After Boomers and X's, Here Come the Y's
by Alf Nucifora
We've analyzed and dissected the Boomers ad nauseum. The sudden take-off of the Internet has forced us to address the growing importance of the X-Generation. But little attention has been paid to the tidal wave forming on the horizon, the Y-Generation, that surging youth and teenage market that 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 the Y-Generation run from 5 to 20 years of age (56 million), with particular importance paid to the adolescent, teenage set of 12-19 (31 million). This is the fastest growing demographic group in the U.S. under the age of 65 with estimates of direct their 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 past time with this group, the web is unquestionably their medium of choice. A 1998 Roper Youth Report revealed that 69% of the 6-17 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 that 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). Since most teens have few financial obligations, that $50 weekly stipend can be considered exceptionally discretionary in terms of how it is spent.
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% 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 the teens in the 16-22 age bracket always save a portion of their money. A Merrill Lynch study reveals that 11% invest in mutual funds and as many own stock. A 1998 Teenage Research Unlimited study shows that more than 10% even use debit cards.
How do they respond to marketing?
Outside of Pokemon, which appeals to the younger set, Y's are not yet associated with any universally accepted and easily identifiable brands or icons. That, however, will soon change. Mimicking their Boomer parents, teenagers are equally infatuated with brands. Says Irma Zandl, president of the Zandl Group specializing in trend research for the under-30 consumer, "The number of teenagers 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 the Y's. 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.
Y's believe in subtle marketing from sponsorship of music acts to extreme sporting events. Local grass roots marketing is particularly effective since it allows them to stumble onto the brand in the most unexpected places. Their media campaigns, television in particular, 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 Y's. Abercrombie & Fitch has done it best. What was once a conservative, white-male sporting goods store is now the coolest spot in the mall. From beach scenes to preppy, rebellious behavior, Abercrombie has codified what today's teenager cool is all about.
Dr. Dan Acuff, President of Youth Market Systems Consulting, estimates "That 72% of today's food and beverage purchases are influenced by kids." One suspects that the same high degree of influence applies to a vast array of household's purchases, everything from the family automobile to the brand of ketchup.
Because teens are exposed to so much advertising on the web and in the media so early on in life, they are likely to carry their impressions into adulthood. "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.