Every specialty brand in America today must decide how to appeal to two arguably incompatible demographic groups. Eighty million Millennials will soon reach peak buying power. At the same time, Baby Boomers are entering new lifestyle stages – retirement, second career, empty nester – and so in many retail categories, brand loyalty is up for grabs, even as its 77 million members spend at an unprecedented pace. It’s a seemingly impossible feat: Choose to matter to a 65-year-old retiree and a brand risks compromising cachet and cool in the mind of someone as young as 18; solely target the 18-34 age range and risk ostracizing a demographic group with spending power – 40% of total consumer demand – that’s simply too big to ignore.
Complicating this strategic challenge for brands is the emergence of the fastest-growing demographic group in US history: The Hispanic Millennial. It’s a particularly acute strategic challenge for specialty brands, which can’t plant a flag in the vanilla middle like the mass players. Specialty brands have to stand for something: A lifestyle or life stage, an aesthetic or fashion sensibility. And in a consumer culture with a trend and hype-cycle that’s faster and more unforgiving than ever, how does a specialty brand define itself without limiting itself? How does it establish cultural credibility and relevance within youth culture without undermining its appeal across other generations, especially Boomers?
The in-depth research report by WD Partners, The Continuum of Cool, explores changing attitudes and emotional needs among two generations of specialty store customers – Boomers and Millennials, and this generation’s important subgroup: Hispanic Millennials. It provides specialty retailers a strategic foundation to navigate this enormous demographic divide.
Marketers must understand how consumers define cool, and how these distinct, often nuanced and tenuous perceptions impact the rise and fall of specialty brands. This study also addresses the most intractable challenges specialty retail marketers face:
- Should brands “age,” or morph and mature to follow loyal customers through life’s many stages and fashion evolutions?
- Or should specialty brands seek eternal youth and constantly replace customers with the next generation to stay culturally relevant?
- What are the commonalities that transcend time and generations and allow a specialty brand to navigate this demographic divide?
- How does social media and the explosion of digital platforms allow specialty retailers to become more than just an occasion-driven part of consumers’ lives?
- Is mindset and lifestyle a more accurate way for specialty brands to categorize consumer targets and market opportunities?
Highlights of Strategic Consumer Insights Identified
1. Identify and Prioritize Emotional Needs of Both Generations:
Millennials value brands that help them express and define identity; Boomers value specialty brands that make life better, but don’t need brands to define who they are. Millennials use brands more intimately at this stage in their lives. This is a generation completely saturated in media and entirely OK with rampant commercialization
2. How Millennials Define Cool: It’s All About Identity
Cool is a social construct; Millennials seek peer approval through the brands they choose and find aspirational specialty brands most appealing. They want brands that allow them to create a personal style; products that signal a lifestyle to others or denote membership in a distinctive social tribe. Millennials define themselves with imagery of athletes, retail stores and pop culture. Celebrities resonate most with this generation, as well as reality TV, sports, cars and food. Technology no longer serves as a way for this generation to signal difference; it’s ubiquity and thorough lifestyle adoption defines the entire generation, so no longer serves as a way to define identity.
3. How Boomers Define Cool: It’s All About Relevance
As people age, they don’t become less concerned about fashion, trends and what’s considered cool; it’s just these kinds of constructs become less relevant to how they structure and create identity. Boomers still want to try the latest cup of coffee; dabble in the freshest fashion trends; and stay up-to-date on the technological change. Yet, unlike Millennials, it’s less about identity-formation and more about making life easier or empowering communication with family and friends.
4. The Common Ground: Health, Wellness and Good Works
Our research shows that broader consumer trends around organic food, local buying, healthier lifestyles and corporate philanthropy, appeal to both generations. It’s the most robust area of cross-generational appeal. Brands that communicate with messages of health, wellness and good works resonate most deeply with consumers of all generations.
Goals of study:
Provide specialty retailers access to proprietary research that reveals the vulnerabilities and potential strategic missteps they face navigating the Boomer-Millennial divide.
Design and Methodology:
In April 2012, our consumer insights team, led by executive director Michelle Fenstermaker, conducted 20, four-person in-depth focus groups with Millennial, Gen X and Boomer specialty retail shoppers. For geographic diversity, we conducted focus groups in both San Francisco and Columbus, Ohio. This research then informed the design of our quantitative study.
An in-depth panel of 1,200 consumers, including 600 Millennials and 600 Boomers, was formed during June 18-22 of this year. Of those respondents, approximately 20% were Hispanic. Respondents ranked 41 specialty brands on the continuum of cool. We have also included insights gleaned from other studies, specialty retail industry sources and demographic experts to inform the research results and strategic recommendations.
Specialty Brands ranked in the study:
Abercrombie & Fitch, American Eagle Outfitters, Ann Taylor, Ann Taylor Loft, Anthropologies, Banana Republic, Chico’s, Eddie Bauer, Express, Forever 21, The Gap, Gymboree, H&M, Hollister, Hot Topic, J.Crew, Levi’s, The Limited, Lululemon, Men’s Warehouse, Old Navy, Pac Sun, The North Face, Uniqlo, Urban Outfitters, Victoria’s Secret, Zara, West Seal, Pink, Claire’s, Game Stop, Nike, Radio Shack, Sephora, Staples, Starbucks, Trader Joe’s, Build-A-Bear, Coach Fossil, Swatch.