to consume products. They want to actively participate in the creative process. The brands that can nurture a feeling of collective ownership and self-expression will win over the next generation of consumers. However, most brands are built for mass production and broadcast marketing. Building a community requires a change in mindset, relinquishing creative control and embracing agile methodologies.

Maintain Your Core Audience

Most legacy brands walk a tightrope between maintaining their core audience and attracting the next generation of consumers. Baby Boomers and the older generations control the majority of wealth and hold key positions in most organizations. On the other hand, Gen-Z is now the largest generation globally, with the fastest-growing income of any generation. This is a tricky conundrum.

Companies need to connect with new audiences to build brand loyalty and lifetime customer value. But changing too quickly could alienate existing customers, especially when the groups have divergent needs and values. Young people want to know where brands stand on the causes …….

Source: https://www.forbes.com/sites/kianbakhtiari/2022/08/08/why-brands-need-to-prepare-for-the-great-wealth-transfer/