How to sell to Gen Y

Generation Y have a number of unique characteristics that small businesses should take the time getting to know if they want to market their products or services to them.

The age range of this segment varies, but most definitions cover those born in the 1980s with some including the late 1970s and early 1990s. Gen Y are said to be impatient, demanding and self-interested but also technologically savvy and with a strong environmental conscience.

Adam Penberthy head and creative director of the youth advertising agency Think Fresh says he hates the stereotypes that apply to the different generations and doesn’t think they are relevant or true. “It’s just a mindset,” he says. “They say Gen Y have short attention spans, but I’m sure many baby boomers do too.”

He says by nature, Gen Y are highly peer driven, and follow the lead of the people that hover around them, that is, their mates.

“Gen Y seek instant gratification and as a result are impulsive in their purchasing habits,” he says. “The way you market to Gen Y depends on the specific business you’re in. If you are a progressive business then it is imperative you realign your advertising to connect and engage with them.”

This can be done through digital means or by providing a positive experience with a company’s brand, he says. “The company needs to give Gen Y a look into how they operate – we call this experiential marketing, which engages as many of the senses as possible.”

He says big brands do this every day, citing VB beer as an example, which has a VB team promoting the beer at football games.

The value of Gen Y

The Australian Centre for Retail Studies based at Melbourne’s Monash University has conducted a number of studies into Gen Y characteristics and found they have a large disposable income and are happy to spend it on themselves and also happy to rely on credit. In fact, they spend $4 billion each year – largely on travel and recreational activities.

Research analyst at ACRS, Selma Mehmedovic, says Gen Y, more than any other group, engages with retailers through social media and will communicate with them in the same way.

“Retailers have the ability to communicate to their buyers through Facebook and with one click take them to a transactional website where they can make a sale,” she says.

ACRS examined different ways of selling using channels such as store, catalogue and online. “We found the emerging channels such as mobile and social media as well as online catalogues are more preferred by Gen Y,” Mehmedovic says. “Social media is a cost-effective option for small businesses that want to sell to Gen Y but it needs to be an integrated strategy and it needs to be two-way. In other words they can’t just open a Twitter account and never use it.”

Confronting stereotypes

Nineteen-year old Gen Y, Tom Loomes says he believes he is fairly typical of the generation. “I think some of the stereotypes do apply, such as being impatient, not wanting to waste time and having a preference for the internet when shopping,” he says.

Loomes, who works as a research assistant for an adult training organisation, says when he wants to buy something he prefers not to be approached in the shop.

“I hate walking into a store and being hassled by shop assistants. I like to browse on my own – all my friends are the same. Maybe we’re more impatient but I don’t have time to talk.”

Gen Ys tend to be environmentally conscious, having grown up in a time where this type of thinking is prevalent. However, Mehmedovic has mixed views as to whether including an environmental message has an impact on sales.

“I suppose if a consumer was faced with two identical products and one promoted a green message, the Gen Y would choose that, but it’s hard to say,” she says.

But Loomes says having a “green” message is important to his age group.

“We’ve all concerned about the environment so if a product has an environmental message we take note,” Loomes says. “The same goes for healthcare. If a product has the Heart Foundation tick of approval I automatically think that product is good for me.”

Opting-in

What does seem to be a clear message is that if you are advertising your products and services to Gen Y, make sure you ask their permission first.  Loomes says he does a lot of shopping online and having the ability to opt-in and out of messages is crucial.

“I receive many catalogues from online retailers and I prefer to be able to say when they can send me information. I also like being able to stop them sending me stuff when I no longer want it.”

He also says he responds favourably if a celebrity is used in a marketing campaign.

“If a celebrity or someone famous is in an ad it does make me want to buy it,” he says. “The celebrity aspect brings out another side of the product to me and makes me feel that if they are using it then there must be something good about it that I will like.”

Penberthy however, believes celebrity advertising is a risky strategy. “Britney Spears being paid to promote Pepsi but was photographed drinking Coke is one example where it didn’t pan out,” he says. “The percentage of Gen Ys that say they trust celebrities is quite low.”

He believes to promote their products, businesses need to get young people talking to other young people.

“They need to empower Gen Y to share the experience they have had with their brand,” he says. “We found 78% of Gen Y trust what their peers say about a product, so businesses need to stimulate discussion about having a favourable experience.”

Don’t try to be ‘cool’

It is easy for businesses that have little understanding of Gen Y to make mistakes when trying to connect with them. Penberthy says some of the major mistakes businesses make happen when they are trying to be cool or do what they think is cool.

“They might use a lot of colour because they think this is what Gen Y likes,” he says. “Or they try and speak like a young person would. They should focus more on making their communication relevant.”

Another mistake, he says, is using the wrong type of media. “Young people are increasingly moving away from television and instead downloading programs from the internet,” he says. “Another mistake is not specifically targeting the group they want. Businesses need to segment more than they did traditionally, for example, go after the 15 to 17 age group rather than the 15 to 30-year-olds.”

He also adds, thinking that digital is the be all and end all is another area of misunderstanding. “In many cases digital isn’t the media of choice for certain Gen Y so you need to look past this stereotype.”

His final advice is that if you are targeting Gen Y think about how you can align with that demographic. “Communications are changing but so too are the way we shop and interact with each other,” he says. “In some cases you may need to reinvent a product to align it with the Gen Y sector rather than go with your existing one.”