We’ve analyzed and dissected the baby boomers ad nauseum.
We had to. The sudden take-off of the Internet has forced us to address the growing importance of Gen-X.
But little attention has been paid to the tidal wave forming on the horizon Gen-Y. That surging youth market will ultimately dictate the success or failure of many of today’s marketers, particularly those operating in the B2C (business-to-consumer) marketplace.
How big is big? Roughly speaking, the boundaries of Gen-Y run from 5 to 20 years of age (56 million), with particular importance paid to those 12 to 19 (31 million). This is the fastest-growing demographic group in the U.S. under the age of 65, with estimates of their direct spending put at $275 billion annually.
How do they behave? Because this generation has never lived through periods of risk, failure or economic depression, their attitude is very much one of spend now and pay later.
The prevailing belief is that the good times will never end. And, because good jobs are so easy to find, they’re not about to be afraid to give up their existing job for something they perceive to be different or better.
While the video game is a favorite pastime with this group, the Web is unquestionably their medium of choice. A 1998 Roper Youth Report revealed that 69 percent of the 6- to 17-year-old set “used a personal computer in the past 30 days.”
Surprisingly, they’re already big purchasers. The National Longitudinal Survey of Youth sponsored by the U.S. Department of Labor in 1997 shows the median amount of allowance and cash that kids get from parents and guardians for chores, handouts, trips to movies, etc., is $50 a week. (The range varies from $20-$175 depending upon geography and household affluence.)
Big savers
But they are big on saving and investing as well. According to Mark Clausen, president of AllowanceNet.com, a Web site designed to allow kids and parents to develop and manage allowance, “What we see is a larger-than-normal desire for kids to save.”
Ginger Thomson, president of Doughnet.com, an online shopping, education and banking enterprise for teens, concurs. “They are better savers than we thought they’d be, saving roughly 15 percent of their money when we thought it would be 5 to 10 percent.”
The 1999 Youth and Money Survey sponsored by the American Savings Education Council indicates that half of those in the 16-22 age bracket always save a portion of their money.
A Merrill Lynch study reveals that 11 percent invest in mutual funds and as many own stock. A 1998 Teenage Research Unlimited study shows that more than 10 percent even use debit cards.
How do they respond to marketing? Outside of Pokemon, which appeals to the younger set, Ys are not yet associated with any universally accepted and easily identifiable brands or icons. That, however, will soon change.
Mimicking their boomer parents, teen-agers are equally infatuated with brands. Says Irma Zandl, president of the Zandl Group, which specializes in trend research involving under-30 consumers, “The number of teen-agers that say something has to be a brand name has gone up. The brand-name phenomenon goes quite young, too… maybe 10 for the boys and even younger for the girls.”
And, adds Zandl, “They’re making purchasing decisions at a much earlier point in time than in years past.”
Because they spend so much of their time attached to their computers, online marketing and the Web will be dominant strategies for developing a marketing relationship with Gen-Y.
E-mail is essential
This is also a generation with heretofore unheard-of access to consumer information. Couple that with expanded choice and what results is greater individuality and self-expression in how they select and interact with their brands and provide feedback.
To that point, communicating through e-mail is essential to this group.
Ys believe in subtle marketing, from sponsorship of music acts to extreme sporting events. Local grassroots marketing is particularly effective since it allows them to stumble onto the brand in the most unexpected places.
Media campaigns, television in particular, targeting Gen-Y must be funny, unpretentious and laden with attitude. What makes sense to them is quite often utterly confusing to the older consumer.
Smarter marketers such as Tommy Hilfiger and Old Navy have understood that “coolness” is an important ingredient in cultivating Ys.
Dan Acuff, president of Youth Market Systems Consulting, estimates that 72 percent of today’s food and beverage purchases are influenced by kids.
“If a manufacturer or retailer chooses to ignore today’s youth, they really risk going gray. This is a critical age group to pay attention to today, no matter who you are,” says Zandl.
Alf Nucifora is an Atlanta-based marketing consultant. He can be contacted via e-mail at [email protected] or by fax at (770) 952-7834.
