Move Over Gen X, Make Room For Gen Y
By Amy Gilroy -- TWICE, 10/9/2000
DALLAS -- One of the hot topics at MERA's recent Knowledgefest was the fast-growing, big-spending, Generation Y market, loosely defined as young adults ages 16-24.
One speaker addressing the Gen Y market was Bart Deal, western regional sales manager for Stillwater Designs, who gave an overview of the pitfalls and benefits of targeting the 16- to 20-year-old demographic -- which has become "the single largest purchasing group, estimated at $100 billion strong. And with that, our industry needs to start focusing on this group."
Deal said retailers should keep in mind that this group, more than any other, is very brand conscious and that the store itself becomes a brand.
"The store needs to start focusing on creating that brand identity for itself and not just hang their hat on all the brands in the store. Once this demographic locks in on a brand, it's a real struggle to get them to change their mind set," he said, noting that retailers should redirect their ad campaigns and in-store campaigns.
He also cautioned retailers to "stay away from thinking about 'when I was 17.' Today the 17-year-old in one month is bombarded by more media than a 17-year-old 20 years ago was in one year. They are far more savvy about what is going on in the world."
"These kids have an incredible influence on their parents' buying habits," said Deal. "This is all substantiated in survey after survey."
The Stillwater executive also presented an overview of the market broken down by purchasing groups: Consumers age 53 and above account for 26 percent of the purchasing power; baby boomers (born between 1940 to 1960) account for 29.5 percent; Gen X (born between 1960 and 1980) represents 17 percent; and Gen Y (from 1980 to now) is 27.5 percent.
In addition, of the $100 billion in purchasing power represented by Gen Y, 63 percent of that is their own money, said Deal. "That's $63 billion. It's staggering. We have to be targeting these people because they are going to set the trends of the future."
Gen Y was also the subject of a Sony-sponsored presentation by research company Youth Intelligence -- which defines the Gen Y as ages 12 to 24, 60 million strong, and growing twice as fast as the overall population, with more than $250 billion in spending power.
Youth Intelligence also advised retailers to adjust their marketing to this new demographic. The research firm said that Gen X'ers were born in a more depressed economy, and are most likely to come from a one-parent family and to be skeptical about the world. Members of Generation Y, on the other hand were born in a time of abundance, are more likely to come from a two-parent home and tend to believe "everything is dandy."
Gen Y is the most culturally and racially diverse generation and supports individuality, said Youth Intelligence. They are very brand conscious but are still individuals. They are growing up fast because they have financial power, and they expect and want "newer, better, different."
For the retailer, the research firm said, there are three important tenets in marketing to Generation Y: "The customer is evolving and looking for a way to differentiate himself from the crowd. What's hot today, may not be hot tomorrow. And as the consumers and products change, your business has to change with them."
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