Things are more expensive than they used to be.
\r\nTake home ownership and cars, for example, the two pinnacles of middle-class Baby Boomer acquisitions that helped fuel the post-World War II economy.
\r\nAccording to Time Lemke of the Wise Bread personal finance website, The Case Shiller Home Price Index shows current housing prices have increased by about 40 percent, even adjusting for inflation, compared to the period between 1960 to 1980.
\r\nThe average price of a car is $10,000 more expensive in today’s dollars that it was nearly 50 years ago.
\r\nRelated Article: Going Millennial: The Perks of Hiring Generation Y
\r\nHere are a few other things that were more easily affordable to Baby Boomers than Generation Y and X consumers:
\r\nThis has implications not only on marketing to different demographics, but how it affects the economy and, thus, new business ventures. Consider the case of the Ford Fiesta, as reported by Derek Thompson and Jordan Weissmann in The Atlantic.
\r\nThe Fiesta was a small car Ford sold in Europe. In 2009, the Fiesta was introduced stateside specifically to target Millennials. Despite some initial social media frenzy (because that’s all you need to do get the attention of Gen Yers, right?), sales have steadily declined. Why? Because Ford was selling cars the way it always has, promoting a mix of performance, image and experience. The problem was, while Baby Boomers as a whole may perceive the car as a sexy means of escape from suburbia (even if they were in fact buying vans to transport their kids), Gen Yers and Xers see it as, well, just a mode of transport that someone else can provide.
\r\nOf course, affluent segments are always going to go for the “sexy” attributes of luxury brands, regardless of demographic. But, today, what sells to the average car consumer under the age of 40? Affordability — because everything is so much more expensive. And if there’s a good interface with an iPhone — note how car ads today are more likely to tout wi-fi connectivity over horsepower or handling.
\r\nAssuming, of course, that in today’s sharing economy, coupled with an exodus from suburbia to the city among twentysomethings, the average consumer wants to deal with the hassle and expense of a car in the first place; it’s much easier and with less capital expenditure to just order up a Zipcar or Uber driver when you need it.
\r\nRelated Article: 10 Surprising Facts About Millennials and Content Marketing
\r\nIndeed, an Alix Partners study reported that car sharing has displaced vehicle purchases in 10 metropolitan areas at a rate of 32 to 1! Lesson learned: In the same year that the Fiesta sales hit a new low of a 30 percent decline, Ford entered an agreement to become the world’s largest vehicle supplier to Zipcar University program. More recently, Ford introduced its own Peer-to-Peer Car Sharing program in a pilot program for six U.S. cities and London.
\r\nAccording to The Wall Street Journal reporter Laura Kusisto, builders are making fewer starter homes aimed at the less-affluent buyers that typify younger demographics. The share of first-time home buyers in the U.S. fell to 32 percent of all purchasers, the lowest level in three decades, far below the normal historic rate of 40 percent. Meanwhile, lower demand is driving up housing prices, further exacerbating affordability for younger buyers.
\r\nBut the goal of home ownership is hardly going away. However, the goalposts are set differently. As the Boston Business Journal reports, Generations X and Y are preferring smaller homes closer to public transportation (see above for what we just said about the declining necessity of owning a car). Whether that’s out of necessity or preference is besides the point.
\r\nThat said, Millennials now outnumber Baby Boomers overall as a buying segment. How would a builder market differently to younger buyers versus their parents? Builder points to two key features:
\r\nRelated Article: Swipe Right to Engage: How to Make Your Brand Match with Millennials
\r\nLooking ahead to Generation Z, Stacy Wood of The Institute for Emerging Issues at North Carolina University notes these emerging consumer characteristics consumer marketers must address:
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