GEN Y MARKETING
Time to tap into the largest consumer group in U.S. history
National Jeweler
By Emma Johnson
The term "Gen Y," coined years ago, may conjure images of mall rats-girls with skin-tight jeans showing off the tops of their rumps, boys with enormous jeans that show off the tops of their rumps-all of them blaring their hip-hop music extolling the wonders of women's rumps.
There is an element of truth in every stereotype. But it is also true that Americans born between 1981 and 1995-also known as "echo boomers"-collectively spend a whopping $172 billion per year, according to one Harris Interactive study. And those are just the numbers for today's expenditures. Since this group is 57 million strong, the largest consumer group in U.S. history, it is also the future of spending everywhere. Including your jewelry store. Marketers have struggled to pin down the parameters that define this demographic group (some say its youngest members, born in 2005, are less than 6 months old) and they've grappled just as much trying comprehend the group's mysterious behavior.
This much they know: Gen Y is sophisticated, cynical, educated and demanding of a higher-quality buying experience. That is, its members are moved by products that boast socially conscious origins, unique stories and high-end aesthetics. And yet, Gen Y is also a group that strives to emulate celebrity culture.
While Generation Y's contradictions can be daunting, researchers and retailers alike have nailed down some behavior patterns of this elusive group-and, they can give concrete advice on communicating with its members. The most important thing, they say, is not to ignore Generation Y: It is your future.
"This group has enormous buying power," says Ramona Gautreaux, marketing manager of diamond and gemstones for Stuller Inc., the Lafayette, La., wholesaler which launched a program, Alternative Rocks, specifically targeting echo boomers. "It's the future of retailers' business. Getting them into the store and getting them interested in fine jewelry is imperative to the future of our entire industry."
Coming of age in a Cribs culture David Morrison, president of the Philadelphia-based research consultancy Twentysomething, Inc., says that jewelry is a perfect commodity through which young people express their generation's urgency to keep up with the Joneses. And in many
cases, the prescience is set not by the neighbors, but by the wealthy portrayed in the media.
"Generation Y has grown up watching all the bling on TV- from [MTV reality shows] Cribs to [My Super] Sweet 16, to their
favorite movie stars," Morrison says.
In a recent episode of MTV's reality show Black.White, an18-year-old casually unloaded $150 on a wristwatch. The pre-teen children of business moguls now make the society pages wearing five-figure designer gowns, at bat mitzvahs where A-list celebrity entertainers regularly perform for guests.
Such media mentions trickle down. American coming-of-age parties were once humble affairs held at the American Legion, but now, even small-town kids get large, elaborate parties where take-home favors can be a pair of fine pearl earrings, says Morrison.
"This is a jeweler's dream come true," he says. "Boomers are lavishing gifts on their children, and the children are not just accepting, but there's a pull of, 'These are things my classmates have.' It's a generation primed for upscale brands."
Jewelry is, and can be, an integral part of such indulgences. Boomers are big on celebrating occasions, from holidays to first birthdays and grade school graduations. For young children, wrist bracelets or pendants can launch the jeweler-Gen Y relationship. Hot Diamonds, the U.K.-based maker of sterling silver and diamond jewelry, has achieved enormous success with its target market of 17- to 30-year-olds. Since it launched in the United States three years ago, it has sold 800,000 pieces averaging $100 apiece, mostly to high-end retailers whose young clients like the prestige of shopping, but cannot yet afford steep prices, says Tim Lawrence, owner of the U.S. distributor Prismax.
It's certainly true for young clients at Sara Leonard Fine Jewelers in Westwood Village, near the UCLA campus in Los Angeles, which sells plenty of Hot Diamond goods to Gen Y customers, thanks to a combination of student-friendly prices, and the store's reputation for selling to celebrities and L.A.'s wealthy. "People do see that we carry things that are inexpensive, in addition to things that are $10,000 to a quarter of a million," says Linda Abell, the store's vice president.
But there is an age cap on star and brand power, says Nancy Robinson, vice president at market research firm Iconoculture. "Twentysomethings are not as thrilled about a pink diamond because J. Lo has one, especially when you can go to any H&M and see knockoffs," she says.
In any age group, it is critical to know your market. As Morrison says, a teen in Sycamore, Ill., is different than one in Miami. "If you can't afford formal research, try walking the mall and the local skate park," he says. "Ask [members of Gen Y] where they're getting their jewelry from. Just because you're the only store in town, by no means [can you assume that] you have a monopoly in the marketplace. This is a highly mobile and empowered market."
Small-town kids can make an annual shopping trip to the big city, or simply jump on the family computer and find jewelry. A generation that buys with its heart The celebrity factor can be a selling point when it comes to style. But in an age when entertainers' limelight can double as their soapbox, jewelry-related political issues are more transparent.
Peggy Jo Donahue, director of public affairs for Jewelers of America, says retailers should be prepared for this socially conscious generation to bombard them with heavy questions. After all, the media is ripe with reports of Leonardo DiCaprio's upcoming film, entitled The Blood Diamond, and Natalie Portman's Vanity Fair interview in which she denounces diamonds in lieu of $3 knockoffs.
"This generation is more likely to consider corporate responsibility issues," Donahue says. "They might ask, 'Are your diamonds clean?' They might say, 'I understand that gold mining is an incredibly filthy, dirty process. Where do you get your gold from?'"
In 2001, Brian Leber, owner of Leber Jeweler outside of Chicago, launched his Earthwise line, made of recycled gold and platinum and certified Canadian diamonds. He says young people are more eager for information than their elders-a trend that started snowballing 20 years ago, when diamond certificates became standard. However, he refutes researchers' claims that demanding open, honest jewelry sales associates is an activity relegated mostly to the under-30 set.
"People across the board respect someone who is open and honest," he says. "Our industry has not been saints historically. People appreciate a jeweler who acknowledges this, rather than someone who takes a weak-kneed, apologist stance." Robinson, whose full job title at market research firm Iconoculture is "consumer strategist, millennials," says the concern over conflict-free is just part of Generation Y's eternal quest for the genuine.
Quest for the authentic
"This group has a different approach to life and how they spend money," Robinson says. "In general, there is much more of an idea of personalization and authenticity."
As consumers, Gen Y-ers operate on what Robinson refers to as "rationalized indulgence." "They're willing to spend money, but they also have a higher sense of design," she says. "They have a feeling for heritage and the way a company runs itself. But if they think it's worth it, they'll bounce for it, no matter what price tag is."
Unique and personalized is key, and successful youth-oriented retailers know that. Nike has given customers the opportunity to create custom sneakers on their Web site, and Mini Cooper lets lucky buyers turn a wee $16,000 vehicle into a $30,000 roadster with personalized fittings. "These are people who, as teenagers, think nothing of spending $200 on jeans, then taking them home and taking scissors to them," Robinson says.
This group, after all, is the most diverse on the planet. Not only is 21st-century America a hodgepodge of cultures and languages, it is one of step-parents, grandparents and siblings, single mothers and two-household families. Paying attention to these sociological trends can mean forging a better connection with your customers.
Some jewelry retailers are getting the message. Last June, Reis Nichols in Indianapolis opened Preston's Rocks-a diamond-only store targeting younger customers with its Internet cafe and plasma TVs tuned to ESPN and CNN. The shopping experience is designed for shoppers looking for a low-hassle environment.
Prices are marked clearly on all items and the sales staff is noncommission. In January, Stuller launched its "Alternative Rocks-Have it Your Way Stuller Studio" targeting Generation Y. It invites shoppers to mix and match 60 colored gemstones, 14 stone shapes and thousands of mountings into unique and personalized pieces. "[Gen Y] is very interested in fashion, and customization is a hot-button item," says Gautreaux.
In researching Alternative Rocks, Stuller heard from Gen Y-ers who stressed what researchers back up: They do not want to feel as though they are being marketed to, and sales associates should skip any attempts to throw around buzzwords they think will resonate with the kids-these-days. Try this approach, and "they will sniff you out in a moment," Morrison warns.
Sara Leonard Fine Jewelers has had 60 years of success in selling to young people, Abell says, because the store's sales staff is trained to treat all customers equally-whether said clients are shopping for a $40 pendant or a $50,000 rare diamond. That sort of attention goes a long way with today's younger population, whose members tend to be especially educated and quizzical when it comes to fine jewelry.
"They ask a lot more technical questions about how the piece is made, and the gems in it, instead of just 'It's pretty and I like it,'" Abell says. And mom and pops can take heart. Robinson says Generation Y inherently is partial to small, independent stores-for political
reasons, and because indies are more in tune with the local vibe. "The independent has a leg up over the chain because it has an opportunity to offer something more artisan and less big-box," Robinson says.
To Grab Gen Y Clients, Think Like Them
• Read magazines like Vibe, XXL, Vogue, Seventeen and Rolling Stone.• Tune in to red-carpet events and MTV. This is where your present and future customers go for fashion direction.
• When designing marketing materials, show ethnic diversity-even if it doesn't reflect the population in your community. Teenagers often emulate stars who embrace their own heritage, even if it's different from the teen's.
• Make celebrity tie-ins whenever possible. Know which stars have their own jewelry or clothing lines. Find out who is behind the bling worn by the hottest names in celebritydom-and be sure to know which names those are!
• Don't worry about showing knock-offs. "This is designed to be similar to the necklace Beyonce wore to the Grammys," can be a powerful hook.
• Showcasing pictures of young, hot stars does not necessarily exclude your older customers. Twentysomething Inc. President David Morrison points out that pop chanteuse Gwen Stefani is often photographed in glamorous 1940s evening attire-a look that multiple generations can relate to. "Grandma is going to understand it-both generation are going to groove to it," he says.
• Instead of grandmother and mother rings, tell customers about jewelry that represents all of their family members-biological and step-parents, plus grandparents and other relatives.
• Tell stories. How was a piece made? Where are its stones from? Was it made by hand? What is the origin of the design? Elaborate on any aspect of a piece that makes it authentic and original.
Fielding Gen Y Questions
Members of Gen Y tend to be socially conscious, and their jewelry purchases are no exception. Peggy Jo Donahue of Jewelers of America, came up
with this sample dialogue to help jewelers handle sticky questions.
Gen Y: I don't think I want to buy diamonds-Natalie Portman says they're destroying Africa.
Jeweler: You must be referring to what are called "conflict diamonds." That was a tragic chapter in diamonds' history, when a small portion of diamonds were used illegally during the 1990s civil wars in Africa. But, we're strong supporters of the Kimberley Process, the United Nations-endorsed, government supervised program put in place in 2003 that now certifies all legitimate uncut diamonds around the world. Once certified
diamonds are cut and polished, they are traded through a voluntary industry system, so we know they are conflict-free.
Gen Y: What about gold mining? I've heard that it's a very dirty process that hurts the environment and mining communities.
Jeweler: There are some challenging issues with gold mining, to be sure. Some of our trade organizations are working on this issue. There is a Council for Responsible Jewellery Practices that works with gold miners, governments and activists groups to resolve these problems.
© National Jeweler/Emma Johnson