Brand Disloyalists?

Generation Y’s “Echo Boomers” reach spending age. So how do you get them to spend?

Whether you know them as “Echo Boomers,” “Generation Y,” or the “Millennium Generation,” nobody debates that the population of more than 60 million Americans born during the so-called “baby bulge” is a marketing force to be reckoned with. Between 1979 and 1994, post-war “Baby Boomers” and their younger “Generation X” siblings settled down and started having babies; consequently, Echo Boomers rival their Boomer parents in sheer numbers. In many ways, however, they react to products and product marketing differently than do their older counterparts. NPD asked its panel of experts to weigh in on Echo Boomers, to provide NPD Insights readers with further explanation about what sets Echo Boomers apart from previous generations of consumers.

Discovering ‘Y’ – Echo Boomers Begin to Buy

“There are a few points that you must understand before you try to market to teenagers,” said Harry Balzer, vice president of NPD Foodworld. “First, they are not like you; second, they will do what they want to do, not what you want them to do; and perhaps most important, they trust nobody over 30. Sounds a bit like every generation, doesn’t it? As with most blanket descriptions, though, it takes some data digging to define the salient differences.”

Compared to Baby Boomers, Echo Boomers are more racially diverse, are more likely to grow up in a single-family household and -- unlike Boomers and Generation X -- they more often than not have working mothers. In addition, for those who are raised in traditional, two-parent households there is a strong likelihood that both parents work, whether out of necessity or by choice. These and other socio-economic differences set Echo Boomers apart from preceding generations. In fact, these differences are doing more than just causing a shift in national demographics.

“The leading edge of Generation Y is now pushing its way into the marketplace, and these consumers are proving to have a tremendous impact on the way business is being handled in the appliance and housewares industries,” said Peter Greene, vice president and general manager of NPD Houseworld. “This generation is armed with its own ideas, opinions and values, so manufacturers and retailers are forced to quickly learn that the first step to reaching this powerful consumer market is to acknowledge that they are not the same type of consumers that their parents are.”

"Generation Y consumers have certainly become one of the most elusive groups among toy manufacturers today," said Michael Redmond, senior industry analyst, NPD Funworld. "Young children and teens have been moving out of toys at a faster clip than we have seen in years and toy manufacturers are starting to take notice. There has been a perception for a number of years now that kids are getting older younger. This trend is beginning to affect kids’ play patterns and the kinds of toys they play with. For example video games are increasingly seen as a potential threat to time spent with traditional toys."

Focus on Price and Features

Unlike Boomers, and to a lesser extent Generation X that preceded them, Echo Boomers often puzzle traditional marketers. Specifically troubling to many marketers weaned in a brand-centered world is the fact that they demonstrate very little brand loyalty. This is not to say that there aren’t any Echo Boomers with allegiances to specific brands, but rather that brand loyalty is not as strong overall as it is among older consumers. Consequently, companies that once held an edge over their competition simply because they held widely known and popular brands may feel pressure from new companies entering the scene that are being made popular by the Echo Boomers.

To compete for Echo Boomer dollars, many manufacturers and retailers have had to refocus the ways in which they position and market products geared toward this exceedingly independent consumer segment.

“Teenagers, who comprise the majority of this generation, are very price- and value-conscious,” said Timra Carlson, president of NPD Beauty. “With limited dollars to spend, teens now seek out the best value their money can buy. Like their adult counterparts, teens’ price-value relationship is beginning to affect the fragrance industry. Today, 84 percent of teen boys and 93 percent of teen girls wear fragrances; this age segment remains a vital demographic of the fragrance industry.”

Peter Greene echoed Carlson’s remarks: “According to NPD Houseworld consumer data, price and features were the two leading purchase motivators for Echo Boomers who purchased small and major appliances,” he said. “Because brands don’t matter as much to Echo Boomers, more and more manufacturers are rolling out new brands and product lines that are specially designed to meet their the needs and wants.”

Marketing to a Jaded Generation

In addition to the products themselves, NPD experts agree that the way in which they are marketed and distributed is often equally important in capturing the fancies of Echo Boomers. Bombarded by product advertisements since birth, Echo Boomers thumb their noses at print and television advertising that boasts image and celebrity as a primary means of selling. Instead, these consumers are more apt to respond to ads that incorporate humor and irony. While print and TV media are still considered important tools in reaching this generation of consumers, the role of the Internet as a marketing medium has become equally as -- and in some instances more -- effective in targeting Echo Boomers.

“More than any other generation we’ve seen, it is critical to speak the language of this unique group,” said Marshal Cohen, NPD’s chief industry analyst. “They want to be spoken to in their language, and they want to be educated, not sold. They’re growing up with ubiquitous marketing. Plus it’s important to remember that they have more information at their fingertips than their parents had in a library, so they can more easily do their homework and shop informed.”

The difference between 10 and 25 is greater than you think

Given the age range between the youngest and the oldest Echo Boomers, it is fair to say that segments of this generation react in myriad ways, just as the entire generation impacts each industry differently. For example, in the appliance and housewares industry, older Echo Boomers have the most influence on products brought to market. Echo Boomers now penetrating the appliance and housewares markets are the ones who purchase personal care items, such as shavers and hairdryers. They’re also stocking dorm rooms, joining bridal registries and setting up their first apartments and homes.

“Peer pressure and acceptance drive younger teens' taste in fragrances, as they are more attracted to scents from perceived hot brands or fragrances their friends use,” NPD Beauty’s Timra Carlson said. “As teens mature, attracting the opposite sex becomes more important and they begin to gravitate toward scents perceived to be sexy or romantic. As Echo Boomers get older, it will become increasingly important for marketers and retailers to deeply understand and appreciate this young group's shopping behaviors and motivators, in order to attract and maintain their loyalty.”

Harry Balzer concurs: “As Echo Boomers pass through their teens and young-adulthood, we can not always expect that their behavior will be too different from previous generations’ at the same age. It’s a safe bet that they will eat pretty much the same foods their parents eat, though they might just pick brands they feel reflect the values and attitudes of their generation. And that is the real task for marketers to remember: They still don’t trust anybody over 30.”

For more from our Industry Experts, visit the NPD Worlds . . .

www.npdfashionworld.com
www.npdfoodworld.com
www.npdfunworld.com
www.npdhouseworld.com
www.npdtechworld.com