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The Next Wave: Understanding Y
By Betsy Russell
Brace yourself for the biggest thing to hit your sales offices since the Baby Boomers because the next generation of new home buyers is a force to be reckoned with. At 74 million strong, estimated to be three million larger than the Baby Boomers, Generation Y (or Echo Boomers) is our industry’s next big opportunity.
Mayberry or Blackberries?
Opinions vary as to the exact age of Gen Y, but most agree that they are currently in their early teens to mid-twenties. In order to understand how to market new homes to this imposing group, we must first understand what makes them tick.
In contrast to Generation X, the Echo Boomer’s parents were much more closely involved in their lives. Even though one in four of them are from a single-parent household and three in four had working mothers, they are an optimistic, positive, confident, and self-reliant group. Surprisingly, they also tend to be much more structured and conventional than previous generations, most likely in an effort to counteract the chaos of the world they grew up in. Because this generation experienced a closer relationship with their parents than previous ones, they have dealt with less drug addiction, unplanned pregnancy, suicide, and delinquency. What’s more, they also comprise the most religious bracket in the U.S. population and are more likely to participate in volunteer work.
In contrast to Gen X before them, Gen Y looks for social consensus instead of pushing the limits. Due to the pressure they’ve felt from their parents and society to achieve, they don’t fit the “slacker” stereotype of Gen X. It is important to understand that this is the first generation in U.S. history that will likely not live above the means of their parents. Yet, because they’ve come from dualincome and single-parent families, they’ve already been given considerable financial responsibilities and will thus be extremely savvy consumers. Additionally, they assume that rising salaries will eventually cover their financial obligations, so most are comfortable carrying debt.
Furthermore, Generation Y is the most ethnically diverse generation yet, with 38 percent non-White. While they are less concerned with race, gender, or ethnicity than their parents, they may be moving toward increased sensitivity to economic class. Technology is second-nature to this group. They are the first generation to have grown up with computers versus having to learn and adapt to technology like their parents did. To them, technology is an expected part of life instead of an advancement. Some have even gone so far as to call this generation the “Mayberries with Blackberries” to describe their conservative yet technology-oriented nature.
What You’ve Been Doing Won’t Work
When marketing to this group, do not make the mistake of assuming that what worked for Generation X will work for them. The Echo Boomers have been bombarded by advertising messaging since birth, so they are naturally resistant to them. For traditional advertising to work with Gen Y, ads must be fast, direct, unpretentious, honest, funny or ironic. The Volkswagen campaigns are an exceptional example of how ads can be geared to this generation with honesty and humor. Also bear in mind that these consumers tend to assume the worst about companies trying to coax them into buying something; therefore, you’ll have to capture their attention by bringing messages to the places they congregate.
Generation Y desires for you to build a brand with them, not for them. Because they trust each other, brands and products are made popular by word of mouth. In some senses they are a marketer’s dream; they will choose to buy your home simply because it is cool to do so. Builders and developers able to create the “cool factor” buzz will lead the pack with this next generation. But please don’t try to be cool at the expense of honesty — these savvy consumers will see right through it. Moreover, grassroots marketing efforts will prove more effective with this group than ever before. That means you should try things like “wild postings” (posting advertising messages at popular gathering spots), sponsorships of events that are drawing a younger audience, and hand-outs at hot spots. Figure out how you can meet Gen Y where they are, and create an honest buzz. This will go a long way toward enticing this group of buyers to purchase your homes.
Techy and Savvy
The fracturing of media and options like Tivo and satellite radio are causing Gen Y to rely on the Internet in the same way that that Baby Boomers relied on TV. Echo Boomers believe that if a company cannot effectively communicate via email there must be something wrong with them. Because of the accessibility of information during their formative years, Gen Y is sophisticated and research oriented, believing that knowledge is not only power, but that it is cool. If you do not already have a highly interactive and informative Web site and eBlast communication model, create one. Without it, you risk losing the biggest group of new buyers in the market. Although as a group Gen Y currently owns only seven percent of all U.S. homes, most expect to have careers and are already thinking ahead about home ownership. In fact, according to the National Association of Home Builders, 26 percent plan to buy a home in the next two years. These new consumers will be looking for utility and size versus prestige in a new home. Also according to the NAHB, 56 percent of them are searching for more space in their home than they currently have, and a full 90 percent prefer a single-family detached home over a multi-family product. In addition, these buyers seem to prefer two-story over ranch-style homes.
More than anything, don’t forget that Gen Y is comprised of savvy consumers. They want it all. This group expects a high quality product with sophisticated amenities in a convenient location. They are more likely to put more of their income into their home. After watching the fall of their parents’ tech stocks they are wary of paper investments and are likely to invest more in real estate.
Generation Y has some common interests as far as materials and function go. Most seem to appreciate glass, metal, aluminum, bold colors, lofts, lots of light, and open floorplans. High-speed Internet access is critical for these buyers.
Don’t Miss Out
Gaining the respect of Gen Y and turning them into your home buyers is one of the biggest opportunities on the horizon. However, we can’t keep marketing the same way and expect them to come to us. The good news is that they are going to be looking for homes — all 74 million of them. Now, we just have to understand how to connect with them and meet their housing needs.
Betsy Russell is the principal owner of First Story, a full-service real estate marketing and consulting services firm located in Denver, Colorado. Betsy is a CMP, CSP, and MIRM. She co-chairs the PR and Branding Committee for the Metro Denver SMC. She also chairs the Marketing Committee for the HomeAid Colorado Annual Fashion Show. You can contact Betsy at 303-929-3559 or betsy@firststorymarketing.com.
This article originally appeared in the Jan/Feb 2006 issue of Sales + Marketing Ideas magazine.
Mayberry or Blackberries?
In contrast to Gen X before them, Gen Y looks for social consensus instead of pushing the limits. Due to the pressure they’ve felt from their parents and society to achieve, they don’t fit the “slacker” stereotype of Gen X. It is important to understand that this is the first generation in U.S. history that will likely not live above the means of their parents. Yet, because they’ve come from dualincome and single-parent families, they’ve already been given considerable financial responsibilities and will thus be extremely savvy consumers. Additionally, they assume that rising salaries will eventually cover their financial obligations, so most are comfortable carrying debt.
Furthermore, Generation Y is the most ethnically diverse generation yet, with 38 percent non-White. While they are less concerned with race, gender, or ethnicity than their parents, they may be moving toward increased sensitivity to economic class. Technology is second-nature to this group. They are the first generation to have grown up with computers versus having to learn and adapt to technology like their parents did. To them, technology is an expected part of life instead of an advancement. Some have even gone so far as to call this generation the “Mayberries with Blackberries” to describe their conservative yet technology-oriented nature.
What You’ve Been Doing Won’t Work
Generation Y desires for you to build a brand with them, not for them. Because they trust each other, brands and products are made popular by word of mouth. In some senses they are a marketer’s dream; they will choose to buy your home simply because it is cool to do so. Builders and developers able to create the “cool factor” buzz will lead the pack with this next generation. But please don’t try to be cool at the expense of honesty — these savvy consumers will see right through it. Moreover, grassroots marketing efforts will prove more effective with this group than ever before. That means you should try things like “wild postings” (posting advertising messages at popular gathering spots), sponsorships of events that are drawing a younger audience, and hand-outs at hot spots. Figure out how you can meet Gen Y where they are, and create an honest buzz. This will go a long way toward enticing this group of buyers to purchase your homes.
Betsy Russell is the principal owner of First Story, a full-service real estate marketing and consulting services firm located in Denver, Colorado. Betsy is a CMP, CSP, and MIRM. She co-chairs the PR and Branding Committee for the Metro Denver SMC. She also chairs the Marketing Committee for the HomeAid Colorado Annual Fashion Show. You can contact Betsy at 303-929-3559 or betsy@firststorymarketing.com.
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