Today's Ypulse Interview is with consumer researcher Kit Yarrow, one of the co-authors of Gen BuY: How Tweens, Teens, and Twenty-Somethings Are Revolutionizing Retail and chair of the Golden Gate University psychology department. In Gen BuY Kit and her co-author Jayne O'Donnell cover territory particularly relevant to Ypulse readers: the how and why of Gen Y's consumer habits and the impact on retail. Along with suggestions for marketers on how to harness this group’s considerable spending power,  Kit calls on her background in psychology to impart a better understanding of what triggers these shopping and buying behaviors on a deeper level.

Gen BuY is out now, but we're giving away free copies to the first three commenters to share an innovation in retail they associate with Gen Y and why.

Ypulse: Can you describe some of the ways retailers have adapted to Gen Y consumer habits? What changes do you think we'll continue to see in the next few years?

Kit Yarrow: The successful retailers are the ones that are connected to Gen Y. They understand more about the unique psychology of this generation and they're responsive in an honest and genuine way.

Specifically, these retailers tend to blend more entertainment and surprise into the shopping experience, they refresh their merchandise and promotions more frequently, their online and mobile presence is on-brand and robust, and they listen to their customers.

There are so many ways that retailers can engage Gen Y, and that’s really the key – to find opportunities for two-way communication and involvement. Social media, advisory boards, sponsorships and tie-ins, for example, offer opportunities for Gen Y to connect and for retailers to listen.

Retailers and brands that give Gen Y the opportunity to join with each other through the brand, and ones that consumers can personalize and use to express themselves work best. And that’s a tough transition for businesses. The old way was to say how great you were and explain why people should buy. The new way is much more subtle, brands and retailers really have to serve the emotional needs of their markets and partner with them.

YP: What were some of the more surprising discoveries made during your research?

KY: As a psychologist, I think I was struck most by some of the social and emotional differences between this generation and others. For example, a group of women I interviewed in their late 20′s were full of anxiety about their career choices – and sometimes even their choice of mates. They were all doing the most amazing things – I was in awe of them and consequently surprised to hear that level of self-doubt. They explained that because they’d been told "not to settle" and that they "could do anything" they felt anxious about their choices. They wondered if what they were doing was good enough, had they settled, and how to know if they were making the right choices from an ample array of options. I tested this out in interviews and with a group of younger Gen Yers at a UC Berkeley guest lecture and heard pretty much the same thing: anxiety from facing lots of options and high expectations.

Every generation carves out a new path, but with this generation it's more like a five-lane highway. Change is almost always accompanied by anxiety of the unknown and this generation is facing enormous social and relationship changes.

What Gen Y has on their side though is more confidence than older generations had when they were young, and optimism. Not to mention the empowerment of technology.

YP: What's the quickest way a brand can turn off a Gen Y consumer?

KY: Hype, insincerity, making it all about you, not seeing the individual in the mix, being a know-it-all or all-powerful.

You can make mistakes, even offend but if you apologize you’ll be forgiven. It’s all about being real.

YP: Is there a company that has successfully redeemed themselves to Gen Y? Which one(s) and how?
 
KY: Netflix is a good example. When customers have a scratched or lost disc Netflix apologizes and moves swiftly to solve the problem. A different company might ask for documentation or put the customer in a defensive position. Consumers disregard the inconvenience because they sense they're dealing with an earnest, accountable company. When you think about it, Netflix could spend millions on an ad campaign touting reliability, but with Gen Y actions speak louder than words. The humanness and sincerity of an apology works better.

Another more controversial example is Facebook's Beacon fiasco. If Founder, Mark Zuckerberg hadn't finally owned-up and apologized – in a sincere, believable manner I don't think they would have hit the 300 million user mark this month. In fact we'd probably be using a different social media site right now.

An apology communicates two things that are essential to Gen Yers: that the company cares about its customers and that humans exist at the center of the company which makes it a more relatable and genuine organization.

YP: How has the downturn affected teen and millennial shopping habits?

KY: Gen Y has reduced their spending less than other generations – but they have reduced spending. They're more attracted to less expensive clothing options and they're using technology to find bargains. They can’t compete with older generations when it comes to sacrifice, but they are for sure cutting back, going to second-hand stores and sale shopping.

When I began research for the book two years ago I found a disturbing lack of financial literacy in younger Gen Yers and many of the older Gen Yers I’d surveyed had or were dealing with credit card problems. In the past few months this has changed dramatically. So a positive of the recession is a healthier financial future for Gen Y.

YP: In terms of marketing and shopping experience, how have retailers responded to Gen Y's relationship with their parents?

KY: Retailers are increasingly understanding the influence that Gen Y has over their parents and are more inclusive in communications and product design. For example, once upon a time a new family car purchase would never have included the opinions of the kids (farther back even Mom wasn't included). Today teens are estimated to influence the majority of family car purchases.

YP: Who should read this book?

KY: My co-author, Jayne O’Donnell, who is the retail reporter for USA Today, and I considered marketers to be our primary audience. But the way to reach Gen Y is to really understand them, and so Gen BuY is also a psychological study of the generation.

I hope everyone will shop better and learn more about themselves by reading Gen BuY. There are insights about things like how sales influence us psychologically, why we’re attracted to celebrities, how sexy often isn’t really about sex – and the real reasons why we buy things.

I study consumer behavior because it’s a way to understand society and people. After all, people throughout time have shopped and traded and wanted things. It’s a great way to compare cultures, values and generations.

Categorized under: Youth Marketing

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