PL Buyer: The ABCs of Reaching Gen X and Gen Y with Private Label
Through a special arrangement, what follows is a summary of a current article from Private Label Buyer, presented here for discussion.
Generation Y, or "Millenials" as they also are called, today represent the largest U.S. population segment -- more than 76 million strong. Add the 51 million members of Generation X into the mix and you have a large and powerful new customer segment to home in on for private label sales.
"They are looking to try products that are new and different and branding isn't as critical to them as it was to their parents," said Richard George, professor of food marketing at Saint Joseph's University, Philadelphia, Pa. "I think this should have the private label folks saying hallelujah."
For Gen X, time is a precious commodity, so retailers should reduce deadline pressure by offering meal planning and deals, and little indulgences like lattes to make shopping less onerous, according to a study, Mining the U.S. Generation Gaps, from The Nielsen Co. Childcare activity centers or computer kiosks keep kids engaged while parents shop. In-store cooking or craft classes offer family fun and a reason to increase trip count.
To reach Gen Y, consider upgrading piped-in music to current hits, the same study says. Coffee stations with battery chargers and in-store Wi-Fi let them kick back and review internet or mobile coupons and shopping lists. Convert their need for immediate gratification into impulse buy sales with enticing end caps and front-of-store bins.
Brand loyalty overall tends to be lower for these younger generations. In a recent survey of 865 Gen X and Gen Y consumers by AMP Agency, just three percent of respondents said they're loyal to a particular brand. The survey included baby products, consumer electronics, food and beverage, health and beauty and fashion categories.
Trading-down behaviors related to the choice of retailer, product or brand will lose some traction in the recovery, but private label brands (especially in fast moving consumer goods categories) will remain a significant factor due to their high-quality at lower prices.
"While Gen X-ers are smaller in number, they are a huge opportunity in today's economy," said Tom Bernthal, CEO of Kelton Research. "Gen X-ers remember the consumption culture of yesterday and long for it back. They are the ones that have latent desires to spend. Gen Y-ers, for the most part, are just now coming into the financial situation where they have disposable income. They don't have strong memories of how people spent in the pre-recession days."