Younger consumers think differently. Dr. Kit Yarrow has cracked their code.
The “echo boomers,” also known as Generation Y—defined as people born between 1978 and 2000—is now the largest generation in U.S. history. And as this group grows up, makes its mark in the workplace, and becomes a demographic force to be reckoned with, it is also greatly influencing retail and how products are sold. To look at how jewelers can lure these often-fickle consumers to their stores, JCK spoke with Dr. Kit Yarrow, a San Francisco psychology professor and coauthor of Gen BuY: How Tweens, Teens, and Twenty-Somethings Are Revolutionizing Retail.
JCK: Are Generation Y’s shopping patterns different from other generations’?
Kit Yarrow: Very different. Technology has had a great influence on them, and not in the way you would think. They literally think differently than other generations. They have shorter attention spans and a great belief in innovation. Every generation of cellphone is better. For them, if it’s not new, it is sort of dying. That is how they measure a company’s coolness. It takes more to break through to them because they have fairly bombarded brains. They don’t want to hear people talk about their product—that’s just death. They want to be shown the product; they want to play with it.
Traditionally, online stores have been designed to look just like a store with things like shopping carts. But recently, we’re seeing that consumers prefer to shop online. So we are seeing retailers mimic the benefits of online shopping. What they need now is inventory management [and] the ability to have ratings, reviews, and input. The experience has to feel online-ish to these consumers, otherwise they will treat retailers as just a showroom.
I just read about a clothing store that has hangers that tabulate Facebook likes for the product on the hanger. That is the kind of thing retailers need to do. That looks super-relevant, it values technology, it shows people you are trying something new.
JCK: Does this generation value luxury goods like previous ones did?
KY: Status for this generation isn’t about money—it’s about attention. Previous generations got that Chanel handbag or 3 carat diamond to tell the world they made it. This generation has already grown up in a time of unprecedented prosperity. They have always been given a lot, even those who grew up in low-income families. So their expectations are much higher. What they are looking for is something that sets them apart. It could be a unique item or a unique opportunity. People love to buy things on sale because there is a rarity. Being able to get something special for less is not really about the price. It’s a badge of honor to say, “I got this cool thing for 80 percent off.” So it could be a special price, it could be something designed by a local artist. It has to be customized for them. One of the reasons people like Blue Nile is that you can play around with making your own jewelry.
JCK: Has this generation been affected by a bad economy?
KY: The psychology of this generation is not that of a depression generation. People’s relationship with money is set by the time they are teenagers.
JCK: How does social media affect their retail habits?
KY: If I were in jewelry, I’d be all over Pinterest. It is all about visuals. I would find ways to capitalize on the beauty of the merchandise. I think every business needs a presence on Facebook. The power of Yelp can’t be overstated.
JCK: Does this generation care more about social issues?
KY: It does, and some of it is genuine and heartfelt and some of it is another way to get attention. If I had a jewelry store, I would be all over “used” jewelry. This generation loves vintage things and recycling. I would also make it super-easy to trade in anything. I think this generation has guilt around their consumption. They love to get things, but they also feel a little bit guilty.
JCK: So do they still respond to traditional jewelry like engagement rings?
KY: The engagement ring has a huge significance. But this generation is really creative. One of the upsides of the self-esteem movement is this generation is really fearless and creative in rethinking tradition. They put their own stamp on everything. I would err on the side of the new—not necessarily in the product but in the communication.
JCK: What are this generation’s attitudes about marriage?
KY: Completely pushed upside-down. You are seeing more kids born to unwed mothers under 30 and people marrying later. This could be good for the jewelry industry because if consumers get married later, they have more money. But permanence is a more frightening concept to this generation than to others. Nevertheless, most Gen Yers will get married, but will do it a bit later.
JCK: Does this generation have brand loyalty?
KY: They do switch brands a lot, but they are a lot more brand-conscious. There is no way they will continue a relationship with a brand just because it’s a brand. The minute the brand disappoints them, they are out of there.
JCK: Is any brand doing a good job of reaching out to these consumers?
KY: The most obvious is Apple. People often talk about the design of their stores. They are hands-on, completely open; people get to play with things. You can go and interact with the merchandise. And you can check out really fast.
Apple is kind of the opposite of many jewelry stores. It’s a completely accessible playground. You don’t have to ask permission to try the merchandise. This generation doesn’t like to ask permission.
JCK: Any thoughts on dealing with workers from this generation?
KY: It’s a really big problem. Every time I give a speech about marketing to Gen Y, people are totally vexed by their lack of loyalty and bad manners. I think we need to reconfigure our perceptions of this generation. They can be loyal, and they actually want a little more boundaries. They appreciate feeling like they belong to a club.
It can take understanding, because they don’t believe in hierarchy. Just because you’re the boss doesn’t mean anything to them. Their parents aren’t even considered the boss. But I consider this generation extremely anxious; they like it when there are rules and procedures. They do require a bit more attention, but in the end they can be your greatest advocates. They can be worth your attention if you find the right ones.