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From millennials to the silver economy: different generations of consumers

    • Venice
    • 13 October 2017

          Kick-starting discussions at this Aspen Seminar for Leaders session was the observation that the traditional concept of the “generation” has made a comeback in public debate. This, in the age of breakneck disruptive change and without there having been, as in the past, any war or pestilence between generations – at least, not in the western world. The return of the concept of the collective as embodied by generations might appear to be in contradiction with an era as “me”-focused as is the present day. Indeed, it was noted that the use of the first person “I” is so pervasive that it has even become part of the brand name of many trendsetting products. At the same time, however, it was acknowledged that consumption, since it is often not necessity-driven, is no longer epitomized by objects but by lifestyles. Hence, consumption is increasingly meeting perceived rather than physical needs.

          In order to analyze the different approaches to consumption taken by the various generations, it was deemed necessary to try and draw some demarcations between them first. While acknowledging that the dividing lines can get a bit blurred, it was suggested that the standard classification distinguishes between three macro-generations of consumers: at the bottom end of the spectrum come the millennials, which encompasses people aged 14 to 35; at the top end are the so-called silver-agers, that is, the over-55s; whilst occupying the Tolkienian Middle-earth, as it were, is generation X, redubbed the “new normals”.

          Millennials were characterized as fast and mobile. Born in an already digital world, they do not spurn traditional media, such as television, though their consumption thereof of is different and more active than that of their parents. They are a generation that pays great attention to food and eating styles. This cohort’s relationship to trust is marked by a major contradiction: while reposing much confidence in peers, which is what underpins the sharing economy, they are fundamentally mistrustful of the future, as the statistics for NEETs demonstrate (with a national average of over 20%, peaking at 40% in some parts of southern Italy). This contradiction makes them a vulnerable group and, as such, very attentive to news, which they require to be delivered transparently and in real time. Hence, millennials are more difficult to win over: they do not accept one-way communications. More particularly, the participants characterized millennials as the non-exclusive purveyors of certain trends and as being principally distinguished from other generations by their attitudes towards (i) technology, (ii) sexuality, and (iii) the environment. This is a generation which, coming onto the deck of a great ship, would head forward to eye the promised land.

          Turning to the generation of the silver economy, it was highlighted that, contrary to popular belief, this group is and will continue to be drivers of consumer trends. Indeed, statistics clearly show that the silver demographic is growing, especially in more developed countries. In Italy, they account for around 15% of the population, compared to 12% across Europe. Currently, those aged 55 have half their lifespan already lived still ahead of them, which is a relatively long prospect, which has a significant impact on the consumer and investment choices of these individuals. This is the generation that has weathered many changes, and particularly, the transition from analogue to digital, which digital natives by definition have not faced. This could result in a momentous rift, since the analogues are at the top of all social, institutional, and economic pyramids, while beneath them is an “army” of digital natives. This requires them to keep continuously up-to-date in order to be able to dialogue with millennials. Hence, products and services initially designed for the latter have become part of everyday life for silver-agers – both at work and in private life. Cited as a case in point is the role being played by new technologies, such as Skype or WhatsApp, in communications between grandparents and grandchildren. Lastly, as members of the silver generation grow older, they have need of different products and services because they face a change in the ratio between time spent at work and in leisure. This is a generation that, on the deck of that proverbial ship, would perhaps head aft to look back at horizons past.

          Between the millennials and the silver-agers lies the middle ground of the new normals, viewed as unquestionably the most difficult generation to pin down. Nevertheless, members of this group exhibit a marked common trait, which is that of living and consuming while imbuing significance to experiences, but above all, to purchases. The new normals make up the overwhelming majority, driving consumption and therefore GDP. They are more discerning than the previous macro-generation (the silver-agers) and the next (the millennials). The new normals are a very demanding generation, but they are also very conscious of price and, in particular, of any perceived mismatch between price and value, where the latter is a function of the exclusivity and significance of the product/service being consumed. On the aforementioned ship, this generation could go forward or astern, and would probably move between one and the other, thereby affecting the cruising speed.

          It was stressed that such a varied and complex generational landscape has had and will have an impact on global market change, and requires the sort of business approach that can be aptly illustrated by borrowing a metaphor from physics. In essence, businesses need to create gravitational fields of attraction by offering integrated services and products that – even if distinctive from each other – are linked by the customer experience that they evoke. Cited as the most striking demonstration of this are behemoths like Amazon, which offer every conceivable product but always with the same consumer experience. Said gravitational systems must be grounded in experiential orbits in order to increase their pull. Customers require and demand an authentic experience, and businesses must tap into this need. It was noted, for example, that shopping malls are seeking to boost their appeal by offering services (such as cinemas, spas, and so on) in line with a retailtainment model. Finally, the participants pointed to the desirability of investing efforts in strengthening the pull of such business gravitational systems, with the help of ambassadors who genuinely and credibly embody the core values of the business.

          The final element identified – and one which links the various generations – was the concept of time. Indeed, it was urged that time is where the new high-end market – which is not just about money – plays out. People want to spend their time satisfyingly, experiencing stories that are not only told (storytelling), but also lived (story-doing), subject however to one non-negotiable condition: the stories must be authentic and credible. Hence, while Italian style could serve as a gravitational field capable of attracting consumers, its appeal needs to be put across in a more decisive and credible manner.

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