Beyond Miles: Building true loyalty with Gen Z

Transcript

Peter Smith:Good afternoon, everybody. Before I start, I'd like to read a little extract from an article I read last weekend in the Sunday Times back in the UK. It read, we're not just doom-scrolling snowflakes. We're financially savvy, socially conscious, and far more discerning about what we see online than many people assume. You might have already guessed, given the headline behind me, I'm talking about Generation Z. Now, I'm going to make a huge assumption, having spent some time wandering the room and chatting with a number of you amongst us here. that we have probably near zero Gen Z sitting amongst us today. The reason being that Gen Z are those aged between 13 years old and about 29, 30 years old. And this is the most informed, connected, and socially conscious generation we've ever seen. They don't just buy products, they buy into brands that really align with their values. And they are the future of travel. 61% of Gen Z prioritize travel over material possessions and consumer goods. And they represent an absolutely massive opportunity to our industry. In fact, nearly a third of the global population are Gen Z. If we think about this region we're sat in today, there are 169 million people that make up Gen Z. That's about 1 in 4 to 1 in 5 of the population of this entire market. And this generation love to travel. It's projected that by 2030, the additional economic impact of this generation's spending is about £192 billion. billion dollars. And so, of course, you can appreciate the impact of having to really consider this generation in everything that we do. Unfortunately, many people refer to this generation as the anxious generation. It's really sad to hear and to often read that about 50% of this generation experience anxiety every single day. And so it's no surprise, of course, that they have a real desire for trust and safety and peace of mind from the brands that they engage with every single day. Now, in a world of global uncertainty, with ever-growing changes and the impact of everything that's going on around us day in and day out, Gen Z really desperately crave a sense of control. They want to personalise and control their buying experiences. In fact, 75% of this generation much more likely to buy a product that they can customize. But the key word when it comes to engaging this generation, everybody, is trust. It is the essential brand currency with Gen Z. According to the Edelman Trust Barometer, 79% of Gen Z say it's more important than ever ever to really trust the brands that they buy from today. In the same report, 67% said that they value brands that promote safety and security over, surprisingly, adventure and thrill-seeking. And that number's growing year upon year upon year. Now, when you want to engage with this generation, trust is not just marketing blurb or something that we talk about. It's an absolute business imperative. You have to seriously consider how you're going to build trust when you're selling and engaging with this generation. And so what I'm going to share with you now is just a few small examples of how some of the brands out there of building trust with Gen Z. Firstly, Revolut. Revolut are really starting to gain traction in this region. They launched in Brazil in 2023, and they're looking to roll out fully across Mexico by the end of this year. If you look over towards Europe, Revolut is the largest digital bank in Europe. And they've really thought about how they can engage with customers and build trust amongst the people that they're targeting. And so when they look at Gen Z, they think of mobile centricity. If you think about it, you look at anybody that fits within that age range, they're pretty much glued to a device of some sort, as are many of we actually. And so what they really focused on with Gen Z, they tried to understand what's very important to them. And some of those things were financial freedom, security, and flexibility. So what Revolut did is they gave customers instant access to their cash. They gave them flexible plans. So they have everything from daily to weekly, monthly, and annual plans on their card programs. And when it comes to security and protection, they really thought about what's really important to these customers. So they offer within the app and associated with all cards, they offer purchase protection. So when customers make a purchase, they're protected for whatever it is that they've bought. They also provide protection for when the customers travel and pay using that card. And of course, built into the app is device protection. And so their younger travelers, their younger customers, really value the all-in-one centricity of bringing everything together on one single digital platform. And that's how Revolut have helped to sort of build trust and engagement with their customers. Delta, of course, needs no introduction to anybody in this room. Delta, when it comes to trust, have really focused on transparency and proactive open communications with their customers. So when it comes to proactive comms, what they're doing is they're doing push notifications and real-time emails and real-time updates with things like flight status changes, gate changes, Which carousel your bag's on. Many different things, they're doing that in real time. So very proactive comms. When it comes to transparency, they're very open about their policies when, for example, it comes to disruptions. And so one thing that they associate with disruptions is there are free changes, free flight changes in the event of a disruption. Yeah. And they're really transparent on their terms, so customers know exactly what they're getting, especially in their time of need. And when it comes to customer loyalty and customer satisfaction stakes, Delta consistently rates highly, particularly among those younger travelers. Home2Go is a brand that you may or may not have heard of. They are actually the marketplace for the world's largest collection of holiday homes. What they've done to really build trust amongst their customers is they, through research, they understood that 54% of their customers wanted to protect their trip. They wanted the flexibility that in the event that they have to cancel the trip that they've purchased, they have the opportunity to do so with very little hassle. So Home2Go embedded that trip protection directly within the customer's purchase path. They made it very simple and relevant to the core purchase, very easy to make that transaction as part of the entire trip transaction. Furthermore, they went one step further and they embedded a seamless digital-first claims experience. That means when customers need to make a claim, they can do so very easily in-app or online, and they can be paid out in under 3 days. If anybody's ever had to claim on any sort of protection or insurance, you know that that's lightning fast. Yeah. compared to the industry. And so in a customer's time of need, Home2Go are there holding their hand. The impact for Home2Go is that their Net Promoter Score since introducing these changes is higher than it's ever been before. And so that shows that customers really appreciate and value that flexibility and customer-first approach. Finally, Scandinavian Airlines. Scandinavian Airlines have built trust with their customers through embedding tailored, personalized protection. Very relevant again to what the customers are purchasing. And they've seen some really interesting results since doing this. They introduced embedded protection with COVID Genius in May 2023, and the impact has just gone this way ever since, both in terms of revenue per passenger and actually in terms of customer satisfaction also. They've seen really, really positive results. The interesting thing is they don't just offer a one-size-fits-all protection to their customers. They use data points to understand what the customers purchased and then deliver the right products at the right time. Not only have Scandinavian Airlines done this, over the last couple of years they've introduced a whole suite of additional ancillary products available for customers to book. And what they tell us is that they've measured NPS and CSAT with those customers that have taken out ancillaries versus those customers that don't. And surprisingly so, the NPS is higher for customers that take ancillaries than for those that don't. And you might wonder why that is. Anecdotally, the reason they've sort of reached is that they are enriching the customer's trip with relevant products that's going to enhance their entire experience. So again, not adopting a one-size-fits-all, but delivering super relevant products for customers. And I urge everybody in this room, if you're not already doing so, think about doing the same thing. Think about your customers. And what's important to them? What's really going to enhance their end-to-end journey? Now, of course, I could put hundreds of things on the wall here today for you. This is just a snippet of items. We all probably do car rental. No doubt we all do hotels. No doubt we all do travel insurance. They're the core 3 that we've been doing for years and years within this industry. But think outside the box. Every conference and event I go to these days, there are 3 or 4 providers pitching eSIMs to airlines. You've possibly all had a conversation. It seems crazy. We've just seen the first unicorn status eSIM provider in Airalo, which is just phenomenal. It blows my mind. We call them— Unicorn. micro-benefits, very small-ticket items that really add value to a customer's trip. So I guess you might see eSIMs everywhere these days, but perhaps that reflects exactly what consumers are looking for when they travel. But there are other things, experiences, for example. I spoke about Home2Go earlier. One thing that they do also within the booking path is they highlight accommodation that is unique, off the beaten track, and something different. Huge giants like Airbnb do exactly the same thing. So that's really putting on the customer hat and saying, hey, what's important to me? What's really going to excite and interest me when I'm making my travel decisions, my travel purchase decisions? There's one item on the wall that you might find a little bit odd— food. I'm not talking about pizza delivery or onboard catering. What I'm talking about when I say food is— there's a slightly left-field example with Zipair. Zipair, for those of you that don't know them, are owned by Japan Airlines. And what they've done is they found that there was a whole cohort of customers who wanted to purchase premium Wagyu beef as a souvenir to take home. Sounds easy, right? But then consider you're flying into the US and you have animal control to deal with. Consider you've got to go through customs and all of a sudden you have a whole load of meat packaged up in your case. We all know the sort of questions you might get asked. So Zipair make that much easier. They fill out the paperwork, they do the control versions, so that by the time a customer has to go through, Customs? There's no issues. It's all dealt with. If you fly to Singapore, they ship it directly to the luggage belt. So when you collect your luggage, you collect your premium Wagyu beef. Now it's a bit of an odd example, but what I'm getting at there is you should really consider all the little nuanced things that are important to customers. And remember guys, and girls, Gen Z are influencers. They influence the decisions of the people around them that are perhaps slightly older, perhaps some of us folks in the room. In fact, 68% of all consumers said that young people influenced how and where they shop. And I can give a real example of this. My son Sam is Gen Z, he's 13 years old, and for a few years now he's been absolutely obsessed with Japanese culture. And so he went on at me for probably 2 years to take him to Japan. We'd never done that as a family holiday, but I did. I booked a 3-week tour of Japan during the last cherry blossom season, and it was phenomenal trip, one I will never forget. In fact, I've gone and booked another 3 weeks next cherry blossom season. So that's something that was entirely led by Gen Z. He completely has biased where I book, how I book, and where I spend my time and money. And so really listening to what's important to this generation is what you all should should be doing. At Cover Genius, we help people like you build trust amongst your customers by delivering tailored embedded protection directly within the customer purchase path that's very relevant to what your customers want and aligned with their needs and their values. We're doing this with dozens of airlines around the world and every single major online travel agent on the planet. Furthermore, we're working with huge household digital brands to embed protection and warranties on their websites. And I'll finish with this. Please think about the fact that Gen Z are not just another customer segment. They're digital natives who value authenticity, personalization, and purpose. And Gen Z is ready for takeoff. The question is, will they be flying with you? Let's make sure the answer is yes. Thank you very much. Thank you, Peter.

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