Digital CPG Blog

How well do you know Gen Y?

Here are some interesting points for discovery that get us thinking beyond what we think we know today:

• 59% update their social status in class.
• 29% find love through Facebook while 33% are dumped via TXT or Wall posts.
• Millennials watch TV with two or more electronic devices.
• Only 11% define having a lot of money as a definition of success
• Gen-Y will form 75% of the workforce by 2025 and are actively shaping corporate culture and expectations.
• Only 7% of Gen-Y works for a Fortune 500 company, while startups dominate the workforce for this demographic. Gen-Y expects larger organizations to hear their voice and recognize their contributions, increasing the need for an intrapreneurial culture.
• Millennials trust strangers over friends and family. They lean on UGC for purchases.
• They are 3x as likely to follow a brand over a family member in social networks.
• 66% will look up a store if they see a friend check-in.
• 73% have earned and used virtual currency.
• Gen-Y believes that other consumers care more about their opinions than companies do, which is why they share their opinions online.
• Gen-Y’ers are more connected on Facebook than average users, managing a social graph of 696 Facebook friends versus 140.

The Last Ten years

• 274 million American have Internet Access, which is more than double that of 2000.
• 81 billion minutes spent on social networks and blogs.
• 64% of all mobile phone time is spent on apps.
• 42% of tablet owners use them daily while watching TV.
• For the first time, the numbers of laptops have surpassed desktops within TV homes.

Women Rule Gen-C

In 2009, I discovered that in social media, women rule. As you can see in Nielsen’s report, women too rule Gen-C. Specifically, they rule social media, online video, and TV viewership. With smart phones, men and women are tied in adoption. With tablets however, men rule.

Mobile shopping activities include:

• 38% compare prices online while in shopping in a store.
• 38% browse products through websites or apps.
• 32% read online reviews of products.
• 24% search for or use online coupons.
• 22% have purchased a product.
• 22% scan barcodes for product or price information.
• 18% use location-based services to find retail locations.
• 27% of male and 22% of female consumers would use their mobile phone to make payments in restaurants and shops if they could.

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Influencing millennial-generation consumers through an ad remains far more difficult compared with other generations because of the low immediate and delayed recall rate. Millennials have 43% immediate recall and 24% delayed recall of an ad, compared with 50% and 23% for Generation X, 54% and 21% for baby boomers, and 54% and 18% for seniors, respectively. The study suggests that it is important to show the product longer, make the brand name more visible, and have more mentions throughout the campaign.

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Marketers that are trying to connect with millennials ages 18 to 34 to promote products and services related to love and Valentine’s Day might want to consider tapping social influencers who produce user-generated content (UGC). This generation trusts people rather than brands, and values the opinions of like-minded strangers as much as people they know, according to a new study scheduled for release Monday titled “Talking to Strangers.”

Strangers appear to have the most influence when it comes to making a purchase. About 51% of millennials are more likely influenced by UGC produced and posted by strangers, compared with recommendations from friends, family and colleagues, but only 34% of boomers agree.

In fact, 84% of millennials report that UGC from strangers has some influence on what they buy. That’s because 65% of millennials believe UGC offers a more honest and genuine view online, and 86% believe the content represents a good indicator of the quality of a brand, service or products.

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Millennials don’t respond to TV ads as much as their elders. Younger people were less responsive to TV ads in studies from 1961, 1988 and 1999, and the differences are actually narrowing. The average lift in share of choice among millennials (ages 16 to 29) was 4.6 percentage points in 2011, compared with 6.4 points for boomers. But in 1988, there was an even bigger generational divide of 10.5 to 13.8 points.

Millennials are about as responsive to digital ads as other generations. The average share-of-choice lift for millennials for digital ads in the 2011 study was 6.0, vs. 6.8 for boomers and 6.4 for seniors, a much smaller difference than with TV.

Millennials respond to the same advertising approaches as prior generations. The biggest needle-movers for them in TV ads are brand differentiation, competitive comparisons, information about new products or features and superiority claims. Showing the product and the brand or logo longer also helps. So, sorry, all you agency creatives out there. You haven’t heard the last of “make the logo bigger.”

Millennials are more engaged in all kinds of media than older folks. In ComScore tests that ask people about how much value they place on a program or website, millennials had engagement scores that were on average 10.3% ahead of boomers for TV programming, but an even bigger 22.2% gap over boomers on digital media. Seniors had the lowest engagement scores.

Millennials may respond less to TV ads, but at least they remember them longer. Millennials are less likely than their elders to recall an ad immediately after seeing it, losing by a 43%-to-54% margin to boomers and seniors on this front. Three days later, it’s a different story, as 24% of millennials on average remember an ad vs. only 18% of seniors.

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While the Gen Y, or people born between 1980-2000, are in fact “digital natives,” that doesn’t mean theyare actually most reachable via social media marketing.

When looking at which types of decisions influence purchase decisions for electronics, 46.9% of Gen Y’s are most influenced by in-store promotions, 44.3% by word-of-mouth marketing and 39.8% by Internet advertising.

Only 28.7% were influenced by social media, which makes sense given the fact that you are whatyou’re more likely to be what you “like” on Facebook, not “what your friends like.”

Here are the top new rules of engagement to effectively reach Gen Y moms across digital platforms:

The 24-hour rule: 46% of Gen Y moms expect brands to update their profile pages on Facebook daily, compared to 37% of female consumers. Sixty-four percent of Gen Y moms also expect to hear back from brands within a 24-hour window. Marketers need to make sure that their social networking strategies reflect this sense of immediacy, as well as meet age-old expectations for great, reliable service.

Get your game on: Women, and moms in particular, increasingly lead social and casual gaming. Today, 75% of women (and 77% of moms) have at least one gaming app, compared to 67% of men. Companies like Groupon, Living Social and DailyCandy Deals have effectively tapped into this game mentality, using flash sales and daily deals to build anticipation. Whether you develop a game to build your brand, or reward patrons with virtual currency, this is an opportunity to win big with female consumers.

Rethink loyalty: Loyalty programs are losing significance among consumers as a faster pace online and offline puts a premium on living in the now. With 66% of Gen Y moms claiming that brand loyalty constitutes usage of only six months to a year, brands need to rethink what it means to have “loyal” customers and consider developing a relevancy program instead. Marketers must ask themselves whether their brands are in the right place at the right time with the right information.

Curated serendipity: Offering filtered content is an effective and necessary way to cut through the clutter. But to fully engage moms, there must be room for serendipitous discovery. 87% of women and moms agree that they would rather participate in a one-day flash sale than a weeklong sale. Brands should create the possibility for surprise. E-commerce companies, for example, should take into account the element of spontaneity that happens in offline shopping — the moment of delight when someone discovers or stumbles across a perfect item they weren’t expecting.

Loved these tips from MediaPost as they won’t just mean making your Gen Y customer base happy, but everyone. Here are the top new rules of engagement to effectively reach Gen Y moms across today’s powerful digital platforms:

The 24-hour rule: With information at our fingertips 24/7, consumers have a new definition of what is current and timely. 46% of Gen Y moms expect brands to update their profile pages on Facebook daily, compared to 37% of female consumers. Sixty-four percent of Gen Y moms also expect to hear back from brands within a 24-hour window. Marketers need to make sure that their social networking strategies reflect this sense of immediacy, as well as meet age-old expectations for great, reliable service.

Get your game on: Women, and moms in particular, increasingly lead social and casual gaming. Today, 75% of women (and 77% of moms) have at least one gaming app, compared to 67% of men. Companies like Groupon, Living Social and DailyCandy Deals have effectively tapped into this game mentality, using flash sales and daily deals to build anticipation. Whether you develop a game to build your brand, or reward patrons with virtual currency, this is an opportunity to win big with female consumers.

Rethink loyalty: Loyalty programs are losing significance among consumers as a faster pace online and offline puts a premium on living in the now. With 66% of Gen Y moms claiming that brand loyalty constitutes usage of only six months to a year, brands need to rethink what it means to have “loyal” customers and consider developing a relevancy program instead. Marketers must ask themselves whether their brands are in the right place at the right time with the right information.

Curated serendipity: Offering filtered content is an effective and necessary way to cut through the clutter. But to fully engage moms, there must be room for serendipitous discovery. 87% of women and moms agree that they would rather participate in a one-day flash sale than a weeklong sale. Brands should create the possibility for surprise. E-commerce companies, for example, should take into account the element of spontaneity that happens in offline shopping — the moment of delight when someone discovers or stumbles across a perfect item they weren’t expecting.

What do those young’uns want?

Well, as a Gen Yer myself, I can say this recent study is right on:

In general, you can remember that Gen Yers like to shop as an experience, not just a chore and all the things they tend to like fall under that idea. For instance, we love deli counters and prefer brands with a well-developed social and mobile media presence. Is your CPG brand set up to serve and reach the millenial generation?

Generation C is here and we’re always connected and want everything at the speed of a click. What does that mean for the stalwarts of CPG? Well, it’s another C word – change!

“Most people are not as good at dealing with change as they think they are,” said P&G’s VP of e-commerce, Alex Tosolini. While he personally has moved about once every three years in his P&G career, he said some employees have essentially been in the same office for 27 years.

“I personally believe one of the skills of the future will be the ability to thrive on the change,” he said.

Blurring of the marketing and sales/distribution functions is one of those changes, Mr. Tosolini said, noting that Facebook is both a marketing and a distribution channel as P&G has worked to develop “f-commerce” capabilities on its fan pages, fulfilled by Amazon, which has become a top 10 retail account for Pampers.

“All of a sudden the traditional model of marketing does this, sales does this is blurred,” he said. “Think about the implication for big companies on their need to adjust their reward system, their skill development, their training of their people to understand how to cooperate and work in this new environment.”

Are you seeing your organizational structure change? Are your marketing and sales departments mesh and merge? How will the new digital economy shape how your company is structured?

The news just keeps getting worse for brands trying to reach that millenial generation.

“According to a new report from Forrester Research, just 6 percent of 12-17-year-olds who use the Web desire to be friends with a brand on Facebook, despite the fact that half of this demographic uses the site,” reports ReadWriteWeb.

“”Even scarier for brands: Young people don’t want brands’ friendship, and they think brands should go away,” reports AdWeek.

“So what should brands do? According to Forrester’s report, they might be better off being more reactive than proactive, and they should listen. Just 16 percent of young consumers expect brands to use social media to interact with them, and 28 percent expect those brands to listen to what they say on social sites and get back to them”

Eh, I’m not so sure. Maybe brands could just be smarter about how they’re engaging online, as I suggested last week. That doesn’t mean not getting involved, but creating campaigns, content and engagement that has been deeply curated and cared for. The thing with Gen Y is, they can see right through you. Brands will have to be better, and all consumers will be better for it.

Despite the fact that we’ve been talking about innovative sampling campaigns this week, a new nationwide survey reveals that a free sample just may not be enough.

In the survey, 78% of shoppers ages 21 to 25 said they prefer discussing a product with company representatives over standing in line to receive samples. They said learning about a product through discussions and demonstrations will prompt them to think more highly of it and recommend it to others.

“Millennials stated that they think more of companies that take the time to discuss a product or service in person and they are more likely persuaded towards trial and discussion. Most importantly, after this engagement most Millennials would actually refer a friend to try the product after a good consumer engagement and promotional experience,” reports Progressive Grocer.

“Essentially, it comes down to a personalized engagement where a product representative takes an interest and is able to offer knowledgeable information on their product, the competitor’s products and answer other various questions that may arise. This will help ensure a more memorable and successful consumer engagement.”

“Surprisingly in this age of Facebook and Twitter, the younger they are, the more they want face-to-face, informational engagements. Therefore, it can be discerned that if a company wants to attract younger people to its brand and build a longer relationship, that face-to-face engagement with knowledgeable people for the product must be part of any experiential and promotional campaign.”

I think this is indicative of the free culture that Gen Y is used to. Everything on the internet is free; we’re not impressed or enticed with free. What is enticing and impressive is a brand being authentic and taking the time to champion their products in a very real way.

While it will surely be difficult for brands to implement nationwide experiental marketing campaigns to achieve such connections, I do think that they could use Facebook and Twitter. Think a brand-customer Q&A discussion or a live video chat. That might just bring the loyalty as well…