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Social Responsibility: Marketing Luxury to Gen Y
Written by Buddy Hobart on July 31st, 2009
There has been a great deal written lately (such as this Business Week article titled “The Leaner Baby Boomer Economy”) about how luxury brands will suffer because Baby Boomers are pulling back on large purchases. Demographics show that Gen X does not have sufficient numbers to replace the buying power of the boomers. Marketers are turning their attention to Gen Y, who has more members than the boomers.
While this is a good idea, Gen Y is not in a position to replace boomers when it comes to $75,000 cars. While Gen Y loves luxury goods and services, Gen Y will not be able to make these big ticket purchases for quite some time. A luxury marketing strategy for Gen Y will need to focus on “affordable luxury”, not on true high end products. Things like massages and upscale restaurants may be pricey and a luxury, but at least Gen Y can save up and afford the indulgence.
A bigger concern I have is for businesses whose TARGET market is Gen Y. There is a subtle shift in Gen Y’s buying habits that should not be ignored. Gen Y has shifted their focus to more value based purchases and are making more conservative buying decisions. Why? The high unemployment rate among Gen Y is only part of the answer, not the entire answer.
Gen Y is a VERY aware group. While one of the prejudices against them is that they are self centered, the opposite is actually true. Gen Y does not believe it is “all about me”. Most (if not all) Y’ers know someone looking for work and struggling. They are AWARE or what is happening, at a very deep level. Even if they can personally afford a certain purchase, Gen Y will hesitate simply because they know that times are challenging. The purchase must not just satisfy their personal need, it must also contribute to some sort of greater good.
This is why I believe marketers who are emphasizing value, versatility and support of causes that will affect positive change will have an edge. One such example is the Thermos Hydration for All campaign that benefits charity: water. Gen Y will not spend their disposable income just because they can. In fact, Gen Y looks to boomers and X’ers for leadership. If these groups are making more conservative buying decisions, Gen Y is likely to follow.
Typical Gen Y
Written by Buddy Hobart on July 28th, 2009
Even though I have had my “road to Damascus” conversion regarding Gen Y, I am amazed at how my prejudices can surface almost instantly. As business leaders, we need to be constantly aware of how easily it is to back slide. Here is a quick story that is almost embarrassing for an author of a Gen Y book to admit.
Last week I was leaving a client location and flying home. My flight left at 7:30am, stopped in Minneapolis, then continued to Pittsburgh. It goes without saying that I was in for a long day.
The night before my departure I talked to the front desk and requested a shuttle ride a 6am. Before turning in, I confirmed the time. The next morning, when I went to the lobby at 5:55, I was told the shuttle driver had not arrived yet. A few minutes later I saw a young man (Gen Y’er) enter a side door. His shirt was un-tucked, his tie was undone, and it appeared he had just woken up.
My IMMEDIATE thought was “typical Gen Y……..how could he be late and make an already challenging travel day even worse? Must be a slacker.” My prejudices took over and my thoughts were negative.
Now, here is the REAL story. My driver had not been informed of a 6am ride, and in fact his start time is 6:15. The night manager (not a Gen Y’er) had forgotten to tell him about an early departure, even though I confirmed it twice. My driver had, in fact, come in early, just in case there was an early departure! It gets even better.
When he did meet me in the lobby to take me to the airport, his shirt was tucked in and his tie was tied. He was as polite and professional a hospitality employee as I have seen in all of my travels. To top it off, he is getting his college degree in the afternoons and evenings. He works this job because he can earn his tuition by working a 6am to noon shift. From there it is off to school and the library. Most nights he is back home by 10pm, after a visit to the library. The only part of my original misguided thought process was that he HAD just woke up, but not because he had “partied” the night before. He did not get home from the library until after 11pm.
The lesson here? It is important to be self-aware of how prejudices, though dormant, can cause even the most gen y friendly manager to react in a way that is unfair and inaccurate to the situation at hand.
Gen Y Stereotypes
Written by Buddy Hobart on July 28th, 2009
When we set out to write Gen Y Now part of our process was to conduct leadership seminars around the country for business leaders and their managers. As our folks talked to business people to attend the seminar, we heard some very similar and common responses. Much of what we heard could fall into the ‘and this too shall pass’ category. For the most part, in 2007, business leaders were not aware of the need to consider the differences and opportunities Gen Y employees present. I don’t think that is the issue today.
It is hard to pick up a national or local publication and NOT see an article about Gen Y. Business magazines, employment papers, marketing gurus and just about everyone else is now at least TALKING about the differences. There seems to be a greater awareness to the issue today than when we first started to write the book. However, I have some serious concerns about how that awareness has been gained and how many publications are presenting Gen Y.
Over the past 3 months I have seen literally dozens of negative articles and cartoons exploiting the prejudices of Baby Boomers and Gen X toward Gen Y. This negative positioning is not helpful to business leaders as they try to create their strategies for growth and recovery. Gen Y will be a critical part of the recovery, and having a negative view of what they bring to the work world will not speed up the process of creating a useful solution.
As an example of how the negative stereo types are presented, a recent national weekly magazine ran a story of Gen Y and focused on their sense of entitlement and “self indulgence”. The article talked about a generation that has had $100,000 sweet 16 parties. There was also a photo of some “20-somethings” having fun at a nightclub. The photo was designed to drive home the point that this cohort is out of control.
In the following days after seeing the article I had an opportunity to talk to several business forums across the country and conducted an informal survey. I asked “has anyone here held or attended a $100,000 sweet 16 party”. Not only was the answer no across the board, the rooms (mostly made up of successful baby boomer business people), laughed at the idea. My point here is this….I am sure SOMEONE has held six figure parties for their children, but it is not the norm. (In fact, who is to say the 16 year old recipient of the party even wanted it!) I am concerned these rare examples are being presented as the norm and playing on our Baby Boomer prejudices.
On a final note, we need to also be careful of the images we are presented about Gen Y. The photo I referred to in the article did not show Gen Y in a good light. They were partying, holding drinks and “acting the fool”. A week after I saw the article a friend of mine held a 50th birthday party. For the most part the party was a “dry affair” and we were by no means intoxicated. The photos I received after the party made it look like we were out of control…having the nerve to laugh, joke and clown around with friends! The nerve of us old folks to have fun! Many of the photos could easily been taken out of context and presented in a negative light.
Business leaders need to guard against these stereo types and avoid having an entire generation of talent branded negatively.