Interpreting the "Digital Native Generation Consumption & Values Survey '21" ~ How the Pandemic Changed the Digital Native Generation's Purchasing Behavior ~ (Part 2)

• Interpreting the "Digital Native Generation Consumption and Values Survey '21" ~ How the Pandemic Changed the Digital Native Generation's Purchasing Behavior ~ (Part 1)

YNGpot™️, a team within Dentsu Digital Inc. specializing in the digital native generation, conducted the "Digital Native Generation Consumption and Values Survey '21 " to analyze how the pandemic has changed the attitudes and behaviors of the digital native generation and to explore the next standard. In Part 1, YNGpot™ members Yuta Matsuzaki and Akane Abe discuss the survey's objectives and the consumption trends among the digital native generation revealed by the results. In the upcoming Part 2, they will provide a detailed explanation of the flow leading up to purchases by the digital native generation and their criteria for making purchasing decisions. They will also delve into what physical stores should be like now, at a time when online consumption is booming.

The Three Purchase Phases in the Digital Native Generation's "Self-Expression Consumption"

Q.As Ms. Abe mentioned in the first part, this survey revealed the purchasing behavior patterns of the digital native generation.The press release article also refers to the "Three Purchasing Phases in the 'Self-Expression Consumption' of the Digital Native Generation." Could you elaborate on this again?

Matsuzaki: We named the behavior unique to the digital native generation, where they seek to express their individuality even in consumption, "self-expression consumption." We divided this consumption behavior into three distinct phases: the "Daily Phase," the "Product Consideration Phase," and the "Purchase Decision Phase," clarifying the characteristics of each.

Regarding this "three-phase" approach, it differs slightly from the typical funnel or customer journey models. The customer journey approach often involves sequential steps like "learning about a product/service, developing interest, and then purchasing."However, observing the consumption behavior of the digital native generation reveals a pattern where they routinely gather information on social media, check reviews of products seen in stores on social media, and generally move in a cyclical manner across various stages rather than following a hierarchical path. Therefore, we adopted the "three phases" framework for this analysis. Let me briefly explain each phase.

Daily Phase

Digital natives are constantly browsing social media, essentially "killing time" while looking for "anything interesting." If they find something appealing, they save it using social media's save function or take a screenshot. A key characteristic is that they store this information digitally, not just in their minds. Can you sense the nuanced difference from the traditional customer journey?It's less about progressing step-by-step—"first recognizing a product's existence, gradually becoming interested, then researching it in detail..."—and more like "while casually gathering daily information, if something catches my eye, I'll just take a screenshot and keep it handy." They might forget about it the next day, but then, while randomly looking through their screenshots, it might jump out at them and spark a memory.

Product Consideration Phase

We live in an age of information overload. When someone decides to buy a specific product, it's practically impossible to research every single product in that category. Similarly, even if they decide to "check reviews," the sheer volume of online reviews makes it impossible to review them all. Moreover, digital natives know that some reviews might contain stealth marketing.You must select credible information and gather it efficiently. Even when searching for a restaurant, there are numerous gourmet information sites alone. Beyond food services, you can also find information by directly typing a restaurant name into a map service. In other words, during this "product consideration" phase, to efficiently gather information from the vast amount available, you need to start your evaluation from information that has already been somewhat filtered beforehand.

One method for this narrowing down is using "stock information" saved during the "Daily Phase" – things like social media saves or screenshots. You pull information from what you've stockpiled and choose from that. Another approach is selecting from "information already curated by someone else."This could be curated lists like "People like this are buying ◯◯," popularity rankings provided by apps, or information from social media communities. Digital platforms offer abundant curated information from various angles, and consumers frequently leverage these resources.

Whether you "select from information you've routinely stockpiled" or "choose from curated information somewhere," it's no exaggeration to say that if your product isn't included in these "narrowed-down selections," it won't be considered for purchase.

Purchase Decision Phase

At the final decision-making stage, we focused on the "five filters" particularly evident among the digital native generation. While universal criteria like "cheap," "convenient," or "cool" certainly still exist, we also identified points specific to this generation. These are the five filters.

1. Whether it has a grand vision or purpose
2. Whether it contributes to society, such as through SDGs or social impact
3. Whether they feel the product is "easy to use for our generation" – meaning empathy and a sense of belonging from knowing the company genuinely considers their needs
4. Authentic buyer testimonials like "So many people say it's great!"
5. Resale value – whether it can be sold for a good price on the secondhand market when no longer needed

Of course, the level of importance varies within each generation, but we found that when making a purchase decision, they make multifaceted judgments while also prioritizing these five points. Particularly among the digital native generation, there seems to be a desire to express their own empathy and belonging to the vision or social contribution community by choosing brands or products that have "1. A grand vision" or "2. Contribute to society."

Q. It's interesting that you frame it in "three phases" rather than a customer journey.

Abe: This isn't meant to dismiss the customer journey. For instance, when the main target is clearly defined, thoroughly tracking that target's journey is effective. However, when targeting the digital native generation, I believe there will be increasing cases where reaching multiple communities is necessary to acquire a large number of customers.

Targeting something like "the entire digital native generation" is likely meaningless. What becomes crucial is "how effectively can we infiltrate specific communities within the digital native generation?" Mapping the journey for every single community is quite difficult. Furthermore, unless we integrate into their "daily information gathering," we won't even be considered an option. Therefore, we believe it's vital to observe whether information is effectively spreading within the daily phases of each community.

Furthermore, new consumption behaviors are emerging among digital natives, such as the "pulse consumption" model proposed by Google (where users impulsively decide to buy something, find the product, and complete the purchase within the 24/7 smartphone interaction cycle) and the style of seeing content on social media and immediately jumping to e-commerce to buy.Consequently, the traditional customer journey from "awareness to purchase" doesn't always apply. "Buying the moment you see it" occurs, sometimes ending the journey instantly. Of course, cases where consumers "become aware, research, and think carefully" still exist. However, with purchasing styles diversifying like this, it's becoming difficult to fully capture the buying behavior of the digital native generation using the conventional customer journey.

Therefore, I believe it's crucial to consider the process leading to purchase divided into "three phases" and to understand the "five filters" that serve as the basis for purchase decisions.

The Five Filters Influencing Digital Natives' Purchase Decisions

Q. Regarding the "five filters" you mentioned earlier that influence purchase decisions, is there one that stands out as particularly important or has the greatest impact?

Matsuzaki: The fundamental premise is not that "one of the five is particularly important," but rather that "which element is most effective depends on the specific product or service and the phase of the purchasing process."

For example, "4. Authentic buyer reviews" is now a crucial factor not just for digital natives, but for all generations. And when buying high-priced items, "5. Resale value" becomes particularly important.People often check flea market apps first, questioning whether they even need to buy new. If they see the item sold cheaply in bulk, they might conclude, "This must have little value." Conversely, if it's sold at a high price, even if they later regret buying it or stop using it, they think, "I can just sell it quickly," which encourages hesitant buyers to take the plunge.

As mentioned earlier, the two factors "1. Grand Vision or Purpose" and "2. Social Contribution" remain extremely important. The SDGs target 2030. For the digital native generation, this coincides precisely with their time at the center of society. Since SDGs are frequently discussed in educational settings, they likely feel like a more immediate concern. Facing the societal challenge of the COVID-19 pandemic also served as a catalyst for feeling society more tangibly.

Regarding these filters, it's crucial to note that while ethical purchasing driven by positive values like "I buy this brand because it contributes to society" is important, negative information—such as "this product harms society" or "this company's practices are problematic"—can become a decisive factor. Upon encountering such negative information, consumers who were previously loyal may stop purchasing, or a brand may be excluded from consideration altogether at the initial stage.For this generation, purchasing a product is often tied to supporting it or expressing themselves. Therefore, if a product has negative sentiment attached to it, it is immediately excluded from consideration, and consumers may lose interest in even researching it further. In an era where all information remains digitally, once this happens, recovery is truly difficult.

What does "real" mean to the digital native generation?

Q. For the digital native generation, who take it for granted that they can buy anything online, how do physical stores appear?

Matsuzaki: It's true that most information can now be gathered online, and we live in an environment where you can buy something immediately on impulse. That said, digital shopping has its weaknesses too, like "not being able to touch the actual product" or "not being able to compare it with other products." Even if everyone online says it's a good product, people still want to see and verify the real thing for themselves.This need definitely exists. Therefore, I believe that if we focus on creating an environment that fulfills the desire to "verify for yourself whether it's really as good as it seems online," even after gathering information online first, it could significantly enhance marketing effectiveness.

Abe: Another value of physical stores is undoubtedly serendipity.When you join communities you like on social media and follow people you admire, the information you receive becomes increasingly optimized around your preferences. This naturally makes it harder to encounter other kinds of information. However, platforms like TikTok incorporate randomness into their algorithms. Their "For You" page feeds content beyond your usual interests. For digital natives, TikTok is popular precisely because it lets them "discover things they didn't know existed."

In this way, as digital service providers deliberately introduce serendipity to counteract the optimization happening online, I believe the unique serendipity offered by physical stores is incredibly important.

Matsuzaki:In the first part, we discussed how digital natives often have multiple accounts. This is also a countermeasure young people have developed against the negative aspects created by digital optimization.For example, if you only follow your favorite celebrities' social media, your feed gets flooded with posts from similar celebrities, burying your friends' posts and making them hard to keep up with. So, they separate accounts: one for "celebrity posts" and another for "interacting with close friends." Many also create dedicated accounts for job hunting. This way, having multiple accounts is a know-how for continuously gathering the information they need.

This is how the digital native generation possesses the power to create and spread new ways of using and enjoying products and services that were not originally anticipated. While constantly viewing various information on social media, where content flows by rapidly, the habit of saving important information via screenshots naturally emerged. In response, social media platforms began adding save and history functions.The example mentioned earlier fits this pattern perfectly. That's precisely why, when considering "the standards of the future," I believe it's crucial to closely observe the behaviors of the digital native generation.

The ability to gather information anytime, anywhere, on a device at your fingertips has become the standard. Consequently, the flow from information gathering to purchase decisions among the digital native generation is likely very different from that of older generations. For example, "being saved means becoming a candidate" is one typical pattern. Conversely, this also means "information needs to be shared in a way that makes it worth saving." Reviewing your company's marketing from this perspective could reveal the next strategic move.

Another key point to note is how the digital native generation connects with various communities by switching between multiple accounts. When viewing the target as a "community," this perspective might lead to information design and communication methods that make it easier to integrate into that community.

Simultaneously, the act of purchasing itself has become a means of community participation. What kind of community are your products or services actually building? Rather than thinking "selling things," considering "building a community centered around things" might reveal areas for improvement in product design itself. Why not take a fresh look at your business from the perspective of the digital native generation?

To learn about trending terms like "FOMO / JOMO," please also refer to this resource.