“Millennials The Smashed Avo Generation?”Glenn Schultz

Millennials

Millennials

“One Generation’s Impossible

Is the next ones Normal” Samsung, 2017

Millennials

Millennials

• We are normal. Why badge as different?

• Baby Boomers were different but considered normal at their age

• This is not a criticism

• First Generation to be born with complete technology change

Millennials

Millennials

Who are Millennials?

• What makes them different?

• Why do we care?

• Threat or Opportunity?

• How do we adapt our Business?

• Need Your Input!

Data Source: Macquarie Research June 2017)

Millennials

Who are Millennials?

Greatest Generation Pre

1946

Baby Boomers1946 - 1964

Generation X 1965 - 1979

Generation YMillennials1980 - 2000

Generation Z2000 Onwards

• X, Y and Z = Often Confused• No Defined Boundaries

75 (+)

Years old

52 – 74

Years old

36 – 51

Years old

16 – 35

Years old

0 - 16

Years old

Millennials

Millennials - how are they reshaping the Australian Economy?

• Are a misunderstood demographic

• Aim to shed some light on characteristics

• How they will shape Income and Consumption Pie

• Important ramification on workforce – Transition in employment that is expected to occur

• Digital natives will become most powerful consumer in history

• Millennials will be empowered to customize their own hierarchy of needs and preferences

Millennials

The Largest Demographic Cohort

-200 -150 -100 -50 0 50 100 150 200

0

10

20

30

40

50

60

70

80

90

100

Australia: Population distribution - 2016

Females Males

Age

Silent Generation,

(75-91 yrs old)

Baby Boomers,

(52-74 yrs old)

Gen X,

(36-51 yrs)

Gen Y,

(16-35 yrs)

Gen Z,

(0-16 yrs old)

Greatest Generation,

(92+ yrs old)

103k,

0.4%

2.2mn,

9.1%

5.1m,

21.2%

4.78mn,

19.8%

7.1mn,

29.5%

4.8mn,

20%

• At 7.1m people and 29% of the population, Millennials are already biggest demographic cohort.

• Baby boomers at 5.1m people and 21% of the population

Millennials

Biggest by 2030 at peak income levels

• Millennials rise to 8.7m people and 29% of the population by 2030.

• 54% of the population(Gen Y and Gen X) Born into the Digital Age.

-250 -200 -150 -100 -50 0 50 100 150 200 250

0

10

20

30

40

50

60

70

80

90

100

Australia: Population distribution - 2030

Females Males

Age

Silent Generation,

(89+ yrs old)

Baby Boomers,

(66-88 yrs old)

Gen X,

(51-65 yrs)

Gen Y,

(30-50 yrs)

Gen Z,

(10-29 yrs old)

Next Gen,

(0-9 yrs old)

766k,

2.5%

4.5mn,

15.0%

5.0m,

16.5%

8.67mn,

28.8%

7.5mn,

25.0%

3.65mn,

12.1%

Millennials

Keeping Australia Younger – Millennial Effect

20

25

30

35

40

45

50

20

25

30

35

40

45

50

Median age by country Advanced economy median

YearsYearsAdvanced Economies: Median age

• Median Age (38 Years Old). Sustained by Millennials (26.5 Years Old) and new arrivals (27 Years Old) – Below advanced Economy Median

Millennials

Millennial Earning, Now, and in the Future

228.7

853.6

1241.4

0%

10%

20%

30%

40%

50%

60%

70%

0

200

400

600

800

1000

1200

1400

2017 2030 2050

Millennials Total Income Millennials earnings as % of total population earnings Number Millennials a % of working population

Year Millennials Total Income ($BN)

Millennial Earnings as % of Total Earnings

Millennials as % of Working Population

2017 $228.7 35% 40%

2030 $853.6 59% 53%

2050 $1,241.4 31% 32%

Millennials

By 2020 millennials will make up over a third of the global workforce

Millennials

Generation X “The Lost Tribe”

• Transitional Generation• Caught between two very different generations

Millennials

75% of Millennials would like more opportunities to work remotely• Millennials are the most likely

generation to say that they would change jobs, give up promotion opportunities, move locations, or take a pay cut to have flexible work arrangements.

Millennials

50% of millennials are open to non-traditional forms of employment in the future

• Technology and Infrastructure will provide tools for enabling people to connect and work remotely

Millennials

Oil and Gas, Defence and Insurance most unappealing to Millennials Globally

• It is no surprise that Company Brand and Values appeal to Millennials

• 58% of Millennials surveyed said they would avoid working in a sector solely because of negative image.

Millennials

Young people have adopted technology faster

• Digital Natives accelerating the shift to the fourth industrial revolution. (explanation next slide)

• Expect technological connectivity.

• 2.5x more likely to adopt tech early compared with other generations

Millennials

The Industrial Revolutions

First Industrial Revolution • 18th to 19th Centuries• Rural societies become Industrial and Urban• Iron and textile industries, development of the Steam Engine

Second Industrial Revolution • Between 1870 and 1914; just before WWI• Electric Power to create mass production• Telephone, light bulb, phonograph and internal combustion

engine

Third Industrial Revolution • 1980’s onwards• Mechanical devices to digital technology• Personal computer, internet, information and communication

technology(ICT)

Fourth Industrial Revolution • Now• Technology embedded in societies and even the human body• Robotics, Artificial Intelligence, Nanotechnology, quantum

computing, biotechnology, internet of things, 3D printing, autonomous vehicles

Millennials

The proportion of Digital Natives is set to soar

• Increased internet adoption and smartphone usage

• Logistical improvement in Supply Chain Transforming how World consumers Goods and Services

• Can Insurance Keep Up?

Millennials

Worldwide internet usage by age group

• Smartphones are the tech gateway device for younger demographics

• What do you use smartphones for?

Millennials

Time online with mobile by generation

• 77% of 18-24 year olds reach for their phone first when nothing is occupying their time

Millennials

Demographic composition of major social networks

• Social Media is integral to daily lives

• Leading to increasing demand for a “one-stop-shop” network interface

• WeChat in China(Amazing!!)

Millennials

Millennials share more feedback online

• Look at Reviews on the move, provide regular feedback online, price compare and make informed and researched purchasing decisions

Millennials

Smartphone to look up a product while in a shop

• 85% of Millennials trust online product reviews

• 65% from like-minded individuals

• 57% from people they follow online

• 53% from Social Networks

Millennials

Millennials looked up the following in a shop

• Where the eyes go the dollars follow: The generation that grew up online, shops online

• How will this translate to Insurance/Risk Advice?

Millennials

Australia’s Lag in online purchases

• Australia is behind Global Average.

Millennials

The shift to services from manufacturing will accelerate in the era of millennials

55

60

65

70

75

0

4

8

12

16

20

Jun-74 Jun-84 Jun-94 Jun-04 Jun-14

Agriculture Mining Manufacturing Construction Services (RHS)

Australia: Output by sector

(% share of GVA)%%

Millennials

The shift to services from manufacturing will accelerate in the era of millennials

• Buying a Car and a TV are now the lowest and second lowest priorities for Millennials

• Millennials are prioritising experiences and the purpose of goods and services over materialism

• Australian Economic output has shifted from a focus on manufacturing goods to providing services

Millennials

Share of monthly spending by demographic cohort (%)

• Millennials have different spending patterns

• Does “Lesser” home ownership have an effect

• Millennials will be different. As they grow older will they assume same spending patterns as baby boomers?

Millennials

Australia benefiting from declining interest in studying in the US

50

55

60

65

70

75

80

85

90

95

100

5/29/2016 6/29/2016 7/29/2016 8/29/2016 9/29/2016 10/29/2016 11/29/2016 12/29/2016 1/29/2017 2/28/2017 3/31/2017 4/30/2017

Trend in Google searches

Study in Australia: (Worldwide) Study in USA: (Worldwide)

Millennials

Australia benefiting from declining interest in studying in the US

• International education is already one of Australia’s top services exports

• Key growth sector that will support economy over next decade.

• Millennials are first generation of EDTECH Learners (Online)

• STEM (Science, Technology, Engineering and Mathematics) will become more relevant for Next Gen jobs

Millennials

Millennials drive mainstreaming of sustainable consumerism

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Pay extra for sustainable products

Check the label for environmental impact

Prefer to work for a sustainable company

Gen Z Millennials Gen X Boomers Silent

• Millennials put their money where their mouth is on the sustainability and ethics of goods and services.

• Millennials are potentially more critical and less forgiving of CorporateMisbehaviour

Millennials

Most Millennials -Why the ‘Ys’ Love TV Ads

Millennials

Why the ‘Ys’ Love TV Ads

Millennials

Millennials

Millennials

Millennials

Gen Y Women

Millennials

Gen Y Women

Millennials

Gen Z Infographic

Millennials

Gen Z Infographic

Millennials

Gen Z Infographic

Millennials

So…..

• Millennials are different

• Big Influence as a Customer

• Bigger Influence as a Business Owner

• Their needs are different

• Transacting with Millennials successfully requires change – to what?

• We need your input…You are Millennials!

Millennials

Man and Machine – Not Man versus Machine• Old Philosophy: The world of high performing academia is the perfect specimen of

intelligence.

• Human intelligence working in a silo can be riddled with bias and problems with scale

• New Philosophy: A world where artificial intelligence is destined to reign supreme (e.g. Watson, Deep Blue or Hal).

• Artificial intelligence working in a silo doesn’t take into account the nuances of marketing science.

• Man and Machine – The power of human intelligence and amplifying with technology.

• Offers a scenario where humans still own the central role in directing machine intelligence.

Millennials

Man and Machine – Not Man versus Machine

• Man + Machine = Amplified intelligence (uses the strengths of each – people and Tech – to push the boundaries of what we can achieve).

Questions:

• Is there a “Crossover” of Millennials requirements and man + machine?

• Is this the future of Risk Advisory Business?