Pester Power 2.0 Ignore it at your peril

Why it is madness to ignore Pester Power, the Teen Economy, and the voice of the Passive Consumer?

I had a very interesting conversation with a senior Marketing person from a substantial casual dining brand last week.

We met at the Casual Dining Show and I asked them, “Are you investing or look at a marketing strategy to engage with Gen Z at present?”

I was slightly surprised with the response I received, bearing in mind that the operator is very much a family brand that caters for kids and parents all year around; “No, we are not focusing on them yet, not on our radar”.

It got me thinking about investment, priorities and the current focus on “keeping and improving what you have”. When is the right time to invest in the future and the next generation of consumer?

What is at stake and what is the size of the opportunity and why should you invest in a strategy specifically focused on Gen Z and future generations?

The Size of the Cake

In effect there are two markets to focus on:

1.     Active Teen Consumers: 13-19-year olds that have their own money (whether given to them by parents, pocket money, part time jobs or savings accrued over time)

2.     Passive Consumers: 5 – 13-year olds that consume through their parents but apply significant influence on household spend.

Both groups rely on parental funding to a point with active teens having more freedom over how the money is directly spent as they grow older.

How big are the Active Teen and Passive Consumer Markets?

As collecting data on the purchasing behaviour of children has obvious sensitivities, sizing both markets is quite tricky:

1.     Active Teen Market – A study completed by Child Wise Monitor in 2018 valued the UK segment at ￡7,985 Million per annum 

2.     Passive Consumers – This is more complex, as it is impossible to record, track or apportion household spend direct to a child’s influence specifically through till receipts or confirmed spending but we can see what is being spent in households have been spending on average and indentify the key areas that children will have substantial input:

Average Household UK Spend FYE 2018 - ￡572.60 (ONS 2018)

Essentials – In the main, not open to child input or influence:

Health: ￡6.90 per week (1.2%)

Education: ￡8.70 per week (1.5%)

Alcoholic drink, tobacco and narcotics: ￡12.40 per week (2.2%)

Transport: ￡80.80 per week (14.1%)

Housing(net), fuel and power: ￡76.10 per week (13.3%)

 Total: ￡184.90 (32.3%)

The 50/50s – Includes holidays, mobile or tech purchases, Media Streaming Subscriptions

Household goods and services: ￡40.70 per week (7.1%)

Miscellaneous goods and services: ￡43.50 per week (7.6%)

Other expenditure items: ￡76.40 per week (13.3%)

Communication: ￡17.90 per week (3.1%)

Total: ￡178.50 (31.1%)

The Pester Sweet Spot– The areas where children will have the most influence on household spend:

Clothing and footwear: ￡24.30 per week (4.3%)

Restaurants and hotels: ￡49.60 per week (8.7%)

Food and non-alcoholic drinks: ￡60.60 per week (10.6%)

Recreation and culture: ￡74.60 per week (13%)

Total: ￡209.10 (36.6%)

Source ONS: Family Spending, 2018

I appreciate that the numbers set out above are not an accurate science and gathering data in a rather opaque scenario is almost impossible, but I believe they illustrate the impact of the growing and substantial influence that children have on purchasing power within the home. Ignore Pester Power at your peril.

Pester Power 2.0

In an ever-changing world, lived at break neck speed and with more demands put on the working parent than ever before, it is not difficult to understand the reasons behind the growing influence of children on household spend across the country.

Long working hours, clubs, housework, cooking, technology all have had an impact on our lives and more importantly, time. Many any working parents “feel” that family time is neglected as consequence of busy lives and understandably, over compensate.

However, this isn't entirely the case and other dynamics are in play when it comes to time spent with the family.

Researchers from Oxford and Warwick Universities conducted the first study of the impact of digital mobile devices on different aspects of family time in the UK.

It found that children are spending more time at home with their parents rather than less -- but not in shared activities such as watching tv and eating. The increase is in what is called 'alone-together' time, when children are at home with their parents but say they are alone.

Alone-together time has increased by nearly 30 minutes a day between 2000 and 2015, a period which saw the rapid diffusion of high-quality home internet and personal mobile devices such as smartphones and tablets.

While mobile devices were always used families were together in 2015, their use was particularly concentrated during alone-together time.

However, the study also found no evidence that device use had displaced traditional shared activities like family meals and watching television. (although I would dispute this somewhat as the growth of YouTube and Netflix have fundamentally changed the way children consume video and “television”) Despite widespread concerns about the influence of mobile device use on family life, the amount of time UK families with children between 8 and 16 spend on shared activities remained largely unchanged at around 90 minutes per day.

The disconnect and perception of family time is different for both the child and the parent, leaving the parent feeling they are another 30 mins worse off, if you factor in “alone-time”. The same is not true for the child, as they are spending time with friends over social media, so home time means something completely different to them.

Perception is however reality and if parents are feeling like they are not giving enough of themselves or their time to their children, overcompensation will continue ad infinitum.

Parents are increasingly yielding to Pester Power...and some!

If you want to see Pester Power at its most fearsome, there is no better time to observe it than during the Festive Season.

Research from the Money Advice Service in 2018 (over 1000 UK parents with kids from 5 until 18) reveals that 45% of parents say their children are more likely to pester them for money or to buy them things in the lead up to Christmas.

No great surprise but dig a little deeper and the scale of the impact becomes more evident:

A third of parents (33%) say pester power regularly gets the better of them, and worryingly, a third (33%) report that giving in to pester power has caused them to over-stretch their finances, meaning they’ve been overdrawn or taken on new lines of credit to pay for the extra expense.

As our lives continue to quicken, this behavioural shift in the house hold dynamic is no longer one that can be ignored.

So, What’s the answer?

There is no silver bullet when it comes to tapping into the Pester Power dynamic but the very first step is acknowledging that it exists and then deciding on a strategy that looks to harness it.

I have spoken with many brands that are aware of generational shifts, understand that times and consumers change but do very little to nurture the new kid on the block.

I was surprised when one Operator, who runs a cool, young fast casual dining brand, said that he believed his brand would “always be a millennial brand and our customers will grow up with us”.

As much as I understand brand positioning, target demographics and not being able to cater for all, it seems somewhat limiting to define yourself by the generation or period that your brand was launched. What would have happened to Wagamama, McDonalds and Nike if they had not moved with the times?

Why would you not have a steely focus on where the new money is coming from? Why would you not evolve your brand to encompass new tastes, behaviours and consumer needs? One could argue that one contributing factor to the current turbulence in the UK casual dining sector is a lack of focus on the changing behaviours and needs of future generations. (alongside business rate, rents, the apprenticeship levy, food price inflation and uneven tax regime with online retailers)

The power of brands on a child mind

Various studies conducted over the last few years have concluded that brands resonate with children at as young as 3! Yes 3.

They understand McDonalds, Burger King, Coke and Lego at a glance and can even put forward opinions on why they think McDonalds is better than Burger King for example.

In a market economy, we are hard wired to recognise company logos in the media and as free market consumers, we have freedom of choice and will inevitably, choose the brands we recognise.

Research also suggests that these brand loyalties are carried with us into adolescence and adulthood, so building a loyal and solid brand relationship, starts at a very young age indeed. Influence the kid, influence the adult!

A commited, vested and strategic approach – The answers are out there, you just need to want to look for them.

So, this kind of takes me back to the start of the piece and my chat with the Marketing Director.

Any brand, that operates in the Family/Young Adult or Teen space, that is ignoring the influence of Pester Power and the Teen economy are charting a very uncertain course.

Brands need to understand fully the dynamics of family spending and decision making, looking at how they reach out to the various cohorts in the family unit.

This goes beyond advertsing, branding and sponsorship

Generation Z are the first truly digital natives and have never known a world without the internet.

They are Infovors and Information Gatherers, they are informed and aware of the issues that are going on around them. They have a strong sense of equality and moral compass and care about right and wrong, whether that be from the perspective of staff treatment or the sustainability of your supply chain.

Gen Z can smell a marketing gimmick a mile off and will abandon brands that do not live up to their own idles and motivations.

It's about how a brand behaves and resonates now, as much as what they sell or produce. Nike’s support of Colin Kaepernick is testament to the power of doing the right thing, with sales rising sharply in support of his “taking a knee” stance.

Advertising to children will continue to be under intense scrutiny and rightly so and it is how a brand looks to understand the behaviour of young consumers and the world they see, or would like to see, that will be the difference between win and losing.

Credit Nike Inc

Creating the brands of the future or evolving the brands of the present

Creating environments, products and services that resonate with young consumers is now a must and you can no longer build a brand through advertising and a "our products look cool" approach.

Establishing the reason why you are in a young person's life, be it a 3 year old or a 13 year old is key, whilst also building a narrative with parents that says "this is brand is safe, healthy and reflects the values I would like my child to hold as they grow up".

It's not what you do but how and why you do it that counts and waiting for children to reach 18 to make your case is simply too late.

So, I guess, the litmus test is when 8-year-old Jonny (it’s always Jonny) is asked, “Where shall we go for food after the cinema? and the reply is “I would love to go to “INSERT YOUR BRAND HERE”.

Mum wins, she is seen as doing something “cool” and spending time with her family. Jonny wins because, in his eyes, he is eating at the brand that he saw in an advert, on a tablet or read about its amazing work fight world poverty on social media, and he thinks is cool too.

Those brands that reach out and try to understand what the next generation of consumer wants and start to build their loyalty from an early stage will always win. Not just today but for years to come. If they have good moral credentials, a strong sense of equality and talk directly to young people in their langauge, they are onto a winner.

We talk about many of these points and a lot more in the new ZED on Eating and Going Out 2019 Report, which is now on sale. Please drop me a mail [email protected] or fill in our contact form at www.thinkzed.co.uk and we will be in touch.