Beyond Miles: Building true loyalty with Gen Z

Transcript

Peter Smith:I'm going to talk about the next 15 minutes or so on Gen Z, and I'm going to go out on a little bit of a limb this afternoon and say that there's nobody in this room that sits within the category of being Gen Z. And the reason I say that is is that Gen Z currently are people aged between 13 and 28 years old. So I hope I've not offended anybody in saying that. And Gen Z are the most informed, connected, and socially conscious generation ever. They don't just buy products, but they buy from brands that really align with their values. And they are the future of travel. In fact, 61% of Gen Z prioritize travel over consumer goods and material possessions. And this represents a huge opportunity for airlines in this room. In fact, around a third of the global population are currently Gen Z. Here in Asia, that represents more than 1.2 billion people, and they really do love to travel. So in Asia again, Gen Z take around 3 leisure trips per year, and they spend more than you might imagine. It was interesting listening to Chai from Thai Airways on stage this morning. talk about how they like to spend their money rather than save their money. And I think when you look at the fact that they're spending around $2,500 USD per trip, we can really start to get a feel for the value that this generation can bring to our industry. And consider this, Gen Z are also the influencers of We all know that, right? And so they influence the decisions and the behaviors of their older peers, of people like us in this room, and that makes them even more important. Sadly, many people refer to Gen Z as the anxious generation. It's really difficult to hear, but in a time of global uncertainty, Around 50% of Gen Z experience anxiety every single day. And so I guess it's no great surprise that they have a real desire for trust, for safety, and for peace of mind. And again, in a world of constant change, global uncertainty, it's probably no surprise that they really crave a sense of control. A sense of control when it comes to their buying experiences. They want to be able to control and to personalize their buying experience from companies they trust. In fact, 75% of Gen Z are much more likely to buy a product that they can customize. But the key word when it comes to this generation is trust. We've heard it said quite a number of times on the stage already today. According to the Edelman Trust Barometer, around 79% of Gen Z say it's more important than ever to trust the brands, the brands that they buy from. In the same piece of research, around 67% of Gen Z value brands that promote safety and security over, for example, adventure and thrill-seeking. And that number of 10% increasing year on year will just continue to grow into the future. And so trust can't just be a marketing strategy, something we speak about. It has to be a real tangible part of how we operate our businesses. It's a real business imperative. But how do we build trust? How do we build trust amongst this group of people that we know represents massive value to us? What I'm going to do now is just walk you through a very small selection of examples from brands both within our industry and outside our industry around the world. Grab, Southeast Asia's super app. I wouldn't be surprised if most of you in this room haven't used this app at some point in the last 48 hours. For me, it was the first app I opened on my phone when I arrived in Singapore yesterday. So they've built trust amongst their users by offering security when it comes to ride-hailing. They offer verified drivers with real-time tracking. They offer transparent pricing with no hidden fees. And of course, as you probably know, they've grown their suite of services into shopping, food delivery, financial services, and insurance. And so they've done an excellent job through transparency, security, and protection in turning one-time riders into long-term multi-service users. Delta needs no introduction, of course. Delta have built trust by really prioritizing Transparency, proactive customer communications when it comes to things like delays, flight status, real-time baggage updates. Delta also ensure that they offer customers the opportunity when there's something's gone wrong to change their flight very simply and with no hidden fees whatsoever. And it's this level of transparency, proactive customer comms, and using push notifications and putting everything through the app so that it's easily accessible for customers, particularly Gen Z, that they've been able to really build trust amongst this particular user base. And those customers really value this transparency. In fact, when it comes to the customer loyalty metrics, Delta rank really highly and Also, when it comes to customer satisfaction, particularly among younger travelers, they consistently rank highly. Shopee, again, locally probably needs no introduction. Shopee is the trusted e-commerce giant here in Southeast Asia, and they've built trust through buyer protection, through guarantees, and through offering full visibility on products they sell and on the buyers that they engage with. So they offer product reviews, they offer peer reviews from other customers, they offer hassle-free refunds to customers when they need it most. And Shopee consistently also rank highly in the customer loyalty stakes amongst younger travellers. In fact, 72% of their younger travellers say that they would— sorry, not the youngest travelers, the youngest shoppers say that they would recommend Shopee in the future. And finally, Scandinavian Airlines. SAS have built trust through working with COVID Genius to provide personalized embedded protection put right into the customer booking path and tailored to the core trip that a customer books with SAS. And in doing so, they've seen some really excellent results. When they integrated with COVID Genius in May 2023, you can see that since then, by really understanding customers using data points to deliver the right product, the right price— you all heard it— at the right time, they've seen their revenue per passenger increase significantly, significantly. since then. Interestingly, they also saw NPS, Net Promoter Score, go up and overall customer satisfaction increase. But SAS did something else over the last couple of years. They increased their entire suite of ancillaries. And in doing so, interestingly, contrary to belief of many airlines actually, they've seen a higher Net Promoter Score from customers who take out multiple ancillary products than for those that don't. And anecdotally, the reason they give for this is that by really trying to deeply understand their customers on an individual basis and deliver personalized relevant products, they're actually enriching the entire customer trip. And this is why they see a higher NPS for those customers. And I urge you guys to think about how you can also do something similar to what SAS have done. You know, we all— most airlines in this room will sell the big 3, the traditional hotels, car rental, insurance. But if you're not already doing so, go beyond that. Think beyond the big 3. What else can you be doing to really enrich a customer's end-to-end journey. I'm not going to walk through these individually. There's just a small selection on the wall here. I always laugh when I see eSIM. I'm very surprised, unless I've missed them, there are no eSIM providers in the hallway today because you go to any event these days and you'll find at least 10 of them. I was at Aviation Festival last week. They're everywhere. That's a little bit wild. We didn't see that a few months ago, a few years ago. But what that does represent is there is clearly a customer desire for this product. And when sold correctly to customers or embedded within fare bundles, for example, the customer's experience is actually enhanced because they're getting something that helps them whilst they're traveling. Then we have novel ideas like food. I'm not talking onboard catering here. Of course everybody does that. What I'm talking about here is something which Zipair, owned by Japan Airlines, you probably all know them, they do something where they offer wagyu beef as a souvenir for their customers. But if any of you ever tried to take meat products or anything similar cross-border, particularly into places like the US, you're going to have a lot of hassle to put up with. The same in Australia, for example. So what Zipair do is they complete all the forms, all the regulations on behalf of the customer so that they can easily take these products through. Here in Singapore, they actually deliver the wagyu beef directly to the luggage belt. So you collect your luggage and you collect your new little souvenir and off you go without any hassle. So The idea here is just think about things that can enhance the customer's trip. Talk to your customers, understand what they might like or need, and then off the back of that, of course, not only do you help to build loyalty, but you're building revenue at the same time. And remember I said it earlier on, Gen Z are also influencers. In fact, 68% of all consumers said that students and teenagers had influenced how and where they shop, where they spend their money. This is very true. I bet you everybody in this room could give an example. I can give one. My son Sam has just turned 14, so he's very much in the Gen Z category. For a number of years, maybe 2 or 3 years, He's gone on and on and on at me to take him to Japan. He has this wild curiosity about Japan, and it's somewhere I'd been before with work but never considered doing as a holiday, a vacation. And so I said, you go away, Sam, you do the research, you bring it all to me. And we went on a 3-week trip during cherry blossom season last year. Cost me a lot of money, but it was an incredible trip. And that would not have happened had it not been for my son. So he was helping to dictate where I spent my money, who I flew with, what I did with my time. And I bet you everybody can give a similar story. And so Gen Z really are very important for us to consider in terms of our strategies within our businesses. Cover Genius helps to build trust among airlines by offering personalized embedded protection, and we're doing this with dozens of airlines around the world, including every major OTA on the planet. Not only that, outside of travel, we work with global leading digital brands, some of them being household name brands. And so on that, I'm going to leave you with this. Please think about the fact that Gen Z are not just another customer segment. They are digital natives who value authenticity, personalization, and purpose. And Gen Z are ready to take off. The question is, will they be flying with you? Let's make sure the answer is yes. Thank you. Thank you, Peter.

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