Magazine article CRM Magazine

Gen Y: The Next Generation of Spenders: They're Young, Educated, and Tech-Savvy. Here's How to Get Them to Pay Attention to You

Magazine article CRM Magazine

Gen Y: The Next Generation of Spenders: They're Young, Educated, and Tech-Savvy. Here's How to Get Them to Pay Attention to You

Article excerpt

Generation Y

Born between 1977 and 1994

Numbers: About 72.5 million

[ILLUSTRATION OMITTED]

Empowered, disappointed, savvy, optimistic, unemployed--for anyone trying to decipher Generation Y (also known as Millennials), it means starting with a fistful of contradictions. With a population estimated at roughly 72 million, Generation Y is the most educated, diverse, tech-proficient, and soon-to-be largest American generation ever. It is also a generation that distrusts traditional advertising and will more likely listen to the opinions of their peers.

As the oldest Gen Yers reach their mid30s and increase their spending, the pressure is on for marketers to figure out how to capture this generation's attention.

DELAYING ADULTHOOD

Like every other generation, Gen Y has been affected by the recent recession and weak economy.

For many members of this group, this has meant difficulty landing their first job or being underemployed. Only 48.8 percent of 16- to 24-year-olds were employed between April and July (the peak time in youth employment) in 2011, the smallest share since the government started recording data in 1948, according to the Bureau of Labor Statistics.

Although other generations have come of age during a poor job market, none have been as heavily burdened by student loans. The amount of student loans that were taken out in 2010 crossed the $100 billion mark for the first time. Americans now owe more on student loans (expected to reach $1 trillion) than on credit cards, reports the U.S. Department of Education, the Federal Reserve Bank of New York, and other sources.

Faced with these economic pressures, many Gen Yers are taking their time before reaching major milestones such as buying a house, getting married, or raising children. Some are even returning to their parents' home after college, giving rise to the term "Boomerang Children."

The weak economy offers only a partial explanation for this development, according to Tamara Erickson, author of the book Plugged In: The Generation Y Guide to Thriving at Work.

"One of the interesting differences between Generation X and Y is that for many Xers, returning home meant you failed. The Y Generation sees it as a sensible thing to do," Erickson says.

According to Census data, about 5.9 million Americans between ages 25 and 34 lived with their parents in 2010, a 25 percent increase from before the recession began in late 2007. Men are nearly twice as likely as women to live with their parents. In addition, the marriage rate for those between ages 25 and 34 fell to 44.2 percent, also a new low.

Not all of the Gen Yers who are living at home are unemployed. By rooming with their parents, Gen Yers insist they are making an investment in their future.

"I have it pretty good at home, since it's so close to my work, and financially I just feel like it's smarter for the long run to buy," Jay Bouvier, 26, a full-time physical education and health teacher at a Connecticut high school, told the New York Times.

Gen Y's spending power is almost $200 billion a year, according to marketing research firm Kelton Research.

"The recession hurt a lot of people with mortgages and portfolios, but [Gen Yers] don't have those worries, and those who are earning an income are looking to spend it," says Kelton Research CEO Tom Bernthal.

Experiences like backpacking internationally and buying the latest tech gadgets are big with the Gen Y demographic, says Christine Hassler, author of 20 Something Manifesto.

"It's all about engagement and experiences. They saw their parents work hard and then watched their pensions disappear, so now they [Generation Y] want to have a lot of fun. This is a 'live-in-the-moment' generation that is also very social," Hassler says. "They do things in groups and like brands that are aspirational, like Virgin. …

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