Feature Article
December 16, 2002
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Has Gen X fallen through the cracks?

After a long and grumpy road, Generation X has reached purchasing prime, just in time for the recession. What's a marketer to do? Target its siblings, Generation Y. Less skeptical and more populous, Gen Y's approach to life is buy, buy, buy.

Generation X has always been problematic. Skeptical and saddled with recessions, the members of this age group never really had a chance to embrace shameless consumerism like Gen Y. The recession of the early 90s produced a job market so dismal that college grads were forced to take menial jobs to support themselves and pay back heavy student loan debt. Five years ago, it seemed that Generation X (which we will define as born between 1965 and 1978) had finally caught a break. The dot-com boon and thriving economy of the late 90s created a prosperous climate, finally giving Gen X'ers a reason to feel that they might be able to achieve or surpass the financial status of their parents.

But as it turns out, a second recession, 10 years after their first, is sending many X'ers back to the unemployment line. "For older Gen X'ers, this recession is deja vu all over again and many have the 'See, I told you so' attitude," said Carolyn Martin, Ph.D., at Rainmaker Thinking, a research firm specializing in market analysis. "I told you, 'you can't trust organizations.' I told you that job security was dead. I told you, 'we are all responsible for our careers and free agency is the way to go.' "

Research indicates that Gen X consumers are more cynical than their predecessors. With more information at their fingertips via the Internet, they want to carefully evaluate their choices and reach their own purchasing decisions. This discriminating pattern often discourages brand loyalty, keeping brand managers and advertisers on their toes. Rob Frankel, author of The Revenge of Brand X offers his opinion as to the cause of this: "Gen X is called Gen X because they had no unifying cause. Consequently, consumerism moved into the vacuum. The way to target Gen X'ers is by trying to convince them that other Gen X'ers are doing the same thing; something they can join and to which they can belong."

But many brand owners may be asking themselves "why bother?" In response to the erratic times, some brands are refocusing their marketing efforts, creating ad campaigns that reach past Gen X to the much more appealing Gen Y group. Ad Age recently reported that Gen Y'ers (born between 1978 and 1986) will considerably outnumber their older Gen X siblings within 10 years. Averaging around US$ 100 a week in disposable income, their cumulative spending power comes close to US$ 150 billion a year. As they are often the most tech-savvy members of their household, they are frequently tapped for opinions in family purchasing decisions, adding to their already considerable influence in the marketplace.

Gen Y makes for a different type of consumer than Gen X was 10 years ago. "Gen X'ers were the first generation raised where consumption is a way of life," said Frankel. "Boomers bought stuff because they needed it; X'ers buy because they want it. Gen Y is less rooted in traditional social mores and ethics. They are easier targets, because they have grown up in a culture of pure consumerism. They're more likely to buy because they see buying as a part of life." He continued, "They're way more tuned into media because there's so much more media to tune into. Remember, there was no web in the 80s and cable TV was something of a joke." Where there are more media outlets for Gen Y to be aware of, there are more opportunities for advertisers to reach them.

But having more outlets doesn't necessarily mean it's any easier to reach this generation with a blanket approach. "Teens today are much more tech savvy, confident and culturally diverse," said Rainmaker Thinking's Martin. "There are so many Gen Y sub-cultures that it's impossible to put them in a box. As one Y'er we quoted in our Managing Generation Y book put it: 'I think my generation has jumped through hoops and broken backs to ensure that no names "fit" it.'"

Many marketers are conducting teen focus groups and hiring junior scouts to stay apprised of Gen Y's wants and needs. But why cater so heavily to this age group? Frankel offered, "You'll always have the major powers appealing to youth for two reasons: they're easier targets and older people want to stay younger. Probably the biggest brands [aimed at Gen Y] are the cheap cars. Those ads almost never feature anyone much older than their early twenties." In fact, everything about the car from price to size is targeted to appeal to young consumers.

What works in reaching these young power spenders? "Obviously, they are more savvy about being marketed to," said Martin. "They want to be treated with respect, and not condescended to as know-nothing kids. They want to be listened to and have their needs and expectations addressed." Viral marketing has proven itself to be a popular and effective medium. "So many marketers have taken the grassroots approach, hawking their wares at places teens gather and/or using teens to spread the word to their friends. Obviously, with IM (instant messaging), word gets around faster than a speeding bullet!"

How long can it last? The onset of adulthood may not prove to be any easier for Gen Y than it was for its older brothers and sisters. With education costs on the rise and the economy still unstable, they may not have a disposable income for long. "For Gen Y, who came of age during the boom years, this recession means the job market that three years ago was scrambling to recruit them, has closed its doors," said Martin. "Maybe they've just learned from their older brothers and sisters and got smarter about money. But they may also graduate from school only to find there are no jobs."

Or they may just learn to live completely in debt. "What [Gen Y] has is a natural inclination to spend and embrace products that promote that behavior," said Frankel. "For example, a parent-approved debit card, which the major brands are pushing as 'a way to teach your kids to spend wisely' when in fact the effect is just the opposite: like poker chips, the plastic isn't viewed as real money."

Either way, until the next generation defines itself, brand owners will likely continue to move away from Gen X to embrace the more agreeable Gen Y.

Vivian Manning-Schaffel is a freelance writer who lives and works in Brooklyn, NY.

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