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Beware the New Kids in Town
November 5, 2013 - Ernest Hohmeyer
I probably should not announce this publicly, but I received an invitation to join the AARP the other day.
Wow, they start early. Don’t they know it was just yesterday I graduated from Saranac Lake High School and we were all listening to the new rage: Cassette tapes? How come I can’t buy those bell bottoms and what about my long hair?
Actually, where DID my hair go? It was probably my father getting back at me for growing it so long and lacing my shampoo with weed killer. I never could figure out why the weeds multiplied around our house with all this stuff lying around while my head started looking like a sand trap in the middle of a putting green.
The Old Guard
Yes, I am part of the baby boomers (born circa 1946-1964), long known as the driving force to our economy. We buy the cars, the homes, have families and go on vacations. What a powerhouse we are and you know our traits and spending habits.
But are we still?
And, who is “Gen X” and do I know “Gen Y”?
Do I really know THEIR buying habits, “likes” and preferences?
In this age where marketing is becoming increasingly personal and where we are spending gazillions avoiding “advertising” do I have an appealing message to THEM?
Just as my generation went through the Viet Nam War, the world of 2 giants starring the Soviet Union and the U.S. and where we were brought up “to live better than our parents,” it all shaped how we lived and played.
Many of us thought it was right to want more. Wasn’t that what the American dream was about?
The same can’t be said for Gen X or those born circa 1965-1981.
“Generation X Has Suffered Massive Loss of Wealth” was a title in the Huffington Post. These folks “were trying to build families and gain financial security” author Khadeeja Safdar states. “Many put a larger share of their assets into homes, which drastically fell in value as the housing bubble burst.”
A Forbes online article “Approaching Mid-life, Are Gen-Xers Doomed?” makes this interesting analogy: “If the Baby Boom generation was an overall positive for the market, spending money with reckless abandon and earning more year over year to encourage it; Generation X exists in a nickled and dimed America with stagnant incomes.” Contributor Kenneth Rapoza writes this generation is “leveraged,” and to be successful may have to live by “everything in moderation.”
While these articles point out that all of these generations are quite diverse and to be cautious about making too many conclusions, it does help to understand some of these perspectives.
As parents we all know that our kids think differently than we do just like our parents said the same about us. I often need to talk differently to my kids than my parents did to me to be able to “relate to them.”
Our kids and their kids are the new customers.
We may need to know a little about them to understand what motivates them to travel or to spend money here.
Generation Y is different still.
I ran across a USA Today article “Gen Y is Finally in a Mood to Buy.” Focusing on housing, their caption begins: “And their views have the power to change the American dream.”
“They are a generation that’s about 90 million strong” writes Haya El Nasser. “Millennials form the largest demographic wave in the nation’s history – even larger than the Baby Boomers.”
Barron’s had a similar article entitled “On the Rise.” There is interesting commentary here by author Jacqueline Doherty: “Industries from housing and autos to retailing and financial services could be transformed by their collective demands and desires…”
“They've known two U.S. wars,” Doherty writes, “mass shootings, terrorist attacks, the financial crisis, and the lean years since, which coincided for many with their graduation from college and frustrating attempts to launch themselves into adulthood and careers.”
According to these articles, Gen Y appears to better educated, tech savvy and interested in saving.
“They grew up in an era when children were rediscovered,” Doherty states. “That alone separates the new generation from Generation X, which grew up as divorce rates soared.” Doherty quotes sources that “Gen Y, on the other hand, "is sheltered and expects to be sheltered…”
The New Force
How do these preferences affect what we have to sell both as a region and as a business? Are the feelings of being “safe” important to these new generations? Is their definition of value always related to cheap?
As I posted several weeks ago, do we even need to consider how we communicate with them? That they may be more comfortable with automated and on-line conversations than talking with us?
The Barrons post talks about how “the Millennials are connected -- to the Internet and each other. They brought us Facebook and popularized YouTube, Twitter, and phrases like 24/7, which describes how much time they spend on the 'Net and personal electronic devices.”
Retailers like Macy’s “plans to use more technology in stores and online to create a "fun" and convenient shopping experience that it hopes will attract and retain Gen Y customers” Doherty continues in the Barron’s post.
“Banks and money managers aiming to woo this generation must embrace technology, as Citigroup is doing by opening branches with media walls that display news, local weather, and event listings. Financial advisors pursuing the Millennials need to brush up on blogging and Webcasts” Doherty explains.
And is it just the economy that is pushing younger buyers toward fuel-efficient vehicles?
Community Meeting on Trends?
In order to woo the younger generations for our volunteer clubs and emergency services do we need to attract them from a different perspective?
It might make an interesting meeting, perhaps hosted by our North Country educational institutions on how we can take advantage of these new economic “blocs.”
It’s not a question of thinking about understanding that these spenders are for some time in the future, their impact on our communities and businesses is now.
They may be changing to as they get older, becoming empty nesters and beginning to think about fixed incomes. It is already happening to us here in the Adirondacks with an aging population and its ramifications on buying and the need for essential services.
It is another indicator that you need to constantly track your customer and to assume nothing. What Baby Boomers care about and how they spend their money may be changing.
The new kids on the block may have different “hot buttons.”
Know thy customer.
Now about that invitation….I think it was meant for my neighbor...
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