October 12, 2006
Gen Y Most Influential Consumer Group
Move over boomers. Gen Y is moving in. That’s the analysis of online marketing expert Kelly Mooney.
Ms. Mooney, who is the President and Chief Experience Officer of Resource Interactive and co-author of The Ten Demandments: Rules to Live By in the Age of the Demanding Customer (McGraw-Hill, 2002), told USA Today that at 82 million strong, those born from 1982 to 2000 are influencing family purchases at a very high rate.
In clothing for example, Gen Y members between the ages of 13 to 21 are said to influence 81 percent of household purchases. The influence percentage for car purchases is 52 percent.
Kit Yarrow, a consumer psychologist and professor at Golden Gate University, said it shouldn’t be surprising these young consumers have an “equal vote in the look and style of the family.”
“Gen Y parents tend to be non-authoritarian and value their friendships with their kids,” she said. “These parents also prize their own youthful, ‘kid-like’ qualities.”
When it comes to actual purchases, Ms. Mooney said Gen Y consumers avoid the middle of the road. They rarely purchase anything that is not either on the high or low end of the retail scale. Retailers that straddle the area between the poles are likely to get lost when Gen Y consumers are considering where to buy.
Jennifer Black, president of Jennifer Black & Associates, agrees and points to the success of retailers such as Abercrombie & Fitch and Forever 21 to illustrate the polar opposite buying habits of Gen Y consumers.
“The moderate segment is getting more squeezed,” said Ms. Black. “Girls want to buy something that’s special vs. something that’s kind of in the middle.”
Micky Osterman, a 16-year-old high school student from Columbus, Ohio, is partial to high-end brands. “I want a … midnight blue Mustang convertible. I want to buy all my underwear at Victoria’s Secret. I want to shop at Polo (and) The Limited. … I would love a pair of Dolce & Gabbana sunglasses. And a Coach purse.”
Discussion Questions: What should retailers make of Gen Y’s influence on household purchases? Does this influence need to be considered by retailers
and brand marketers that are not directly selling to the demographic but selling to their parents instead?
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The age group in question (defined as “born from 1982 to 2000) is too broad to paint with one brush. The older members of Gen Y are right in the middle of the “Baby Boom Echo” and the youngest (only six years old today) could easily be grandkids of the Baby Boom. So you have to determine the spending priorities of the different age groups.
The oldest Gen Y’ers are out of college, establishing careers, developing their own households. They will learn (as their parents did) that home goods, food, cars, insurance and health care chew up a lot of disposable income that used to be spent on apparel and impulse purchases. The youngest Gen Y’ers are at the stage where apparel, accessories, online music services and DVD’s are the most important categories to spend their money (or their parents’ money) on.
So retailers considering how to market to the “next generation” rather than to the Baby Boom itself really need to focus on a smaller subset of that huge population base. If you don’t target your customer in a more focused way, you’ll have trouble succeeding depending on the category you’re trying to sell.
This is indeed a very broad group with diverse interests. However, since we’re talking primarily about the impact on the supermarket industry here, we have to do something about getting a larger portion of Gen Y interested in cooking. They simply do not perceive this as a wholly necessary life skill.
While the baby boomers still have the most discretionary money, they already have, for the most part, whatever they need. Gen Y is still in the accumulation stage. Thus the fine line for the retailer is to create an experience that plays to Gen Y and not offend the baby boomers.
Even ancient scriptures tell us to avoid the ‘luke-warm’ and that to be either hot or cold is a much more honest, courageous and ultimately rewarding life strategy. Now we’re recognizing that as a marketing strategy too. This philosophy of finding some kind of common denominator, trying to stay in the mushy middle is going to ruin retailers, schools systems, politicians and pretty well anything or anyone else trying to influence society.
So is this demographic segment now behind The Age of Demand? Are we now driven by a market of ‘demandments’? And what exactly does that mean? If it means “We’ll accept AND GIVE nothing but superior service and products” then I applaud. If it means “You owe me” then our world is in trouble.
There are certain quantum universal laws that govern abundance, prosperity, love, attraction and so on and those have never changed and never will. When we learn to live within them, regardless of our age, life – and business – will be enormously rewarding.
Of course! How can any marketer worth his or her salt ignore an entire cohort and its direct and indirect influence on purchase decisions?
As has been mentioned before in this forum, retailers are migrating toward two ends of the continuum: low cost mass merchandise and high end specialty stores. Gen Y will accelerate the process based upon the research reported here. However, this generation is also more demanding of personalization and customization creating a challenge for the mass merchandisers. Not only is there a large spread of ages, but these consumers demand what they want when they want it. Identifying, creating and providing what they want in a format they like to shop with prices they are willing to pay will be a major challenge going forward.
With a respectful nod to Strauss & Howe, it may not be entirely accurate to see this particular 20-year (okay, 19) group as a cohort group with consistent behaviors and shared values. A recent reading of The Consistent Consumer by Ken Beller persuasively suggests that the group cited overlaps portions of three different age demographics. Very different demographics.
It’s easy for a 16 year old to want only the best. Can they pay for the best out of their own pocket? The best iPod is more easily affordable than the best car. If Gen Y can only influence a purchase (because the price point is not achievable on their own) the marketing is more complicated. Gen Y people often want to purchase on an aspirational basis, yet their own incomes are usually modest. Perhaps that helps account for the high/low positioning.
What about Gen XY? We are the generation that is too young to be marketed like Gen X-ers and too old to wear Abercrombie and Fitch? I am talking about the those born in 1975-1985. We are so often overlooked, even by the companies we work for and represent. We are the style, health, design, quality, and price conscious. We don’t want to feed our kids McDonald’s. We are developing their palate at an early age. We buy VWs because they are stylish and have tons of airbags. We use Macs and have at least 3 iPods per household. Our children are wearing mini Vans Slip-ons and are going to skate parks, not baseball practice. But it seems like the only company that are marketing to us is Target. I currently work as a designer for a large company in the South. Several designers, including myself, are constantly having our work turned down because it is too progressive, and not conservative enough. But in the same right, we are trying to market to people our age who may have morals and believe in family, but still want style, and still want to feel young. Am I saying that I want the entire market to revolve around us? Absolutely not. But what I am saying is that the Young Professional market is still out there. In a country is catering to conservative right and the tweens, where does this leave those in between? I guess all my money is going to Target.
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The age group in question (defined as “born from 1982 to 2000) is too broad to paint with one brush. The older members of Gen Y are right in the middle of the “Baby Boom Echo” and the youngest (only six years old today) could easily be grandkids of the Baby Boom. So you have to determine the spending priorities of the different age groups.
The oldest Gen Y’ers are out of college, establishing careers, developing their own households. They will learn (as their parents did) that home goods, food, cars, insurance and health care chew up a lot of disposable income that used to be spent on apparel and impulse purchases. The youngest Gen Y’ers are at the stage where apparel, accessories, online music services and DVD’s are the most important categories to spend their money (or their parents’ money) on.
So retailers considering how to market to the “next generation” rather than to the Baby Boom itself really need to focus on a smaller subset of that huge population base. If you don’t target your customer in a more focused way, you’ll have trouble succeeding depending on the category you’re trying to sell.
This is indeed a very broad group with diverse interests. However, since we’re talking primarily about the impact on the supermarket industry here, we have to do something about getting a larger portion of Gen Y interested in cooking. They simply do not perceive this as a wholly necessary life skill.
While the baby boomers still have the most discretionary money, they already have, for the most part, whatever they need. Gen Y is still in the accumulation stage. Thus the fine line for the retailer is to create an experience that plays to Gen Y and not offend the baby boomers.
Even ancient scriptures tell us to avoid the ‘luke-warm’ and that to be either hot or cold is a much more honest, courageous and ultimately rewarding life strategy. Now we’re recognizing that as a marketing strategy too. This philosophy of finding some kind of common denominator, trying to stay in the mushy middle is going to ruin retailers, schools systems, politicians and pretty well anything or anyone else trying to influence society.
So is this demographic segment now behind The Age of Demand? Are we now driven by a market of ‘demandments’? And what exactly does that mean? If it means “We’ll accept AND GIVE nothing but superior service and products” then I applaud. If it means “You owe me” then our world is in trouble.
There are certain quantum universal laws that govern abundance, prosperity, love, attraction and so on and those have never changed and never will. When we learn to live within them, regardless of our age, life – and business – will be enormously rewarding.
Of course! How can any marketer worth his or her salt ignore an entire cohort and its direct and indirect influence on purchase decisions?
As has been mentioned before in this forum, retailers are migrating toward two ends of the continuum: low cost mass merchandise and high end specialty stores. Gen Y will accelerate the process based upon the research reported here. However, this generation is also more demanding of personalization and customization creating a challenge for the mass merchandisers. Not only is there a large spread of ages, but these consumers demand what they want when they want it. Identifying, creating and providing what they want in a format they like to shop with prices they are willing to pay will be a major challenge going forward.
With a respectful nod to Strauss & Howe, it may not be entirely accurate to see this particular 20-year (okay, 19) group as a cohort group with consistent behaviors and shared values. A recent reading of The Consistent Consumer by Ken Beller persuasively suggests that the group cited overlaps portions of three different age demographics. Very different demographics.
It’s easy for a 16 year old to want only the best. Can they pay for the best out of their own pocket? The best iPod is more easily affordable than the best car. If Gen Y can only influence a purchase (because the price point is not achievable on their own) the marketing is more complicated. Gen Y people often want to purchase on an aspirational basis, yet their own incomes are usually modest. Perhaps that helps account for the high/low positioning.
What about Gen XY? We are the generation that is too young to be marketed like Gen X-ers and too old to wear Abercrombie and Fitch? I am talking about the those born in 1975-1985. We are so often overlooked, even by the companies we work for and represent. We are the style, health, design, quality, and price conscious. We don’t want to feed our kids McDonald’s. We are developing their palate at an early age. We buy VWs because they are stylish and have tons of airbags. We use Macs and have at least 3 iPods per household. Our children are wearing mini Vans Slip-ons and are going to skate parks, not baseball practice. But it seems like the only company that are marketing to us is Target. I currently work as a designer for a large company in the South. Several designers, including myself, are constantly having our work turned down because it is too progressive, and not conservative enough. But in the same right, we are trying to market to people our age who may have morals and believe in family, but still want style, and still want to feel young. Am I saying that I want the entire market to revolve around us? Absolutely not. But what I am saying is that the Young Professional market is still out there. In a country is catering to conservative right and the tweens, where does this leave those in between? I guess all my money is going to Target.