Market segmentation: Generations at a glance
“It’s weird being the same age as old people.”
I was catching up with a longtime friend on Zoom recently and he said to me…
“I’m 40 but I still feel like I’m 20… Until I hang out with some 20-year-olds. Then I’m like no, never mind, I’m 40.”
I feel younger than my biological age too, sometimes. Until I feel the pain in my neck return, and then I’m reminded I’m old. As a marketer, it is important to understand the different generations — what they want and how they buy.
Each generation is different with unique demographics, psychographics and life events impacting how they consume products and services. For example, A 70-year-old will react differently to an online ad as compared to a 20-year-old. And a teenage boy will more likely be loyal to a product because it is eco-friendly than a 40-year-old.
With COVID, political events, civil unrest and other issues impacting the market, it is crucial to keep up to date with the impact they have on our target audience. In that way we are able to design an effective marketing strategy.
Let’s take a closer look at the different generations…
Despite the populations ongoing decline, the Boomers still wield greatest amount of disposable income. They are brand loyal and value in-person customer service. Boomers will use Facebook & Google for purchase information & prefer “in-store” experience.
Key Defining Trends — the Boomers
Slow decline due to aging population
Retired, still in workforce — want (but cannot) retire
Living longer, outliving retirement pensions & savings
Despite having close to 15 million less people in this generation versus all other generations — the spending power of Gen X should not be ignored. Today, they make up only 25% of the population yet produce 31% of total U.S. income. They prefer high quality, discounts, laptops/desktops to shop and clear product & marketing messages (via email) as a path to purchase.
Key Defining Trends — Gen Xers
Carry highest debt load ($142k) of all generations due to combination of mortgage debt and student debt (for their kids and themselves)
Sandwich/Lost generation burdened with raising/paying for “adult kids” and caring for aging parents.
Millennials are now the largest living adult generation in the workforce spending $600 billion a year. Their desires and needs are reinventing the commerce landscape. They harness the power of internet to make better, more informed decisions. 99% of millennials are influenced by reviews, word-of-moth marketing, user-generated content, and social selling. They look for authentic and affordable brands. They purchase products/services from brands that are “socially conscious” that provide high quality digital customer experience.
Key Defining Trends — the Millennials
-Population breaks down into three segments — 1/3 live at home, 1/3 burdened with $35k+ in student debt, 1/3-laid off due to COVID
-Majority have delayed marriage/major purchases and have not recovered from 2008 recession
-Customer experience/social conscious brands rule purchase decisions
With the Gen Z population just entering the workforce their actual buying power is smaller than other generations. However, unlike other generations previously they have the most influence on the purchase buying behavior of the Millennials and Gen X. They are leaders, visionaries, and trend setters like Greta Thornburg — who single-handily challenged the world’s inaction on climate change. And who can forget the Zoomers taking on Congress about gun violence?
Zoomers are fearless and want honest brands that offer tangible answers for political, social, economic, and racial challenges. They gather information and make purchases from their phone based on information and recommendation gathered from social media (Instagram, Snapchat, TikTok, and YouTube).
Key Defining Trends — Gen Z
-Always lived with adversity, war, and hyper connectivity
-Recently joined workforce and lost jobs due to COVID
-Astute climate, social change & racial/gender diversity activists
-Realistic and gender neutral
-Wants to avoid student debt
Gen Z vs. Gen Y
Zooming ahead, Gen Z’s buying power is limitless unlike the millennials who have faced slower economic growth since entering the workforce with lower earnings, lower wealth, and delayed milestones. Of course, Gen Z lost jobs & opportunities from COVID as the latest arrivals. But the ongoing impact is not even close to the negative impact on the Millennials burdened with 2008 recession, staggering debt load and highest unemployment since the Great Depression.
Gen Z and Gen Y resonate with brands that reflect their ethnic diversity, social causes, and economic/political values. Both generations use their smartphones for an integrated mobile and physical shopping experience. Unlike the Millennial, the Zoomer likes to shop “in-stores” which is good news for retailers.
But care must be taken to understand that Zoomers will question everything, will not take “NO” for an answer and are actively voicing their thoughts on voting, gun violence, cyberbullying, BLM, climate change and racial/gender inequality.
There is no doubt that Gen Z will not only “zoom” past the Millennial but Boomers & Gen X as well. Although this seems like a daunting task — I for one am glad they are here…they have the tenacity, passion and drive to help us navigate the challenges faced today and tomorrow.
Regardless — of the power of Gen Z — on a go-forward basis it is essential to understand generational similarities and differences. This is one of the best segmenting tools to use in uncovering “unforeseen” opportunities in this quickly changing market.
Keep in mind too that each product, service, and person is unique. So as important as generational segmentation is — there are other powerful tools we use when determining market segment characteristics. Look into those as well to create your perfect buyer persona and marketing approach.