Caught out by the GFC in a big way, members of Generation Y are re-evaluating their options, according to a recent study.
‘SPENDTHRIFT, live-for-today, self indulgent know it alls’ are descriptions of Gen Ys that sit comfortably with most of our commonly held views of this generation.
But according to a recent study by advertising agency 303, this couldn’t be further from the truth. It appears that the global financial crisis and the turmoil in the economy have had a traumatic effect on this perceived hedonistic group of party revellers.
In a qualitative study of Gen Yers, 303 discovered that the impact of the world economic crisis has indeed had a profound effect on their attitudes and behaviour. Never having lived through a recession or even a financial downturn, this group was stunned when they were faced with redundancies and salary cuts, abandoned by their employers.
Rather than thinking about planning for their future, Gen Ys previously spent it with no thought of tomorrow. Now, however, they’re much more focused on saving, ensuring they keep their job and finding some security in their relatively short adult lives.
Gen Ys were the first to be laid off when the recession hit. They were last in, first out. They were seen by their employers as being expendable because of their lack of experience.
Gen Xs and Baby Boomers had lived through recessions, downturns and market corrections before, but for Gen Ys, this situation came as quite a shock. As a result, they were ill prepared, had no savings and as they had never experienced anything other than boom times, really unsure of how to cope.
According to the study entitled, ‘Bruised and Battered’, Gen Yers went blithely through their work lives with no savings, with little thought given to super and maxed-out credit cards.
When the hard times hit, many lost their houses or couldn’t afford the rent on their apartments and experienced financial hardship to the extent that some recounted having to sleep on mates’ couches until they got back on their feet, financially speaking.
An even more hurtful aspect of the downturn, according to those surveyed, was the attitude of other older generations, who essentially believed it was about time a hard dose of reality hit this group and brought them back to earth.
Gen Ys received little or no sympathy from others in society, and this wounded them even further. They felt abandoned by banks, mobile phone companies, employers, older co-workers – in fact, this sense of betrayal stunned them.
The research shows that Gen Ys talk about being left ‘high and dry’ by banks in particular. Banks were happy to extend loans to them during the boom times, but appeared to show little sympathy or understanding when the money started to dry up.
Recognising the changes in attitude that have taken place in this generation is immensely important in how businesses should choose to engage and talk to them.
They have now completely re-evaluated how they think and act. One important aspect – saving is the new spending.
The study reveals that a new sense of conservatism has enveloped this generation like a cloak; they are now a group which has become a great deal more concerned with job security, saving for the future, wary of debt and considered in their purchases.
Surprisingly, despite this financial shock and sense of betrayal, there’s a savvy optimism that characterises this group now.
They are determined not to be caught out again, but are convinced that potentially good times lie ahead. They are however re-evaluating all their existing relationships – banks, credit card companies, mobile phone companies, favourite brands – they’re all coming under the microscope so Gen Y can see who they trust and who they should move away from.
Gen Ys are now looking to brands and businesses they believe are authentic and true to what they preach. One respondent is quoted as saying: “It takes three seconds to determine if a brand is cool”. They are looking to brands that walk the talk, and really demonstrate an understanding of their generation. The Gen Y interpretation of authenticity includes a large helping of digital or online presence, social media communication and corporate transparency.
There are a number of brands that fit the bill. Brands they appear to respect include Apple, Virgin and quite surprisingly, financial brand Bankwest.
Interestingly, the study unveils a real opportunity for financial brands. Apart from the strictly online offerings such as U Bank and ING Direct, few financial brands seem to be focusing on this generation. Or at least the group feels they’re not being spoken to in their language.
This group will soon be the largest participating group in the work force with more than 4.5 million of them earning a living. Gen Y will soon overtake the Baby Boomers as they largest percentage of the workforce.
They do have the money, or will have soon once again; they do have intelligence and savvy and they represent a significant opportunity for a specialist financial offering.
They like consistent messaging through communications and they like humour. As a result they like the quirky, humorous nature of Bankwest and appreciate the simple, clear and direct product message contained in the creative work.
Gen Ys appear to be looking to financial brands to offer them advice on how to begin to build for their future wealth. Interestingly they’re progressive in the way they view investments and see a real benefit in having a diverse range of investments from property to shares.
They are a little wary of superannuation, largely because they’re not sure they understand it and retirement seems such a long way off, plus they can’t keep up with the frequent changes made to its structure and the prevalent news that it’s likely not to be sufficient for people heading to retirement now. This relegates it, in Gen Yers’ minds, to a base level and mandated saving rather than being the main vehicle for their retirement.
Gen Ys are looking to financial brands that offer them advice – clear, comprehensible advice. They’re happy for this to be initially on line, indeed they expect it to be online.
This is a group that expects to be able to research things online and only once they’re clear on their options will they seek to take the relationship to the next step - talk to a sales person.
But not all online communication is good communication, according to those surveyed. Tokenistic, try-hard Facebook pages that say nothing and offer no ‘relationship’ don’t cut it with this audience.
Some financial brands have done some embarrassing things online and they’re ridiculed by Gen Y. If you’re going to go into social media, remember how Gen Ys use this space. It is primarily social, not business, they expect to be entertained, have fun; not to see a tokenistic attempt to interrupt them. And remember, online brands should expect a conversation because Gen Y have things to say.
Nick Cleaver is CEO of 303, Australia's largest independent advertising agency with offices in Perth and Sydney