The idea of naming generations really didn't come along until the mid-20th century, when the Baby Boomer generation was christened. Before that time, the idea of cultural generations of 15 to 30 years in length was talked about mostly in academic circles, but without the clever nomenclature. Since the Boomers came along and changed just about everything, social scientists have gone back and named all the generations in the 20th century and on.
Television anchor Tom Brokaw told the story of those who fought in WWII and called them the Greatest Generation. They got home from the war and began having children at an unprecedented rate, which brought about the Boomers. Then came Generation X, who more or less filled the gap from the end of the Boomer births in the early 1960s to the start of the Millennials, which began in the early 1980s or so. None of these dates are too firm, but we all identify with one of these generations.
Gen X drew the short straw, since they came along post-Boomer, were smaller in number, and pretty much got marketed to along with the Boomers. Nothing changed for them, and few studies were done trying to understand this generation, mostly because the Boomers were in their prime earning and spending years, so there was no compelling reason to shift gears in marketing terms.
With the Millennials (aka Echo Boomers or Generation Next), that perspective has changed considerably. As the Baby Boomers move into retirement, they still control more than 70 percent of the nation's disposable income. But the outlook is cloudier now than it was 10 years ago. It used to be that when the target market hit 50, the marketers switched off and began looking at younger consumers. To do so today is to walk away from a lot of discretionary income, so the old tactics don't seem to apply.
At the same time, the Millennials are a force for change. Born between about 1980 and 2000 -- depending on the source -- Millennials are about 80 million strong, with about 50 million over the age of 25. By 2020, more than 64 million will be 25 or older; that age is important because it historically is the jumping off point for higher earnings. Typical median income jumps by 60 percent at 25.
For the retail marketer, all of this is interesting, but it doesn't necessarily help with determining the right approach that will appeal to Millennials while not alienating the Boomers. The shift of spending power will take at least a decade, slowed down by the fact that more Boomers are staying in the workforce longer, and the sluggish economy isn't growing at a rate anyone would like.
The first step is to be careful about generalizations. While we know that the Millennials are different than Boomers, slapping any sort of behavioral stereotype on a group of 50 million people is risky. Looking at trends is helpful, but the best bet is to use data to its fullest extent.
Millennials have been labeled as less brand loyal and more price sensitive than their older counterparts. Much of this may be simply an outcome of the recession; brand-switching and price sensitivity are more prevalent now with people of all ages as they attempt to navigate the economic doldrums. Tactics that aim to address these needs may be effective across the board, which is obviously a positive thing.
Still, what is the right approach for appealing to Millennials without resorting to a one-size-fits-all scheme and without driving the Boomers away? Here are a few ideas to get things started:
Use data -- the more the better
As the first generation that grew up with the internet and all things digital, Millennials are comfortable with data and its various uses. Most folks these days know they are being tracked and analyzed in their online behavior; as long as there's some reciprocal value, they are willing to give access to their personal info. Bottom line: If you have a loyalty program, use it. If not, there are other ways to track shopping behavior for online and brick and mortar. This is a critical element for any marketer going forward.
Keep things simple
Don't overwhelm your audience with information or choices. Two or three options are usually enough, if they are the right ones. Again, data will help in the selection process here.
Keep your messages new and interesting. Things go stale quickly today, and the last thing you want is for your marketing message to be "so 15 minutes ago." Change things up frequently, but maintain the overall strategic message.
Rewards are both expected and appreciated. As a corollary to the first point above, use data and provide rewards to those who share information. This means relevant, timely, and of value. Ongoing rewards help to create new habits with shoppers, and once those habits are formed, they are likely to continue.
Focus on the emotion
It's more than just price. We like to tell ourselves that we are rational creatures, driven by data and our intellect. But in reality we are mostly slaves to our emotions, and the best decisions are those that appeal emotionally while allowing us to support them with fact-based rationale.
These are all very high-level ideas to get the ball rolling -- how these are executed will depend on the data and the audience. The major point is that there is no one best answer and no "silver bullet." Millennials are a huge market, to be sure, and while they are different from the Boomers, they share a desire to be seen as individuals. The single most important idea is to take steps that allow for as much one-to-one marketing as possible.
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"Composition of portraits of different young people" image via Shutterstock.