Brave New Customer
As baby boomers age out of their prime buying years, there’s a new crop of consumers on the way—multicultural, wired into the latest technology, often dubious of traditional retail outlets and savvy beyond their years. Is your store ready for Generation Y?
While most are nowhere near their ultimate purchasing power at this point, now’s the time to hook into these consumers—born from 1979 to 1999—since they’re big on dealing with brands that speak to them in their language through their preferred channels of communication, screens and word-of-mouth.
Mark Schwanhausser, a research analyst with Javelin Research, recently authored two reports on the impact and characteristics of Gen Y. While geared toward financial institutions, the reports have plenty to say for other retail sectors.
“We forecast that Gen Y incomes will eclipse those of baby boomers in the near future,” he said. Javelin predicts the group will account for 28 percent of the U.S. population by 2018, baby boomers 23 percent, and Generation X (born between 1961 and 1981) 27 percent.
Incomewise, the study said Gen Ys will have $3.39 trillion in buying power by that time versus $2.77 trillion for the baby boomers—and well on the way to catch up with the more mature Gen X’s $4.05 trillion. And while they aren’t in their prime buying years yet, it’s never to early to get a foothold in their mindshare.
AN IMPRESSIONABLE AGE
“Gen Y consumers are at an impressionable stage, and though they are masters of the social network, many still—perhaps begrudgingly—take stock in their parents’ advice,” Schwanhausser said. “That means retailers should devise marketing strategies that aim at parents in more traditional media as well as at Gen Y through modern media.”
Custom integration retailers might also find themselves in on unfamiliar ground when communicating to Gen Y.
“Businesses must talk to Gen Y where they hang—and in their language,” Schwanhausser said.