In Gen BuY: How Tweens, Teens, and Twenty-Somethings are Revolutionizing Retail, consumer psychologist Kit Yarrow and reporter Jayne O'Donnell argue that today's young shoppers differ from their predecessors. They've come to expect top-notch customer service such as free shipping and easy-to-navigate websites, and they're drawn to lifestyle brands that help them define and project who they are. While their tendency to constantly update their wardrobes and own the latest gadgets can sometimes seem materialistic, the authors say it is more a function of having so many choices. I recently spoke with Yarrow about the book's findings. Excerpts: (Full disclosure: I am briefly quoted in the book.)
What are the main ways Generation Y consumers differ from their parents?
There are two main differences. First is technology. Though people of all ages have embraced technology, Gen Y grew up with it. It’s embedded in their psychology, so much so that I call it their third hand and second brain. Among other implications, they get bored more easily and are attracted to higher levels of stimulation than older generations. And they’re highly attuned to visual symbols—be it their own appearance or through association. As consumers this means that they want faster product turnover and require more personally relevant and high impact messaging and promotions.
Second, they’re more confident than other generations were at their age. Having grown up in more child-centric households, a youth-oriented society and with the self-esteem movement popular in schools, they expect their needs to be considered. And they’re more empowered to move around or influence systems that aren’t meeting those needs.
As consumers, this means that Gen Yers have high expectations. Unlike other generations, they’re also eager to engage. They’re more likely than older generations to want to design their own products, get involved with messaging through their own networks, rate products and advise companies. It’s a huge opportunity for marketers to create more relevant products and more interactive marketing platforms. Companies that don’t will learn the hard way that Gen Y also uses technology to go around existing hierarchies.
Which brands are most successful at reaching out to them, and why?
Brands that are engaged with Gen Y, that understand their needs and tastes, and that champion and empower them rather than themselves will do best. This is a generation that’s accustomed to being known, so understanding them psychologically is really key.
A favorite example is Samsung’s “Extreme Sheep” video. While sheep don’t seem to have much to do with Samsung - the video, which showcases some amazing sheep herding, implies by association Samsung’s excellence and creativity. The messaging is subtle, the sheep are wearing LED lights and Samsung sponsors the video. It’s effective because it’s a gift of sorts—one that consumers could send to others—and because Samsung is now emotionally associated with jaw-dropping expertise. Millions viewed that video in the first week it was on YouTube, and now five months later it’s at nearly 10 million views.
A retailer that’s got it down is Hot Topic—they’re fantastically dialed into and associated with what teens are relating to culturally, be it music or “Twilight.” They sponsor events and host promotions and because of that they’ve got “insider” status. Plus they’re selling products that teens can use to show others who they are.
Did the recession impact your findings?
Gen Y’s confidence has bolstered them during the recession. The majority of Gen Yers I interviewed were much more concerned about their parents than themselves. Fear is what causes people to reduce spending and Gen Y, partly because of their psychology and partly because of their age, is feeling it less. Though they have reduced their spending, it’s been less so than other generations.
Nevertheless, when I started researching Gen BuY two years ago there was much more exuberance around reckless spending and far less financial literacy than I’d expected to find. Today, those things have changed. Because of the recession I think Gen Y will be more sophisticated about money than they would have been otherwise and have healthier financial lives.
Stay tuned for part two of the interview tomorrow.