Are brands prepared for a consumer base that’s simultaneously more confident and more cautious?
Agility requires not just reacting to current consumer behavior but anticipating the shifts to come. It also requires a deep understanding of the nuances within different consumer segments, particularly as generational behaviors diverge.
Today, we’re going to talk about the evolving landscape of consumer confidence, especially among Gen Z and Millennials, and what this means for brands navigating the current market. To help me discuss this topic, I’d like to welcome, Eric Miao, Chief Strategy Officer at Attentive.
About Eric Miao
Eric Miao on LinkedIn: https://www.linkedin.com/in/eric-miao-62313b9/
Resources
Attentive: https://www.attentive.com
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Transcript
Greg Kihlstrom (00:00)
Are brands prepared for a consumer base that’s simultaneously more confident and more cautious? Agility requires not just reacting to current consumer behavior, but anticipating the shifts to come. It also requires a deep understanding of the nuances within different consumer segments, particularly as generational behaviors diverge. Today, we’re going to talk about the evolving landscape of consumer confidence, especially among Gen Z and millennials, and what this means for brands navigating the current market.
To help me discuss this topic, I’d like to welcome Eric Miao, Chief Strategy Officer at Attentive. Eric, welcome to the show.
Eric Miao (00:37)
Great to be here. Thank you, Greg.
Greg Kihlstrom (00:38)
Yeah, looking forward to talking about this with you. Before we dive in though, why don’t we start with you giving a little background on yourself and your role at attentive? Sure.
Eric Miao (00:47)
So I’ve been at a tentative for almost 10 years now. I got into the mobile advertising space right out of school. So worked at a couple of startups there. One of those got bought by Twitter. So we helped build the mobile ads business there, left that to start a tentative. And personally, so I built our client facing team. our customer success organization, which is around 400 people. And then more recently I have run a lot of our sort of product, vision, AI related efforts. So trying to understand how do you get more personalized with some of the new tools that exist.
Greg Kihlstrom (01:24)
Great,
great. Love it. Well, yeah, let’s let’s dive in. And we’re to talk about a few things today. But I want to start with what I touched on at the top of the show, just, you know, understanding this shifting consumer mindset. so attentive did a recent consumer pulse survey, which showed an uptick in confidence, particularly among Gen Z and millennials. What would you say is driving this increased confidence despite lingering economic uncertainty?
Eric Miao (01:52)
Yeah, so I mean, just as a little background, so a ten of mobile marketing company, one of the things we try and do for our customers is tell them what is happening with their customers. And so we’ve been doing these consumer research surveys for for a while. I think what we see and this is starting to come out in some of the earnings statements that the banks are putting out now is businesses started worrying about tariffs almost as soon as the election started and then consumers started worrying about tariffs once Liberation Day came. And I think we started to see a pullback and that flowed through, I think to everything. More recently, I think what we’ve started to see is people generally, you can only be cautious for so long. I think people only put their lives on hold for so long. And so you’re starting to see, I think the consumer, everyone across the age spectrum
basically thinking, okay, this probably is not gonna happen in the worst case scenario. And so while people are still pretty cautious, you’re starting to see them kind of open back up and just say, I’m gonna buy the things that I’ve been waiting for. Like I’ve waited three months, I’ve waited four months. At the younger end of the consumer, I think you’re starting to still see that there is maybe less spending potential and so that’s that’s sort of coming across in a couple of different ways. But you just seeing consumers lose the patience to wait because they’re they’ve been putting this stuff on hold for quite a long time now.
Greg Kihlstrom (03:29)
Yeah. Yeah. For those that still are, you know, having that wait and see mentality though, cause there are, there are some that I think to your point, there’s a lot that have just, we got to move on with our lives and we’ve got, you know, we’ve got budgets, we’ve got needs, whatever the case may be. Um, but you know, for those that are still kind of it with that wait and see mentality, you know, what should brands do about that to drive some more immediate revenue?
Eric Miao (03:56)
Yeah, I think what we’re seeing is that the new technology is allowing brands to start personalizing the experience, like almost from the second that they see someone even begin interacting with them, let alone actually, you know, signing up to get messaging from them. And so a lot of the discounting that brands have done traditionally is because they haven’t really known what someone might be interested in. And so they’re looking for a hook to try and get in front of that person. What I think we’re starting to see is that these tools, certainly people still want a discount and know, think brands generally are still trying to entice folks with promotions, but you do not necessarily need to rely on that as much as you have historically because you can start to ask people kind of what they’re interested in or even if you don’t want to ask them
people are going to your site and they’re expressing these preferences. So I might go to a site, you know, look at five black t-shirts. They don’t necessarily have to guess, you know, what, what am I interested in? so they, once they can start trying to figure out, you know, what is interesting to me about the object, that’s where they can start to personalize. And so what we’re starting to see a little bit again at the sort of like demographic level is, you know, millennial customer might be a little bit more interested in learning more about a product. think that a Gen Z customer might be a little bit more interested in quicker sort of like hits of information, but the personalization on both sort of groups is working very effectively to try and balance getting the sales, you know, relatively quickly and trying to drive repeat sales without necessarily relying so heavily on promotion.
Greg Kihlstrom (05:46)
Yeah, yeah. And so you you just touched on that there are some nuances then between the generations, you know, word for this episode, we’re focused more specifically on Gen Z and millennials. So, you know, you mentioned some some differences there. Could you maybe elaborate a little bit more on that and what what the data is showing and their behaviors?
Eric Miao (06:08)
Yeah, I think what we’re seeing, at least in the surveys, is that Gen Z has maybe more of a need to trade down and maybe more of a desire to keep shopping. And so those two things sort of take the form of getting a continual kind of cadence of purchases, but at a lower price point and so they’re sort of waiting for discounts when they can, but they don’t necessarily have the patience or desire to wait as much. They maybe have a little bit less loyalty to waiting for, you know, brand A when brand V is going to offer them something. I think what we’re seeing again in Millennial is a bit different, which is they actually can have the patience and the sort of like, you know, wherewithal to afford what they want, but they will wait. And so they have a little bit more loyalty to the brand that they’re interested in, but they’re sort of looking at the calendar and they’re like, okay, prime day is coming up, right? I’ll just wait the extra couple of days to go and see, this gonna hit on a sale? And I think that has been a little bit of a divergence in terms of thinking how those two groups are shopping right now.
Greg Kihlstrom (07:23)
Yeah, yeah. And, you know, both of those groups, though, are, you know, they’re digital natives. So, you know, certainly on digital channels a lot, but their preferred communication channels and engagement styles are different. Could you talk a little bit about that and, you know, just how brands might use, for instance, like mobile messaging to effectively reach each group?
Eric Miao (07:47)
Yeah, so I think what we’ve found is that in asking people sort of what they’re interested in, the people who live almost completely online, they are accustomed to giving that kind of feedback. They may not be willing to have a full, you know, full on conversation that takes five minutes with you, but they’re definitely interested in being asked something, giving some kind of feedback. And so what I think we’re seeing brands lean on and this is happening upstream from Attentive as well, but you’re seeing more quizzes, you’re seeing more interactivity on the site. Obviously, a lot of that comes from social, where people are used to swiping around and clicking on stuff. But then in the messaging layer, what we’re finding is that getting the feedback from a younger consumer might give you the data you need to make other channels work better for them. So whereas someone who might be a bit older, more accustomed to like they sign up for a few email programs, they get the emails they want, etc. These folks are probably paying much less attention to that. And so for you to use messaging to make the other channels work harder is something that we’re actually seeing the potential with these younger groups.
Greg Kihlstrom (09:00)
You know, you mentioned Amazon Prime Day, ⁓ you know, which just passed a few weeks ago as of recording this. ⁓ Certainly things like that, events like that are a barometer for, you know, spending and, just much like traditional holiday season and things like that. This year’s reports indicate perhaps a more cautious approach to big ticket purchases. What are some of the long term implications of the shift for brands both on and off Amazon?
Eric Miao (09:29)
Yeah, we started seeing this with tariffs probably back in February where basically two sizes of ticket item really changed dramatically. One was low ticket items, so things under $50 where I think you saw people just get hit immediately and pull back immediately on those kinds of essentials. And then actually items that are over like four or $500. And so
That happened very quickly. It’s very lumpy though. And so ⁓ you saw people who were looking at furnishing their house, see the tariffs and think, I should spend $20,000 like right now because I don’t want to have to pay more later. And so you saw all kinds of pull forward. You also saw people wait where they didn’t know as a brand if it takes me 10 weeks to get something from my factory.
I don’t even know how much I should sell it for right now. And so I think though the bigger ticket items have been very hard to measure. think what we saw with Amazon with Prime Day is I don’t believe yet, I could be wrong about this, but I don’t believe that they released their totals for total items. And so I saw the same numbers that you’d seen, which is the first day was lower. Obviously they stretched it out. it’s not very easy to see like what happened over four days versus two looking at a day by day. But I don’t know that we’ve seen yet ⁓ what the actual numbers have been. And so I think that maybe what Amazon is signaling and then I don’t know is that the consumer is very, very cautious right now. ⁓ And so even Amazon who has the best hold on their customer is finding that they need to have more time to get it right.
to do their targeting, to get the right sort of product in front of people. And even them, it’s hard. So I mean, it must be hard for everybody.
Greg Kihlstrom (11:26)
Yeah, well, and along those lines, know, how do you you know, how do brands leverage data and AI to personalize offers and promotions most effectively? Like what’s what’s your recommendations there?
Eric Miao (11:39)
Yeah, so what we generally try and sort of have as the North Star, and I think brands have always wanted this as the North Star, but it’s not been possible is there’s there’s no such thing as like a user journey. And it’s the same for everybody, right? When I shop with a brand, it’s different than you and we should we’re different people were different points in our our behavior with them, like we should obviously all go on slightly edited unique journeys, which literally wasn’t possible until the recent changes with machine learning in terms of decision making and then sort of generative AI in the payload of like, what’s the actual message I’m going to get? What we have basically found is that brands are thrilled to start using tools that help them move away from one strategy for everybody. And that could be, you know, not a pejorative, but like, if I’m going to make a segment of, you know, people who I’m going to message.
A lot of the times that people make that segment is, this is what I’ve done in the past. I’ve been doing this for five years, 10 years. Now you can say, okay, actually, Greg is at this point, he might not look as interested, but that’s because he’s very new to me. I should be treating him, I should be trying to nurture him. Eric looks really great. Maybe I should lay off of him. Maybe I’m like messaging him too much because he’s been good for me historically and start to predict how to actually nurture someone. And we’re seeing that happen across the entire funnel of a consumer’s engagement with a brand. So that is when they’re on the site, how the brand gets messaging in front of them. That’s in every message, every text, every email, every push notification after they’ve actually signed up. I think brands are very quickly sort of trying to get away from making one big sort of decision and applying it to a million people and trying to get to a million different decisions. I think there’s obviously going to be a cost effectiveness that brands are going to try and not over personalize. It might not be worth it past a certain point, but I’ve never seen brand adoption of products as sort of great and quick as I’ve seen them adopt the new kinds of products that are entering the market now.
Greg Kihlstrom (13:56)
Yeah, yeah. And I and you would say that’s at least in part because of the level of personalization and tailoring is that is that
Eric Miao (14:05)
100%. Yeah, because it’s what brands have wanted to do for 10 years. But you know, the past version of these tools was me as the marketer, I go in, I run an A B test, I see what wins, I make that the new normal, then I run another test. That’s not personalization, right? That’s that’s just raising the lowest common denominator that’s raising the floor. I think the new tools really change that completely.
Greg Kihlstrom (14:31)
Yeah, yeah. What other, ⁓ you know, maybe even going back to the survey, you know, what other trends are you observing in the consumer landscape that brands should be paying attention to?
Eric Miao (14:44)
Yeah, I mean, the big one is obviously chat GPT. I think they just said yesterday that they’re at two and a half billion queries a day, which is I think Google. No one knows Google’s number, but I think people generally think it’s like 15 or 16 billion. So it’s 15 % of Google right now, which is obviously incredible. But that kind of conversational interface is quickly normalizing conversational interface for lots of other applications. know, Attentive as an example, we bought a company four years ago that did conversational messaging. We introduced it, people like it. It’s cool. On the consumer side, it’s still an educational process to make them actually excited and interested in replying back to a text. Even though they reply to texts all day, they send hundreds of texts a day to their friends and family, when a brand messages them, there’s still not this obvious, like, of course I should reply to the message. But I think that chat GPT is changing that quickly, where people are starting to think it’s more natural that you can do that and get something good back, because it’s obviously such a great consumer product. And so one of the things that’s changing for messaging is that there’s a new standard that’s coming out. It’s called RCS. If you’ve ever been the, you know, have a person on the Android phone who ruins your family group text, RCS is the thing that will sort of like make everyone happy again, but as a messaging standard, it’s much richer. So there’s image carousels, there’s suggested replies, there’s actions, there’s videos. When brands are starting to move to that, it’s a perfect experience for then prompting a consumer to actually engage with that standard more. And so I think those two things are going to combine significantly for brands to actually make the experience much better.
Greg Kihlstrom (16:43)
So, yeah, so to build on that a little bit, then, you know, what should brands do? mean, knowing that the consumer behavior is changing, you know, there is more comfortability with with responding, but still maybe not hasn’t quite normalized yet. What should brands do as consumers are slowly evolving or maybe more quickly evolving? But, you know, what should they be doing now to encourage this and and not, you know, pass up opportunities?
Eric Miao (17:11)
Yeah, I mean, I’m biased, but I think our belief at least at Attentive is you should pick long term partners whose long term vision you’re aligned with. And so when we started ⁓ Attentive, we were originally only an SMS marketing solution. That’s all we did. And we’ve evolved significantly since then. But we started with SMS because it was quite clear this was a space in the phone. This was a piece of real estate that was super valuable. It was clearly where the consumer was. we sort of that long term that would be obviously the place you would want to continue to engage with your consumer. And I think we were right about that. I think our current bet and if what I would advise any brand is the future very obviously is trying to directly engage your consumer exactly the way they want to be engaged with the things that are interesting to them.
probably message them over time, in some cases less, in some cases more, with totally different content. And I think that if I was a brand, these are the kinds of things that I just, they’re not scalable for me as a brand to staff up and do. And so given that that’s true, you have to find the right partner. I think our bet has been, you know, as long as you follow the consumer towards what they’re interested in you’re going to do really well. And so that’s been a different view, I think, than what’s traditionally been in the market. I think that the largest marketing platforms, Salesforce as an example, their view has been do everything with Salesforce. And if it doesn’t work out for the consumer, that’s tough. You’re in a long term relationship with Salesforce. And so I think that’s a big change as it relates to sort of like being hyper focused on just getting an actual one-to-one relationship with the consumer and picking partners who you think will help you do that.
Greg Kihlstrom (19:10)
Yeah, yeah. Love it. Well, Eric, thanks so much for joining the show today. One last question for you. Like to ask this to everybody. What do you do to stay agile in your role and how do you find a way to do it consistently?
Eric Miao (19:23)
Yeah, so I read books. I try very hard. I know it’s a silly answer, but I try to read around a book a week. I was always impressed when I read that, like, you know, Karl Rove and President Bush found time to do that. Figured if they could do it, I could do it. But I also read things written about technology from a while ago because it tends to be true that in the moment you can’t really see what’s going on. There’s there’s too much stuff going on people tended to be actually more right about the future like 15 or 20 years ago than people today living it, because now we’re in it. So I try, I seek out a lot of sort of older writings about technology to just to get my bearings.
