Marcela Pérez de Arce (Client Service Director – Quantitative)
The Chilean marketing landscape is being transformed by a generation of consumers more educated and with more purchasing power and higher levels of connectivity than many in other Latin American countries and even some European countries. Chilean millennials and the lives they lead are radically different to those of Chilean consumers 15 years ago, so how are brands maintaining their relevance?
The Chilean challenge
For several years, the marketing world in Chile has been working on ways of facing the effects of going from an offline to an online world. How should they attract and communicate with their consumers when absolutely everything, has changed? Though this is a global phenomenon, our recent history shows certain particularities:
· At the start of the last decade, and into the middle of this one, we lived through a period of economic expansion that increased household income. Between 2010 and 2015 alone, incomes rose more than 25 percent in real terms, which had a significant impact on attitudes towards consumption: people started to look beyond price, to quality and brand.
· During that same period, Chile advanced in negotiations with other economies, which turned us into the country with the most free trade agreements in the world.
- The demand for higher education grew 93 percent between 2005 and 2015.
- The combination of these phenomena fueled high demand for technology in Chile, which has also meant high levels of connectivity and online activity. Chileans rapidly lost their fear of buying online and paying with cards.
Banking and retail developed a credit offer, which also helped promote demand for having products and services immediately, without the need to save in advance.
Thus we saw campaigns like “La Vida es ahora” [Life is Now] or “Hay ciertas cosas que el dinero no puede comprar…” [There are things that money can’t buy] emerge, and the first decade of this millennium became an era of consumption in Chile. That happened in combination with a rise in technology and connectivity.
These factors have been the main elements of change in Chileans’ attitudes towards consumption. As Chile gained a window on the wider world, consumers suddenly had access to a large amount of imported products and quality services at previously unthinkable prices.
The current marketing challenge, therefore, is to face a generation of educated Chileans who have become used to much greater consumption levels than older generations; Chilean millennials are highly connected and very much open to considering new products and services.
And in this new era of growing competition and rising consumer expectations, the power of brands is changing. So, the question of the moment is …
How to be relevant: What do millennials want?
There is no single answer to this question. After all, we are still going through this period of change. But brands should start by considering three key aspects of millennials’ lives and attitudes:
1. Understand their relationship to money. Prices seem to be increasingly more important to consumers in Chile, regardless of whether we are in an economy that has slowed down, is in crisis or is growing. Why? There seems to have been a shift away from saving and towards self-gratification. People want to spend more of their money on what interests them and makes them feel good, and less on life’s basics. They look to save on detergent so they can spend more on mobile telephone services; they’ll use a bicycle to get around the city but spend more on trips abroad. They shop at the Vega Central (the largest produce market in Santiago) where they get the best prices on fruit, vegetables and other products, then splash out at a gourmet café.
2. Understand millennial values. Topics like diversity, authenticity, transparency and the demand for more balanced relationships with institutions, which were mere aspirations in the times of Generation X, are now seen as an inalienable right. Values are linked to a brand’s purpose, and brand purpose is linked to the way consumers define themselves.
3. Understand the profound meaning of the wellness concept. This, defined as a harmonious balance between different aspects of a person’s life, is the new axis around which millennials’ lifestyles are defined. Physical activity levels have risen systematically in Chile. Furthermore, the state has promoted policies oriented to education on eating, including the “black seals” that labels on all foods must have, indicating when they have high levels of sugar, sodium, saturated fats or calories. But it is also evident that increasing numbers of adults under 35 years of age are starting their own businesses, often driven by their personal interests. For example, almost half of the people in this age group in Chile say they intend to venture into business in the next three years. At the end of the day, Chilean millennials are considering these different aspects of life as important aspects of their wellbeing, and their wellbeing has increasingly become one of their core values.
Brands can look ahead to a period of excitement, as they understand and respond to the new ways in which consumers are living. There is no fast, easy way of doing this, but for those that work hard, the reward is clear: we will have more powerful brands, adapted to the millennial gene.