Society has a long-standing tradition of each generation thinking the other generations are foolish. The Greatest Generation thought that the long hair and wild music of The Beatles was surely a sign of the coming apocalypse. Baby Boomers and Gen X pointed to Justin Beiber’s popularity as a clear indication that young people had lost their ever-loving minds (perhaps forgetting that they too had teen idols). While different generations might not agree on music or fashion, there is consensus on one key motivator influencing purchase decisions: cost.
Yes Lifecycle Marketing recently released a study of 1,000 consumers that examines the unique habits, attitudes and preferences of 4 generations – Centennials, Millennials, Generation X, and Baby Boomers. According to the survey, three of the four generations ranked price as the most important motivator for brand loyalty. And price came in nearly tied with quality for the other. What is causing this thriftiness and how can brands succeed in an environment of cross-generational penny-pinching? Read on to learn how each generation got to be this price conscious and how smart brands are reacting.
Generation Z (a.k.a. Centennials)
Centennials (consumers under the age of 21) were the only generation to list price as their second most important motivator after quality (55% vs 57%, respectively). The older members of Generation Z remember the turmoil caused by The Great Recession – a sharp economic downturn that lasted from late 2007 to the beginning of 2010 - which impacted their attitudes and behaviors on spending and saving. Price consciousness prevails with this group, but to a slightly lesser degree than the other generations.
Generation Y (22 to 37 years old) is known as being extremely frugal and it is no wonder. They watched as their parents’ savings were decimated during The Great Recession. They entered the workforce burdened with student loans and often couldn’t find full-time employment or had to take lower-paying jobs for which they were overqualified. Many Millennials have been forced to live with their parents well after entering the workforce and more than 40% say they still receive financial help from their parents. They are waiting longer than previous generations to have kids, get married and buy homes. In fact, Millennials are such spend-thrifts that some are comparing them to their grandparents’ generation which was deeply influenced by The Great Depression.
Members of Generation X (ages 38 to 52) have experienced multiple recessions since entering the work force. From the “Dot-bomb” era to the Great Recession - which hit right as many Gen X-ers were reaching their best earning potential - significant dips in the economy have turned much of this generation into deal-seekers. According to Yes Lifecycle Marketing’s survey, 55% of Generation X listed price as a top driver of brand loyalty and 85% listed price as the driver of their most recent purchase.