May 23, 2014
Generational distances regarding social media use are not as wide as commonly thought, according to a report from the Luxury Institute.
Eighty-five percent of millennials surveyed for the report said they were inclined to use social media, compared to 73 percent of Generation X'ers and 60 percent of Baby Boomers. As luddites become further marginalized, brands must adopt a marketing approach that prioritizes individuals over segments and personas.
"The surprising part for me is that Boomers, Gen X'ers and millennials are all consuming all of these media at some level,” said Milton Pedraza, CEO of The Luxury Institute, New York. “It’s not as if they’re getting left behind. These are all affluent people, and tech savvy.
"Life stage matters tremendously but because of the new age of data, analytics and one to one marketing, we can look beyond the segments to the individuals and market to them," he said.
The Luxury Institute surveyed 1,200 consumers 21 and older with an annual household income of at least $150,000.
The report aims to get marketers to reconsider media consumption in general. The dynamic of how consumers "consume" is messier than the laser-drawn segments of millennials, Gen X'ers and Baby Boomers suggests.
Age provides broad indications of consumer behavior, but individual behavior is more granular, rife with the unexpected.
Baby Boomers do watch more television, with respondents averaging seven hours per week, but millennials are also flipping through channels, with these respondents averaging four hours per week. About 70 percent of all segments surveyed watch previously recorded programs on DVR.
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Similarly, while two-thirds of affluent millennial respondents listen to online radio sites such as Pandora and Spotify, 41 percent of baby boomers do as well.
Online video is watched by 82 percent of millennial respondents, 65 percent of Gen X'ers and 53 percent of Baby Boomers.
Video still from LVMH-owned Nowness' "Mine All Mine"
Baby Boomers spend 2.87 hours per week reading newspapers and magazines, compared to 1.12 hours by Millennials and 1.58 by Gen X'ers.
Although there is a clear hierarchy of preference and habit for each segment, consumers regularly travel between media depending on the circumstance.
Rather than use a blanket-approach to address the habits of different age groups, brands must enact a granular system.
As Ed Brill from IBM recently wrote, "Transactions, multichannel interactions, social media and syndicated data from loyalty cards and other customer-related information have increased the ability for retailers to create a consolidated, constantly updated view of customer behavior and preferences."
The abundance of touch points gives marketers insights on a person-to-person basis, allowing them to devise customizable interactions for each consumer.
"Marketers need to go beyond stereotypes and propensities, and start doing real one-to-one marketing now," Mr. Pedraza said in a press release. "The data and analytical firepower are there to build relationships, and wealthy consumers, especially millennials, demand it."
Granularity has become a buzzword recently, with commentators encouraging brands to discard generic personas and replicable stores.
Boston Consulting Group's “Shock of the New Chic: Dealing with New Complexity in the Business of Luxury” report asserts that consumer interests are fragmented along far too many lines for a brand to have identical stores in different locations. Also, the nomadic nature of luxury consumers forces brands to reassess the nature what each store should achieve (see story).
Forrester recently argued in its "Digital Customer Experience" report that 2014 will be a year of major innovation. Most prominently, brands everywhere will develop user-centric designs and experiences or face the consequences of a consumer exodus (see story).
"We have to look at individual needs, lifestyles and life stages and combine something that’s optimal for each person," Mr. Pedraza said.
Joe McCarthy, editorial assistant on Luxury Daily, New York