Business school researchers nationwide have been comparing Generation X with Generation Y consumers, in advance of the upcoming Cyber Monday (the first Monday after Thanksgiving). Generation X has a higher income due to their ages—born between 1964 and 1977—compared with Generation Y—born between 1978 and 1998. On the other hand, Generation Y is composed of 72 million consumers compared with 44 million for Generation X.
At issue, according to Prof. Nelson Barber at the University of New Hampshire, is that marketing campaigns aimed at Generation X are incompatible with those aimed at Generation Y, forcing Cyber Monday retailers to target one group or the other, or they must at least provide different types of information for each group.
"Generation X [shoppers] tend to use information not as a point of pride, but as assurance that they are not being taken advantage of by marketers and are getting the best deal," said Barber. "For Generation X, marketing strategy should focus on providing product-related information that is verbally and visually rich, and highly informative."
Generation Y, on the other hand, considers these information-only approaches as old-school. Rather than seek a deep understanding of products prior to purchase, Generation Y consumers look to their parents and peers for guidance when faced with complex product information, resulting in indecisive "hovering" behavior that they seek to resolve by conforming to the norms set by their friends and family.
"Generation Y selects and consumes products that help them achieve their goals of blending in with the crowd or a certain group," said Barber. "They are influenced by the need to conform in order to be liked and accepted."
Thus, to attract Generation Y consumers, Barber suggests marketing campaigns that add social networking, microblogging and live-chat customer service to their traditional product descriptions and benchmarks. And even the type of social networking needs to be carefully crafted, since Generation Y consumers react in an opposite manner to different styles of social networking.
According to a separate study by Prof. Qi Wang, at Binghamton University, Generation Y consumers react in an opposite manner to word-of-mouth (reviews) and "observational learning" (showing statistics that observe the percentage of viewers who went on to buy a popular product). Marketers already knew that Generation Y consumers often discount positive word-of-mouth reviews of products, believing the reviewer may have been a ringer. Negative reviews, on the other hand, often cause a Generation Y buyer to beware.
"Negative word-of-mouth affects people more than positive word-of-mouth. This is not new, [but] our study is the first to note that the opposite is true for observational learning," said Wang.
Wang's new research disproves a widely held myth that consumers will be scared away by low percentages of viewers going on to make a purchase. In fact, high percentages help, but low percentages don't harm. Also word-of-mouth reviews that aren't negative can combine with positive observational percentages to doubly enhance consumer interest.
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