Managing Director – Retail of MacroPlan Dimasi
Baby Boomers, Generation X, Generation Y, Generation Z, Millennials, Digital Natives, Generation Alpha – what on earth does it all mean? And more to the point – what does it matter? If you are a retailer, service provider or shopping centre professional how much of this generational deliberation is essential to know versus just nice to know? And how much is real, rather than superficial generalisation? What part or parts should you focus on in order to make a real difference to your business?
In brief, today’s generational cohorts as they apply to Australia are generally described as follows:
Born pre-1945, and thus now aged at least 68.
Shaped by major influences including the Great Depression and two world wars. Not surprisingly, this cohort values savings, morals and ethics, and tends to be very patriotic. Family togetherness and conformity are also very important attributes for them.
Born immediately after World War ii, i.e. 1946 through to 1964, therefore now aged between 49 and 67.
Influenced in their upbringing by strong economic growth and generally full employment, they witnessed an extensive immigration program throughout Australia, and are generally considered to be adaptive and flexible. Baby Boomers are regarded as having defined themselves largely by their careers, with a high proportion considered to be workaholics. They are increasingly moving into the retirement phase of their life, but many plan to continue working. However, following the recent GFC, a number of Baby Boomers have suffered an unexpected economic shock, and are having to work longer than they had previously planned in order to provide effectively for their retirement.
Born between 1965 and 1979, and now aged between 34 and 48.
A bridging generation, which joined the workforce generally during periods of economic prosperity (the mid to late 1980s onwards) but has become somewhat disillusioned with the economic clout of the Baby Boomers, who they apparently see as holding on to economic power.
Generation Xs are highly educated but more questioning of convention than the Baby Boomers. They are also generally more interested in balancing family, life and work, and much less inclined to sacrifice time, energy and relationships for career advancement like the Baby Boomers did.
Born between 1980 and 1994, and now aged 19 to 33.
Also known by a number of other labels – Millennials and KiPPerS (kids in parents’ pockets eroding retirement savings) are two such terms. The majority of this generation has never known a world without mobile phones, laptops and cable television. This cohort is the one that tends to cop most criticism at the moment, with labels such as ‘used to instant everything’, ‘believe they can separate effort from reward’, ‘do not live to work but work to live’.
Generation Y is the most formally educated and most sophisticated of all the generations before it. Detailed research has shown that Generation Ys are looking for brands that resonate with their peers. They are very image driven and so value, for example, electronic toys, piercings and tattoos. Other research shows that they pay less attention to quality than other generations.
Born between 1995 and 2009, and is therefore now aged 4 to 18.
This is the generation of social networking, the internet, the baby bonus (in Australia), globalisation and the GFC. The labels being attached to this generation include ‘realistic’, ‘highly connected’ and ‘digital natives’. Generation Z s are seen to be wary with their money, having seen their parents lose jobs and their older siblings move back home because housing is so expensive.
Via expert use of social media and the internet, they have already become demanding purchasers. They research diligently, are marketing savvy and are much less likely to make impulse purchases. They will find the best deals and will expect to test out products physically or virtually before they commit to buy. Generation Z will, apparently, want brands to show their long-term value.
Born and are at the very early stage of their lives.
They are regarded as the post-GFC generation, facing an unpredictable global economy during their formative years. They will be submerged in technology from day one, and are more likely to spend more time in childcare and to pay millions for an average home. Medical experts tell us that they can expect to live to 90 years of age, and the flipside of that is that Alzheimer’s disease is set to take over as the number one cause of death in their lifetime. it remains to be seen whether this new generational cohort will emerge, in the same way as Gen Z, Gen Y or Gen X, as one which gains popular accreditation.
At present, and for most of the past two decades, the retail expenditure pie in Australia has been dominated by Baby Boomers, who represent a much larger segment than any other. However, both Gen X and, even more so, Gen Y are very important, between them accounting for almost half of all retail spending.
Over the next two decades, we can expect to see the importance of the Baby Boomers diminish, although gradually, while Gen Y in particular, and also Gen Z in the second decade, will become more important. The changes though will occur fairly steadily, with the upshot being that all four of the main cohorts (Boomers, Gen X, Gen Y and Gen Z) will remain very important for the next two decades, at least from a total retailing perspective.
However, the manners in which they can each be effectively targeted and the types of stores which they are likely to use differ significantly.
Those generational characteristics first and foremost are gross generalisations. There is, however, a significant element of truth in many of them and certainly, they offer insights into how retailers and service providers can most effectively seek to target particular generations.
Article sourced from AMP Capital Shopping Centre's Recommended Retail Practice Report: "The New Consumer Paradigm - Embracing the evolving retail landscape".
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