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The keys to unlocking the value of Generation Y

The Millennials, also known as Generation Y, are coming of age. Media depictions of individuals born between 1980 and 2000 vary widely – from fickle, carefree consumers, to debt-riddled eco-warriors. However, with the oldest in the generation now firmly in their mid-thirties, they are rapidly approaching an age when they will begin taking up senior management positions en masse. There is no question that Generation Y’s spending power and workplace influence now make this a group to be reckoned with. Now is the time for ambitious organisations to sit-up, and consider how they can engage with this lucrative market segment in a meaningful way going forward.

Digital Natives

A key trait of Generation Y is that they are online natives, and as such, digest news and opinion differently to their predecessors. Whilst all demographics are now transitioning to online media consumption, older groups tend to remain affiliated to chosen publications, simply digesting this online rather than through print. Conversely Generation Y sources their chosen commentary through more bespoke media.

Today, more than ever, Generation Y can read what they want to hear. Online publications can operate in tight niches and remain economically viable enterprises by their ability to target specific users. Generation Y also contribute more to discussions than ever before, conversing with each other ‘below the line’, in comments sections of online news outlets, and directly via social media.

Sceptical perceptions

Regardless of their opinions and political outlooks, Generation Y shares a common trait – scepticism. Whilst this trait is indeed shared across generations, Generation Ys will quickly and instinctively seek and find countering views to a given headline, or indeed corporate pitch, based upon deeper and more impartial research in an article elsewhere.

We recently looked into the new investor tribes, and the found that these new groups and demographics are set to shake things up. While it’s critical that businesses across sectors adapt their practises for this age-group, those in the financial sector are under particular pressure.

An uneasy relationship with the establishment

Generation Y has suffered steeply at the hands of institutions. Central banks, investments banks, and ‘establishment’ politicians are perceived with distinct ire. They have witnessed, and indeed continue to witness, a crippling increase in housing costs, which can be accurately attributed to the actions of these three groups. The growth in house prices has created a vicious circle of increasing rents, making it harder to save, and harder to reach the first run of the housing ladder.

Generation Y are the most marketed-to generation yet, and as such, have learnt to interrogate any information fed to them. Savvy brand marketers now know that content – what you provide and how it is provided – is key for engaging this group, and the concept rings just as true for the investment community. This demographic will value professionals who distil and lay out relevant information, but leave them to draw their own conclusions and act on this as they see fit.

The rise of peer-to-peer services

With a characteristic mistrust of authority, this demographic places great store by the opinion of their peers. This, combined with their ease on social platforms and aptitude for building networks, may well explain the astronomic rise of peer-to-peer platforms over recent years. Why pay hundreds of pounds for an expensive hotel room, when you can use Airbnb to rent an entire flat for half the cost? ‘Disruption’ has become a buzzword, however the reality is that every business model is under threat, and that these threats can take hold with startling speed.

When it comes to investing, previous generations have viewed profit as the most important signifier of business success and investment attractiveness. Nevertheless a strong sense of social responsibility sits high on the agenda for Generation Y, caused by a lack of perceived social responsibility toward themselves by other groups. This generation wants to altruistically leave the world in a better place than they found it, and they’ll be far more likely to invest in ventures that offer cultural and social, as well as financial gains.

Investing in change

Generation Y’s affinity with technology is likely to translate into an affinity for tech investment, it is also impacting the way they like to invest. As discussed previously on this blog, we are also seeing a significant increase in online wealth management platforms, which enable users to manage their portfolios from the comfort of their homes, again with the required high level of transparency.

Not all businesses can transform their business models overnight to offer social-based services which can engage with and grow into the increasing spending power of Generation Y. All businesses can however, take steps to improve the transparency, and honesty of their propositions, to better engage with this progressively important customer segment.

This was posted in Bdaily's Members' News section by David von Dadelszen .