By Strategy

Date: 29 May, 2018

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This month, our ROTHCO Cultural Strategists explore Silicon Valley’s Rising Goldmine.

Move over millennials, there’s a new kid in town. 53% of 3-year-olds and 47% of 4-year-olds ask their parents for specific brands over products. Even as toddlers, they’re savvy consumers, and brands are now rushing to connect with their next generation of shoppers. They’re the first generation to grow up with the internet in the palm of their hands (quite literally) which explains why in the last few weeks, the wave of products coming out of Silicone Valley are aimed at getting them locked in at an early age.

How is this trend emerging?

Right now, 45% of American households are Amazon Prime members. That equates to 57 million homes or 171 million people. At the same time, just under 50 million people in America have access to a smart speaker – with the highest penetration of these being our good friend Alexa. The family friendly robot with the tiny price tag has been at the top of Christmas lists for the last two years.

Back in 2016, Hunter Walk wrote about the effects Alexa had on his family. While most were extremely positive, he raised concerns that it had in fact, managed to turn his child into an ‘ill-mannered, raging asshole’. Last month, Amazon finally got around to addressing his concerns and launched ‘Amazon for kids’; a child-friendly device packed full of age-appropriate content including 300 audiobooks, skills from Disney and National Geographic (skills are add-on capabilities for Alexa), and most importantly, FreeTime, an all-in-one subscription to over 15,000 kid-safe books, videos, apps and games. This allows parents to set controls that allow them to personalise use time limits, set educational goals, filter content, monitor their children at bedtime and reward them for their use of ‘Please’ and ‘Thank You’. Google was also hot on its heels and has a similar skill, ‘Magic Word’, that will only answer to good manners. Amazon is now developing its voice commands to understand ‘Awexa’ for younger kids who might not be able to say ‘Alexa’ properly.

In early March, Fitbit announced the launch of ‘Fitbit Ace’ for tweens aged 8 – 12. This stripped back version allows them to set daily activity goals and step challenges against their siblings and peers. It will nudge kids to run around if they’ve been sitting for too long, and an integrated app allows parents to monitor their kids’ movement and even their sleep patterns.

POSB bank in Singapore has created ‘POSB Smart Buddy’; an ‘in-school payment wearable’ that uses contactless payment, while also tracking daily activity using a built-in GPS. Parents can monitor where their kids are at all times and what they are spending their money on. Currently, in Ireland, 1 in 3 children are suffering from childhood obesity and struggle to spend more than 30 minutes outside. Gamification of their activity allows children to see fitness as a challenge, meaning fitness trackers could be an essential tool in changing habits around sports and fitness from an early age.

What brands are doing it well?

Nintendo has been an entertainment staple in many households for years. Last year it had its most successful launch with the Nintendo Switch, but despite buying the device, parents were left with a dilemma; in Ireland children, as young as seven spend over three hours a day in front of a screen. Nintendo saw an opportunity to turn this time around while still keeping the kids playing. They launched Nintendo Labo; an extension that combines the digital world with the physical by using cardboard cut-out kits in combination with the Switch. It uses the tech as a way to teach kids principles of engineering, physics, and basic programming to kids. Think of it as an advanced Lego. Children are free to create things, such as robots, digital fishing rods, jetpacks and electrical instruments by using simple coding techniques and their imagination. This innovative use of gaming and tech turns education into play and leaves children inspired to build and do more.

Why are we telling you this?

Technology is at the centre of our lives, whether we can see it or not. It’s been predicted that by 2023 we will be having more conversations with our AI’s than our partners. Gen Z are powerful customers and are currently controlling $500 billion in spending every year, but brands and companies need to be cautious and navigate the fear parents have around the effects of technology on their children. They need to show how tech can have a positive impact on their life by inspiring, entertaining and educating the new generation, instead of just adding to the problem.

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