While this study compared and contrasted the post-recession spending habits of Boomers, Gen X and Gen Y, it prompts a discussion of the retail reality that has shaped Gen Y and how changes to the process of marketing and selling will accelerate as Gen Y's financial influence grows.
While the Internet doesn't quite represent a perfect market where individuals have perfect information and benefit from perfect competition, it's much closer to perfection than ever before. While other generations use these same tools and technologies to make comparisons and guide their purchase decisions, they do so with the spirit of a convert rather than that of a true believer. Gen Y has never not had these tools at their disposal.
As we head into the back-to-school surge of 2010, we see indications that the big-name discount department stores will feel the first winds of the recovery in their sails, supported by messaging that revolves around price. How does one compete in a world where comparison-shopping bots make your price and their price transparent? If price discounting isn't your strong suit, there are other tools you can use to capture the spending of Gen Y.
One highly effective technique is to incorporate a brand narrative into your positioning. Gen Y loves it when a brand tells a story, particularly if that story involves them. The Obama campaign got this part right with members of Gen Y, spinning a brand narrative that showed them how they could help change the world. Join (Red) transcends individual products, creating a meta-brand narrative that can surround a thousand products with a positive aura.
In addition to telling a story, getting the attention of the comparison shopping generation requires engagement. Hearing a story is one thing, participating within a story is another. Gen Y loves to be included in the cause and, as long as they feel that the proposition is authentic and will truly benefit those around them, they'll gladly make your mission their mission.
Feeling like you can't win the game based on the rules that exist? Change the rules. Invitation-based shopping experiences like Rue La La make shopping a time-sensitive adventure. There's no time to compare when the clock is ticking and a limited selection is selling out.
Entertainment auction models like Swoopo combine the desire for a discount with the thrill of competition. GroupOn lets you amass buying power by enlisting your friends in order to broker a better deal. Lockerz enables community members to amass PTZ by watching ads, taking surveys or performing other tasks, allowing them to cash in PTZ to obtain discounts. These innovative models make price comparison less relevant.
When we seek to help others develop a narrative, engage a generation or change their game, we typically encourage them to focus exclusively on Gen Y. While other generations will often participate in these new models, they are typically constrained by the imprint left by their first context.
Gen Y is at the beginning of the arc of its economic power. What we see today will be rapidly extended and expanded beyond our current context as technology evolves and the largest generation in American history begins to participate fully in the economic activity of our society.