Generation Y, those born between 1978 and 2000, has overtaken baby boomers in sheer numbers and is poised to do the same with its incomes by 2017. Often called Millennials, these tween, teen, and twenty-somethings have become the nation’s tastemakers, holding unprecedented sway over almost every aspect of shopping. From their own—and their parents’—clothing styles, to the design of everything from cars to fitting rooms, and the way we learn about products and evaluate options, Gen Y’s stamp is everywhere.
The economic downturn that began in earnest in 2008 has resulted in nothing short of a new American consumer, and Gen Y, always on the forefront, has already mastered the mentality and expertise that other generations will mimic—notably the confidence to demand that retailers bow to their needs, and the ability to capitalize on the expanded purchase, pricing, and customization options made possible by our digital world. Likewise, American consumers are becoming more confident of their power and more skeptical of businesses, more willing to use technology to find bargains, more demanding and exacting in their standards, and paradoxically more eager than ever to find solutions in the products, brands, and retailers that earn their trust. Today’s consumers won’t be ‘‘sold’’; they want to be seen, known, and respected—and only those marketers and retailers that invest in relationships through empathy, deep understanding, and insight will prevail.
Gen Yers’ confidence, knowledge of and interest in the marketplace, and love of technology have long made them a force to be reckoned with. Today those standards are even higher as Gen Yers, along with the rest of the nation, more carefully consider their purchases and loyalties and search for collaboration and partnerships with brands and retailers.
Marketers that know what works with Gen Y are poised to thrive in the new economy. Gen Yers are the young adults and soon-to-be young adults, feathering their nests, outfitting their interests, and establishing relationships with the brands and retailers that will serve them for years to come. Addition-ally, all age groups hoping to maximize their dollars in the new economy will cultivate their own versions of Gen Y’s confidence and technologically enhanced shopping expertise—out of necessity. What works with Gen Y will increasingly work with all generations—which is why we say they’re revolutionizing retail.
There’s a sliver of a silver lining for those retailers and marketers catering to Gen Y—though these consumers have tightened their (low-slung) belts along with the rest of the population, they (and the parents and grandparents spending for them) have also kept shopping at a slightly higher rate and most certainly with a greater joie de vivre. From Starbucks lattes to plastic surgery, Gen Yers have reduced their spending less than other generations.
Nevertheless, when consumer spending dips, marketers and retailers fight for fewer dollars. But it won’t be just the brands with the biggest marketing budgets or splashy ads that will win, especially with young consumers. Courting Gen Y can be cost effective—given the appeal, for example, of text-messaged pitches and counterintuitive approaches—you just need to know how to do it.
That’s where we come in. As an acclaimed consumer psychologist, professor, and consultant (Kit), and an award-winning USA Today retail and automotive reporter (Jayne), we’re here to explain all the whys behind the buys of this seemingly fickle gener-ation. Gen Yers demand an authentic relationship based on a deep knowledge of who they are and what makes them tick (and buy). We’ll help marketers get there—and give some insights to anyone else who wants to get to know this unique generation better.
Between their own spending and the influence they have on their families and both in-person and virtual friends, Gen Yers’ importance to retailers and marketers is undeniable. As they move into their prime adult spending years, the consumer clout of this group will only increase. They are, in short, the future of every company. So we’d best get to know them now.
Here’s a peek at a couple of the people we interviewed who underscore our points:
Isabel, eighteen, of Glen Burnie, Maryland, instant messages her mother frequently with pictures of clothes she wants and the website addresses where her mom can buy them. Isabel says shopping has a ‘‘calming effect’’ on her and she often just ‘‘window shops’’ online when she doesn’t have a car to go to the mall. Like many in her generation, closet turnover is part of the equation: ‘‘I just always get tired of what I have,’’ she says. Sure, she likes higher-end offerings from BCBG or Ralph Lauren, but she’s happy to mix them with discount apparel. ‘‘I really do think that clothes can tell a lot about a person, and I love having really nice pieces paired with something I got for $7.99 at Target,’’ she says. ‘‘I’ve always thought if it looks good it doesn’t matter where you got it.’’ Like many of the parents of Gen Y, this University of Maryland student’s mother is a trusted shopping partner and an active participant in her daughter’s acquisitions. Isabel and her generation are less ambivalent about shopping and brands than previous generations were, and they confidently acquire and mix the pieces most likely to satisfy their personal aesthetic and create a persona with impact. After all, people—just like brands—have less time to make an impression these days.
Lawrence, twenty-five, of Washington, D.C., says his former girlfriend used to say he was a ‘‘metrosexual’’ because he liked to shop almost as much as she did. Lawrence and Gen Y men everywhere are certainly shopping more—and having a bet-ter time doing it—but they still have something in common with the more senior members of their gender: they spend little or no time browsing, and they rarely make impulse buys, except in the grocery aisles. Unlike previous generations, however, Lawrence is a typical Gen Yer in that he has as many female friends as guy friends. A chiseled, six-foot-three former clerk for J. Crew, he makes up to 40 percent of his purchases on the Internet, with half of that on eBay. At work, Lawrence says, ‘‘Just because someone’s above you doesn’t mean they’re smarter,’’ and in retail he’s true to his brands—Sony, Samsung, and Banana Republic—but only if they live up to his high expectations. He’s in Internet marketing by day, so he demands a lot of his Internet retailers at night: he wants product and vendor reviews, price comparisons, and speedy connections. And better prices than he’s finding at J. Crew these days.
Lawrence and his generation have revolutionized shopping for all of us. Their ‘‘prove it to me’’ attitudes about employers are the same with retailers and brands. For example, those attitudes have contributed to an online shopping experience whose scope of offerings and services mushrooms each year, restaurants that live or die by the comments of consumers—not reviewers—and the ability for anyone to be a retailer through websites such as craigslist and eBay.
