Karen Weiner Escalera, president & chief strategist at KWE Partners, details the importance of Generation Y in the future consumption of luxury goods
Eye opening facts for affluent brands: Generation Y (born 1977-1994) is the biggest generation in U.S. history and represents the largest consumer group in U.S. history – an estimated 83 million strong or roughly 25% of the U.S. population. Gen Y out-numbers Boomers (born 1945 – 1964) by about 4 million and is replacing them as the most important economic force.
With a taste for luxury developed through flash-sale websites, Gen Y shoppers are increasing their spending with full-price luxury retailers. Gen Y’s annual spending power exceeds $200 billion and they also influence another $50 billion in purchases. By 2017, Gen Y will eclipse Boomers in spending power.
Advice to marketers – if you’re not already capitalizing on this opportunity, you need to start. Marketing channels play a huge role in targeting Gen-Y. While print continues to be a primary source for information on prestige brands (#1 source for women, #2 for men), word of mouth recommendations from family/friends are also crucial (#1 source for men, #2 for women).
“ They are the hardest-to-reach but freest-spending generation. This group of super-consumers have an “always-on” connection to social media and the Web ”
Not surprisingly, Gen Y has embraced social media and blogs for information – they are more likely to listen to each other than listen to what marketers and previous generations are telling them. They are the hardest-to-reach but freest-spending generation. This group of super-consumers have an “always-on” connection to social media and the Web, mainly through mobile devices. Some, like Red Bull, have sidestepped traditional media altogether and created their own documentaries around extreme sporting events that bring its values to life.
How to earn respect when talking with Gen Y: authenticity. Authentic is cool. And they won’t waste time on companies that aren’t being real with them. Who has been successful at marketing to Gen Y? Internet-savvy and youth-aware companies such as Apple, Jet Blue, Trader Joes, Jones Soda, and Mountain Dew, to name a few. How do these companies speak to this demographic?
- They don’t talk down to them.
- They don’t push their brands in their faces.
- They let their raving fans do the job for them.
- They like somewhat quirky, simple and high quality.
- They’ve created a parallel between the brand and Gen Y’s favorite things to do.
Karen Weiner Escalera and the Hotel Sales and Marketing Association International (HSMAI) will be leading a Live Facebook Chat on Travel Trends and PR in a Social Media World on May 15 from 2-3pm EST. Luxury Society readers are invited to view the LS Event Page or contact Karen for further details