Bottom Line:
Banking on Generation Y
Why the fast-paced millennials are the stars in today's retail landscape and how you can reach them
By Erinn Morgan
| Gen Y At a Glance |
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| WHO: 74 million people, ages 8 to 29 LIKES: free content, wireless, all things social, social networking, supporting a cause DISLIKES: soul-less mass marketing SPENDING POWER: $200 billion a year |
Who are "the connecteds?" This massive generation, which has many monikers from "generation Y" to "the millennials," is made up of the children of the baby boomers. Born between 1980 and 2000, their current ages range from eight to 29. And, as a force that represents a large percentage of the U.S. population, at about 74 million people, they hold immense purchasing power. Generation Y, in fact, outnumbers their generation X predecessors by nearly two to one and they even outpace their baby boomer parents by several million.
The young adult members of generation Y lay claim to an average of $100 a week in disposable income, and millennials collectively spend a whopping $200 billion a year. Are you tapping into this market? If you're not linked in to the energy of these "echo boomers," you may be missing out on one of the greatest spending forces in American history.
WHO THEY ARE
Without a doubt, millenials are the future. And, this self-confident, team-spirited, politically liberal group is changing the rules of the game every step of the way. They are:
■ Digitally literate. Raised attached to cell phones, the Internet, and social networking, they take such conveniences for granted because they have always been a part of life.
■ Diverse. Generation Y is also incredibly diverse from both an ethnic and a cultural standpoint. The younger adult faction of this group, ages 18 to 24, accounts for a full 59 percent, according to "The Adults of generation Y in the U.S.," a recent report from Packaged Facts. Hispanics make up 22 percent of the entire generation.
■ Wellness driven. While they eschew past generations' obsession with fitness and physical appearance, generation Y has a passion for balancing a fulfilling work life with leisure time and outdoor activities.
This generation has been called one of the most confident generations in history, and many are convinced they can change the world from many fronts, including business, the environment, technology, and politics.
Watch for millennials to shine in the coming years as they grow their knowledge, power, and financial clout.
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Gen Y celebs from top, Britney Spears in style Ga Ga Galore by Blinde; Chace Crawford in ck by Calvin Klein style ck3063s from Marchon; and Robert Pattinson in Ray-Ban's Clubmaster style RB 3016 from Luxottica |
| HOW TO REACH THEM |
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| Their current and future spending potential make the millennials a market to be reckoned with—they have a great deal of influence over the future success of products and the stores that sell them. According to generation Y marketing experts, there are four key ideals they look for in a product or service before making a purchase—reasonable cost, good quality, fast and reliable service, and an "experience." If you offer these retail tenets, you might just gain a new customer base. Still, the echo boomers are a fickle generation and your marketing strategies designed to reach them must be approached with more of an anti-marketing approach. Here are four ways to step up your business to meet the demands of generation Y: 1 BE AUTHENTIC: This powerful group has grown up with everything from slick advertising to reality shows and televised wars, so they have a keen, perceived sense of the truth—and a desire for it on all fronts. When marketing your business or products to this generation, be honest. They will go running if they sense a hint of false advertising or over-promising in your message. Once they've made their way into your business, you can keep them there by delivering consistent, fast, and solid service and by talking "with" them not "at" them. Generation Y is very knowledgeable, connected, and aware. Talking down to them is a sure-fire way to lose their business—and that of their friends. 2 BE COOL: Also know that generation Y cares more about what you have to say if your business has been endorsed by their friends. A great way to reach this group is through the many events they enjoy attending. Sponsoring an event or advertising at one can up your credibility with the millennials. If you want to be taken seriously by this group, reach out to them at concerts and music festivals, extreme sporting events, movies, outdoor events, and social networking sites like Facebook and MySpace. 3 DELIVER AN EXPERIENCE: Because the members of generation Y want to experience the world for themselves and pass their own judgment instead of being told what to do or like, they have been defined as an "experience" culture. Because this is the case, they will look for some kind of experiential encounter in your optical shop or dispensary. If you can deliver a unique experience via music, displays, P.O.P., or service, you might just appeal to this generation of shoppers. 4 USE CONTESTS AND PROMOTIONS: As an extension of their desire for experience, millennials appreciate the excitement generated by a contest to win free concert tickets or a ski weekend, or a promotion that ties in creative discounts. If the promotion or contest is delivered in a unique way that appeals to their senses, you will likely draw their attention and keep it. |
HOW THEY SPEND
Generation Y's confident, entrepreneurial spirit will equate to a boom in their future wealth. Some estimates peg their spending power to be $3.5 trillion by middle age. For now, while in their youth, they struggle with finances as their desire for luxury products collides with education expenses and more difficult economic times.
| Good ‘n’ Green Leanings |
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| Generation Y has a philanthropic mindset that includes everything from people in need to environmental issues. They also expect the companies and products they support to feel the same way. In fact, 91 percent of millennials value companies and products that support good causes, according to a Cone/Roper report. Additionally, 89 percent would be likely to switch to a brand that is associated with a good cause. |
This group tends to be cash-crunched and has difficulty saving money. In fact, a report from Mintel, a market research firm, indicates that 69 percent of gen Y workers who are eligible for a tax-deferred 401(k) retirement plan do not participate.
As a spending force, they have a short attention span, demand instant gratification, and expect authenticity in advertising. They vacillate between desiring customizable products that reflect their individuality and a homogeneity in mindset with their peers. Gen Y is a difficult group to pin down for marketing purposes. They fit no preconceived mold. EB
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