Selling to Generation Y

Home Inside FCNews Selling to Generation Y

July 7/14, 2014; Volume 28/Number 2

By Amanda Haskin

The last decade has seen a dramatic shift in the American consumer. The Millennial Generation, or Generation Y, has risen to buying power, and its emergence is making many retailers change the way they market their products. From the bourgeois bohemians, or “bobos,” as David Brooks calls them in his book, “Bobos in Paradise,” to kids right out of college furnishing their first homes, they all have something in common—they are a generation of visual, Internet-savvy consumers.

This is a generation of chronic researchers, Googlers, pinners, likers and tweeters. Retailers are dealing less with people who will walk into their stores and allow themselves to be led by the hand by a sales rep. Instead, they are dealing with a generation unlikely to make buying decisions without first being armed with a sufficient amount of data, price comparisons and self-proclaimed wisdom on any subject. The expanse and instant gratification of the Internet has allowed us all this privilege.

Linda Mason, a sales rep at O’Krent’s Abbey Flooring Center in San Antonio, has encountered this type of customer on numerous occasions.

“They’re doing a lot of research prior to coming in,” she said. “They pretty much know what they want beforehand, so it’s a lot easier to point them in the right direction and show them what we have to offer. Some of them are in their 20s and designing their own bathrooms, and they know exactly what they’re doing. It’s very impressive.”

Not everyone is quite as impressed with this generation’s breadth of knowledge. Steve Lewis of Lewis Floor and Home in Northbrook, Ill., who wittily refers to this group as the “IKEA generation,” finds that they often come in with inaccurate information. “They do a lot of research, but it’s often bad research,” he said. “They don’t like to be told they’re wrong, and there’s often an arrogance about them that has to be overcome.”

Retailers also now have to deal with customers who think that everything they read on the Internet is true. But, as we know, the Web can be anything but factual.

“They’re dealing with marketing professionals online, who can lean a story to benefit themselves,” said Jeff Macco of Macco’s Floor Covering Center in Green Bay, Wis. “Most consumers can’t discern the difference between factual data and fluffed-up marketing that is simply inaccurate. You know the age-old adage: If it sounds too good to be true, it probably is.”

This bridge between inaccurate data and the honest facts must be crossed when customers go into a store. “I have a 23-year-old daughter,” Mason said. “It’s how you approach them. Sometimes they can come in like they know everything; it’s my job to tell them why they can’t do certain things and what they can do as an alternative. You just have to point them in the right direction. Most of the time, they’re eager to learn.”

According to Casual Living, a retailer’s ability to make a millennial smile is 33% more important than it is to a baby boomer. When it comes to big purchases, they are looking for more of a sensory experience. They are overall an untrusting generation, and you have to win their trust with the way you speak to them and make them feel. The worst thing you can do, according to Macco, is talk down to them. “The sales rep can’t be condescending,” he said. “They have to be able to empathize with the consumer and politely offer alternatives.”

Once you have a millennial’s attention, the focus goes to quality versus cost. For the most part, retailers believe that this generation is much more concerned with cost than quality. Adam Joss of The Vertical Connection Carpet One in Columbia, Md., said, “The challenge with millennials that I’ve found is there’s no appreciation for quality. Price is their priority. People in their 50s and 60s have lived, they’ve learned, they’ve been ripped off.” And, echoing what Macco noted, “They understand that if a price sounds too good to be true, it probably is.”

If it is true that this generation is more concerned with price over quality, much of that may have to do with their financial situations. Many of them are dealing with a number of bleak economic realities—student debt, job insecurity, a general distrust of big corporations and a fear of being ripped off. The economic fallout after the 2008 market crash still weighs heavily on their minds, and their resulting frugality isn’t all that different than their Depression-era grandparents and great-grandparents. Of course, there are exceptions, like the aforementioned bourgeois bohemians, who have money and spend it on $10 green juices and luxury kitchens. But, for the most part, we are dealing with a more financially conservative generation of buyers who are constantly looking for the best deal, even if it means a drop in quality.

Another possible explanation for these more price-conscious decisions may have to do with the transient nature of Generation Y’s post-college lives. The years of leaving college and moving right into a future family home are pretty much gone, and, as a result, they are moving around more and not as invested in one home. This might explain what motivates Lewis’ “IKEA generation” to make inexpensive choices. A survey of Houzz users revealed that 36% of millennials said they are remodeling their homes to increase value, with the intention of moving within five years, compared to an average 25% in other age categories.

It is also worth mentioning that corporate social responsibility plays a larger role than ever. According to Philanthropy News Digest, 7 in 10 young adults consider themselves social activists, and 4 in 5 would be more likely to buy from a company that supports a cause they care about. This includes charitable causes, sustainability, Made in America values and transparency. While eco-friendly flooring options remain a bit of a niche category for many retailers, it is likely to grow in importance as more millennials enter into buying power. They will be more interested in knowing where the product comes from, who made it and what will happen to it in the future. As it stands, most of this generation is not willing to pay more for these perks, but having a publicly socially responsible company is likely to increase the flow of millennials into your store.

Making connections

So, how does one meet this visual, educated, price-conscious, socially responsible consumer? It all starts with Internet presence.

“One thing that we needed to do is to make sure that our website fits into their mobile apps,” said Harris Cohen of Country Carpet in Syosset, N.Y. “That’s one of the biggest keys to hitting the younger generation. It’s all mobile, so your mobile site has to be there.”

While most retailers have presence on all the major social media sites, Facebook still seems to be at the top of most of their lists. Facebook now gives retailers the opportunity to market to certain demographics, with advertisements appearing in people’s newsfeeds. It is also the site that best bridges the gap between visual and informational marketing. But the more visual sites like Pinterest and Houzz have also been important to retailers. Macco’s company is even planning to redo its website to look like a Pinterest page. Whichever site retailers are using, some sort of infiltration into social media has been vital to each company’s evolution.

One of the most important things about social media when it comes to buying patterns is how it allows consumers to connect to other consumers. Jason Dorsey (“The Gen Y Guy”) estimates that 84% of Gen Y consumers rely on the opinions of other consumers to make decisions. In fact, his research has revealed that more millennials will make decisions based on the opinions of strangers, a.k.a. the Internet, than those of family and friends.

And that’s where social media comes in—specifically review sites and platforms like Yelp, Angie’s List, Customer Lobby and Trustpilot. Lou Morano of Capitol Carpet and Tile in Boynton Beach, Fla., values his Angie’s List reviews so much that he offers a 40% discount on the site’s membership when consumers sign up. Not to mention the fact that his mother, Loretta, personally calls every customer to measure satisfaction, and those reviews are then publicized on the company’s website. The combination of a strong social media presence, a mobile website and positive online reviews seems to be the perfect trinity of online marketing.

As Harris Cohen summarized, “Everything is important today. You have to be in social media, you have to maintain your reputation, you have to offer better product at better value with better service. Your salespeople need to be more knowledgeable because [millennials] are more knowledgeable. You need to be better in every aspect of business.”

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