Gen Y Forces Retailers to Keep Up With Technology, New Stuff

The next time you see a member of Generation Y, show some appreciation.

In Gen BuY: How Tweens, Teens, and Twenty-Somethings Are Revolutionizing Retail, Kit Yarrow and Jayne O’Donnell say today’s teens, tweens and twentysomethings “were the least likely to cut back spending after the onset of the 2008 recession.”

What’s more, Yarrow (a consumer researcher and chair of the Golden Gate University psychology department) and O’Donnell (USA TODAY’s retail reporter) say the 84 million Generation Yers born from 1978 through 2000 are so influential they’ve changed shopping for all consumers. They call Gen Y “the taste-makers, influencers, and most enthusiastic buyers of today,” who will become “the mature, high-income purchasers of the future.”

Because of Gen Y, we have:

• More creative, technically advanced websites (50% of retailers redesigned their sites last year).

• A wide availability of online customer reviews (Gen Y writes half of them).

• A faster stream of product introductions (Gen Y gets bored fast).

• Bigger, more comfortable dressing rooms (Gen Yers like to bring in friends to review outfits).

Generalizing about any group this size is risky. And making broad declarations about this generation is especially dicey, because they pride themselves on being unique. Some Gen Yers loathe brands that others in their cohort love. Some prefer thrift-store finds to name brands. But the authors have done their homework. They surveyed 2,000 Americans, conducted 11 focus groups, interviewed hundreds of Gen Yers, spoke with retail executives and spent lots of time in malls.

They found that Gen Y not only decides what they’ll wear but often what their parents and grandparents will wear. The authors cite a Denver high school senior who persuaded her 70-year-old grandmother to get Uggs and her 93-year-old great-grandmother to shop at Chico’s while teaching her 50-year-old mother to text pictures so they could “keep each other in the retail loop.”

Says General Motors’ sales and marketing chief Mark LaNeve, “Younger people teach us what’s cool.” One of the book’s most intriguing findings is the “gaplet” between Gen Yers over 20 and under 20, which makes it hard for retailers to aim messages at the entire group.

Many older Gen Y members grew up without iPods or computers in their bedrooms and shopped within limits as teenagers. By contrast, most of today’s teens have cellphones (what the authors call “their third hand”) and high-speed Internet connections. The word “recession” isn’t in their vocabulary.

“My younger sister is way more into stuff than I was,” says Regina, 25, of San Francisco. “She not only wants more, she’s so much more particular about what she wants. I see young kids with $300 jeans and Coach bags.”

Recent sales figures, however, suggest that even Gen Y is feeling the economic pinch. Sales for four of the five favorite tween girl brands (Abercrombie, American Eagle, Hollister and Target) fell in August vs. a year ago. Only Aeropostale saw sales rise. Analysts attribute that bump to the chain lowering prices. The authors say Aeropostale’s success is partly due to having dressing rooms in the center of stores, letting Gen Y customers be the center of attention. To paraphrase Freud, what does Gen Y want? The authors say:

• Websites with free overnight or second-day shipping.

• Brands that resonate with them, through hip celebrities or causes.