This article is reposted from the July 21, 2010 edition of National Jeweler and is written by Jan Brassem.
Prepare yourself, jewelers. Here comes Generation Y (aka Gen Y), 74 million big-spending consumers, born between 1978 and 1995, who inspired a recent Gen Y Forum purported to be “the largest gathering of prestige marketers in North America.”
The forum’s official goal was to discuss the “characteristics, influence and brand affinities of tomorrow’s affluent consumers.”
In other words, the aim was to determine how Gen Y consumers make buying decisions–an ambitious task indeed.
In case you didn’t know, the 74 million Gen Y members purchase, directly or indirectly, $200 billion worth of goods or services a year, five times more than their parents did at the same age.
There are now more Gen Y members than there are baby boomers, and this demographic will represent 50 percent of the total U.S. workforce by 2015. Oh, did I mention that within the next five years, the Gen Y consumer will provide the biggest revenue source for any industry you can name?
The forum consisted of 22 thought-leaders from diverse fields, including a bureau chief for The Economist, the publisher of Teen Vogue, the chief of digital marketing for Microsoft and a member of the U.S. State Department, among others.
All of these “rainmakers” agreed that Gen Y members are technologically sophisticated shoppers who were probably using computers before their first day of school.
The computer became the “training wheels” for this group, which is often called the “Internet Generation.” It was also clear among the forum leaders that the technologically adept Gen Y consumer would make purchasing decisions using high-tech tools.
In a nutshell, here’s a rundown of some of the important points discussed. (The college marketing students I teach will wrestle with the rest.) Much of the information discussed at the event is the result of extensive U.S. and international market research.
Speedy decision-making: “Business will be as usual, but much faster,” was a common theme at the meeting. Simply put, the shopping process goes something like this: They click, they browse, they buy. It will be the retailer’s responsibility to keep up.
Design trends: Product design can no longer be developed by committees, research teams or in staff meetings. Such groups take too long to reach consensus, and styles change too fast. What a company should do is develop a network of blogs and tweets to inform styling decisions. Besides being inexpensive, these interactive forums allow for speed and dexterity.
An investment: Gen Y consumers see luxury products as investments, not as indulgences. They do not have an appreciation for “trendy” styling, and favor more “classic” designs. When they purchase an item, they generally use it. (It will not be placed in a drawer.) They expect exceptional quality.
Parents as reference: These young consumers consider themselves to be “equal opportunity buyers,” with an unspoken motto that “We buy the same as our parents, except … we want more.” Heritage plays no part in design, styling or reference decisions. While their parents considered luxury to be something special, Gen Y consumers understand luxury as something that they deserve.
Bling is blung: Ostentation is clearly out, and subtlety is in. Gen Y jewelry consumers seek simple designs that are cool, hip and “in the know.” Some visual expression is important, but it is not key.
Purchase rationale: Gen Y consumers have a need to add an emotional rationale to their buying decisions. For example, when purchasing a pendant, the shopper requires–as a rule–an additional use for the piece. She wants to be able to wear it to work, and to a party.
Reference groups: Positive feedback, (real or imagined) from their reference group is arguably Gen Y’s most important decision criteria. Whomever their peer group is–be it colleagues, friends, or fellow club-goers–acceptance by that group will close the sale.
Sale vs. deal: Beware of putting items on “sale.” Gen Y consumers consider that word to be the radioactive kiss of death. They strongly prefer the word “deal” as a way to communicate bargains or price reductions. Getting a great deal sounds–to their ears, anyway–better than getting something on sale.
Blogs and more blogs: The new–and hopefully permanent–Internet-based marketing vehicle is the blog. The blog is inexpensive to set up and maintain and its uses are abundant. Almost in unison, the thought-leaders at the forum expressed the conviction that blogs were the marketing tool of tomorrow–if not today. To be a successful Internet “player,” your store or site should be called out on a minimum of 25 blogs today and at least 250 in the future.
For those who are not Gen Y members, your knowledge of technology may be strained. Mine was. It is our job to become current in this technology and understand the negative marketing implications if we don’t. Let’s face it, we could end up in the same category as hand-held calculators and in-store flyers.