Compared to previous generations, Generation Y (1982-1995) has some very different habits that have taken the marketplace by surprise.
One game-changer in particular: Generation Y doesn’t seem to enjoy purchasing things. From cars to association memberships, jewelry, and non-light beer – Gen Y just isn’t buying.
For many brands and companies, this is their worst nightmare. They desperately need to convince America’s largest population – 80 million 17 to 30 year-olds – to buy. But Generation Y is hanging out there, living “in the cloud” (that digital space where media, internet, and entertainment reside), seemingly content and unfazed by most marketing attempts.
Gen Y is unique from other generations in the buy-sell continuum for other reasons, as well. For example, this generation:
- Trust their peers first and their parents second;
- Hates to be sold anything;
- Actively researches prices and reads reviews before making a purchase;
- Expects exceptional service, like Amazon.com which tells them which products they might like;
- Seeks to do business with ethical, environmental companies; and
- Values customization, customizing everything from their music to their jeans and soda.
So it’s time to face facts:
- Old-fashioned marketing won’t reach this generation that spends $200 billion annually. Gen Y ignores advertising and prefers a grassroots effort, such as hip events, viral videos, social media, student fans, and street teams.
- The balance between supply and demand has been altered and the value of owning “stuff” has diminished. The value now lies in the doing.
Today, a product or service is powerful when it connects people to something or someone else. As leaders and entrepreneurs, we can use this knowledge to our advantage. We just have to think about the “stuff” we sell in a slightly new way.
Here’s what motivates Gen Y to buy (and what has started to influence the rest of us, as well):
Empowerment
Gen Y wants to do something important with their purchases. You’ll notice this sentiment in Apple’s commercials, which depict ways people use products to do amazing things like curating music, crafting three-dimensional spreadsheets, or using FaceTime to call loved ones.
DO THIS: Explain how your product or service makes people’s lives better and make the message as simple as possible. This is an instant gratification generation; simplicity is essential.
Connectivity
Many times the joy of having something isn’t in the having, but in the sharing. When we share something we like with people we like it creates a bond, and this is especially meaningful to Gen Y.
DO THIS: Find ways to connect people to other people through your business. Sales isn’t really about selling anymore, it’s about building a community.
Causes
Perhaps Gen Y’s disinterest in buying cars has little to do with being anti-car and a more about being environmentally conscious. Gen Y is driven by the desire to make a difference.
DO THIS: Connect people to something bigger than themselves through your product or service. A bigger impact is almost always there, we just tend to forget about it or fail to market it.
A lousy economy and rapidly changing technology is likely changing every generation’s buying habits. Chances are, we’re all spending less on physical products.
Maybe that’s a good thing. Maybe our focus is shifting off the material things and onto the more important things, like relationships, quality of life, and a creating a better world.
In that case, we can thank Generation Y for giving us a message worth marketing.
About Sarah Sladek
I love this, thanks! I totally resonate with this article: we are a values-based generation, and we hate being pandered to. We are doers, not stuff collectors, and our eyes are glazed to the advertisements that have saturated the world around us throughout our lives.
The commercials that get my attention? They have great music or elicit emotion (usually using intelligent humor or human connection). I want to say, “wow, that’s a great marketing team they’ve got”. You’re right in pointing out Apple: they eliminate background completely, simulate your own use of the phone, add music, and show you all of the great features that make life more efficient and connected. This new Google Commercial does the same thing: http://www.youtube.com/watch?v=w1sT7QV8nfU. What a tear jerker!
Getting to Know the Millennials. A piece I wrote after attending a conference where the speaker was COMPLETELY out of touch with this generation. I was shocked that the VP of a huge and successful consulting firm could be so far off base about all of the workers coming into the workforce. They need a Sarah Sladek.
http://thefirstyearentrepreneur.com/millennials/
Gen “X” (my generation) was about collecting and accumulating. The next generation (as is often the case) is pushing back against that.
I teach Millenials and they are quite different. I put a great deal of hope in the future because I like what these folks (I almost said kids) stand for.
Interesting article! My daughter is at the very beginning of gen Y so may not be as completely typical as those born in the later 80′s. Still, much of this fits for her just maybe not to the extent. Plus, obviously, there are always exceptions. Having said that I think generally speaking your assertions are so true. The first thing that comes to mind regarding the lack of purchasing is that when many in this group came into adulthood after college the economy was tanking. They had to adjust and put their focus elsewhere. Of course, this is only one aspect and there are many other factors. In some ways it reminds me of those who came of age in the 60′s and early to mid 70′s as far as wanting to make a difference, not buying just for the sake of acquiring things etc. The big difference is technology of course but I think it’s great that rather than allowing technology to isolate they are using it to connect. However, I see such extremes in this group. On the one hand you have those your article so accurately describes then you have those Gen y-ers who are just the opposite and think if you aren’t wearing red bottom shoes there is no point. For that group expensive trends and spending on appearance in general win out over rent every time! I find these two extremes curious. Thanks for a thought provoking piece and I’m going to now look into more of your writing.
Hello Sarah… Love your post because the three things you mentioned they do buy, empowerment, connectivity and causes is what associations use to hang their hat on. People joined because they knew they were better together than separate. Along the way, the back end of the baby boomers and gen-x started demanding value for their dollars (ROI).
Now Associations can get back to creating revolution around an emotional cause instead of “if you pay the dues, you will get back $xx in savings or benefits.”
I do differ in that Gen-Y isn’t connecting of buying memberships. They want to be engaged by the association in their field of interest and they want to join for the 3 things above. The problem is many associations haven’t figured that out.
We have seen an amazing influx of a new breed of younger leaders penetrating our committees, leadership and programs because we are taking time to engage them in a way that excited them. They are joiners. They want to connect face to face and they need the resources of an association. The associations just have to go get them and not sit back on their old habits.
Being a generation Y person I can tell you most of your assumptions are wrong.
“Trust their peers first and their parents second”
This is a statement that can probably be said for every generation for the last 100 years.
“Hates to be sold anything”
Another statement that can be said about any generation.
“Actively researches prices and reads reviews before making a purchase”
While Generation Y might be the first that really benefited from this pretty much all consumers do this now.
“Expects exceptional service, like Amazon.com which tells them which products they might like”
Everyone wants exceptional service again not a generation specific thing.
“Seeks to do business with ethical, environmental companies”
I call BS on this. I do not know of anyone in the Generation Y age range that is any more environmental than anyone else in any other range.
“Values customization, customizing everything from their music to their jeans and soda.”
Here you might be some what right but haven’t people been customizing things since the first consumer product was made?
Generation Y is not some new enlightened group that are special. Marketing evolves and the market as a whole changes greatly, not specific age groups.
Phil -
I agree with this statement you made: Marketing evolves and the market as a whole changes.
But I don’t think you understand how unique your generation is in comparison to other generations. Allow me to explain.
‘Trust their peers first and parents second.’
Boomers respected their parents above anyone else, as did the generations that came before them. Along came the Xers and that relationship paradigm shifted. Dramatically. As youth, Xers didn’t respect their parents and certainly didn’t trust them. They were the first generation of ‘latchkey children’, largely unsupervised and raising themselves, and became quite rebellious. Pop culture reflected this shift in trust with many songs and movies dedicated to the Xer movement away from hierarchy and authority and rebellion against their parents. Parents have been out of the picture for an entire generation, but that’s not the case with Gen Y.
‘Hate to be sold anything’
Xers and Ys are the first generations to not respond to traditional advertising and marketing tactics. Before you were born, telemarketers were calling all hours of the day and night trying to sell products. And in the beginning, it worked! So did newspaper advertising, direct mail, and door-to-door vacuum sales. But Generation X came along, with their distrust for hierarchy and authority, and they didn’t respond to sales and advertising. In fact, they were repulsed by it. Add in technology, and your generation is especially marketing-savvy. You were born as very smart, educated consumers capable of learning about products online and referring products and brands to friends. Like Xers, your generation seeks authenticity and isn’t swayed by false advertising and sales gimmicks. Sales has evolved into something else entirely for everyone — but that’s because younger generations stopped responding to it, became educated consumers, and forced change to occur.
‘Reviews’ and ‘Service’
Yes, we all want great service and more people are reading reviews. But intuitive technology-based service didn’t exist when other generations were growing up. It didn’t even exist 15 years ago and neither did online reviews. There is a distinct difference between adapting to technology and being raised with technology. Your generation is accustomed to a high level of service and online consumerism because you’ve never known life without it. The rest of us have adapted to the technology and we may use it and like it, but we won’t be as quick to notice when a company fails to deliver on it. That’s what makes it more important to your generation– because you’ve never known life without it.
‘Ethical, environmental’
This isn’t BS. Numerous studies have been done on this topic and they all have generated the same results — Generation Y does considerably more business with companies that ‘do good’ than any other generation. That’s not to say the rest of us don’t care about supporting ethical or environmental companies. It is to say that for Generation Y consumers, it is an important factor that drives their decision to buy.
Thank you for sharing your opinion, Phil! It’s good to read different points of view on the subject.
What you are describing as attributes of a specific generation are really attributes of an evolving consumer market. None of these characteristics are unique to Gen Y. Every one of the attributes you apply to Gen Y apply to me and most of my peers and we are in our 40′s.
The old ways of marketing and motivating need to evolve if companies want to reach just about anyone – it’s not specific to any one generation nor has it been caused by one generation.
I agree, Jim. Marketing has evolved. But it has evolved as the direct result of economic decline, rapidly-changing technology, and generational shift.
Gen X (your generation) started the shift, tuning out telemarketing and aggressive sales approaches, and buying fewer cars and jewelry and many of the ‘staples’ that previous generations valued and purchased. The only thing that Xers did have in common with Boomers was the purchase of ‘McMansion’ houses in suburbia. So it’s no surprise that you don’t relate to the shifts that I mention in my blog; that’s because you are part of the shift.
Retailers didn’t really sweat it until recently, though. Generation X is a small generation (48 million) in comparison to the Boomers (78 million), so retailers held out hope this was a phase that Xers would outgrow and the following generation would buy into what they were selling and how they were selling it.
No such luck.
Generation Y (80 million) isn’t buying cars (the automobile industry has seen the worst decline in history) and they aren’t buying houses either. They rely heavily on technology when it comes to purchasing decisions and commerce. They take the recommendations of their peers under serious consideration and the brands that do appeal to them are usually cause-oriented or have grown organically with limited advertising efforts. In other words, Generation Y is a continuation and expansion of the shift that Xers started. The difference is this shift has been fueled by technology. In any case, there are entire companies and industries threatened by the lack of Gen Y’s interest in their products and marketing efforts.
Young America is a powerful indicator of trends and they tend to influence the consumerism process for every generation. That’s a cycle that’s been in existence for the past 80 years.
So indeed — retail, marketing, and sales have evolved for all of us. And a significant portion of that change has occurred because younger generations don’t share the same values, interests, and expectations of the generations that came before them.
Hi Sarah. Interesting article. I’m a little late getting here, as I see it was posted about six months ago. Can I ask what the sources of your information are regarding the behavior of Gen Y as it relates to purchasing? Do you have specific research that you can point to that this is based on? Thanks.
Hi Alan,
XYZ University’s area of expertise is focused on studying generational behaviors, influences, and values. We actively study what organizations and industries the world over are doing to engage younger generations. Our team also conducts research, including interviews with experts, conducting surveys, and reviewing demographic studies and research published by universities, organizations, authors, and media. If you’d like more information on this particular topic, check out our latest white paper –Getting Gen Y to Buy — which is now available for download and cites information drawn from a variety of sources. Thanks!