Beyond Boomers: Marketing to Younger Consumers
Demographers say that baby boomers will continue to drive overall economic trends. But for companies promoting lifestyles of health and sustainability there's another, even larger target market: the younger consumer. By Pete Lewis
Demographers say that even as they age, boomers -- at 78 million strong -- will continue to drive overall economic trends. But for companies promoting lifestyles of health and sustainability there's another, even larger target market: the younger consumer. By Pete Lewis
In 10 years, more than 22% of the U.S. population will be between the ages of 55 and 74, according to Census Bureau figures. And while recent events on Wall Street may have diminished their retirement savings, boomers remain the wealthiest of all the age groups. Certainly, boomers created and still drive the LOHAS (lifestyles of health and sustainability) marketplace, but it's time to think about who will step in to drive the next wave of the LOHAS movement and who will be spending money on healthy, sustainable and socially responsible goods and services in the future.
100 Million Strong
Whereas the boomers, as a group, were born between 1946 and 1964, there are more than 100 million Americans between the ages of 10 and 38, according to the 2000 U.S. census. Forty million are teenagers, many with an unprecedented amount of disposable income; and another 60 million are between 20 and 34, and many of the latter earn good salaries, have families and own homes.
The good news is that more than 24% of hard-core LOHAS consumers, and 33% of the less dedicated (and more common) cross-over or “Nomadic” consumers, are younger than 36 years old, according to “Understanding the LOHAS Market,” a report released earlier this year by the Natural Marketing Institute and Natural Business Communications, publisher of LOHAS Journal.
LOHAS companies are so married to boomer values and demographics that they may assume, at their peril, that there will be no substantial generational differences and that younger consumers will mostly embrace inherited boomer lifestyles and values and boomer alternative vs. mainstream idealism.
But hear the voice of the future: Perhaps not only Whole Foods Market should be worried about its nickname among many young Americans: “Whole Paycheck.” As in, “A trip to Whole Foods will eat up my whole paycheck.” Will young consumers, who perceive Whole Foods as catering to more-affluent boomers, really flock to the store once their disposable income increases, the way many in the LOHAS space seem to assume?
It's common to assign boomer values to the younger generation. “A 50-year-old woman who uses organics may have more in common with a 20-year-old woman who uses organics than she does with another 50-year-old woman who doesn't use organics,” says Laurie Demerit, president of The Hartman Group, a market research and consulting firm in Bellevue, Wash., that specializes in the health and wellness industry.
But what if the 50 year old buys organics for their health benefits, whereas the 20 year old is more concerned about the impact of pesticides on the environment, or is a “foodie” and cares only about serving the freshest and best produce to her dinner guests? When you define your market by consumer behavior, it's customary to ignore age. Proactive marketers position their products and tailor their messages to the motivations and decision-making process behind those behaviors.
The Hartman Group tends to focus on lifestyle rather than age, and views consumer behavior as evolving along a “wellness continuum.” Consumers enter the market by sampling a few wellness products, then establish wellness routines, which over time become habitual and lock in buying behaviors.
But how does this research focus apply to younger consumers who may have grown up in a vegetarian household or taken yoga as an elective in high school? “If you were a vegetarian in the '70s, you were considered a crackpot,” says Skz Skrzynski, president of The Revolution Agency, a Phoenix-based advertising agency. “Now it's just a choice. Mainstream markets are looking at LOHAS as less of an oddity. Kids grow up with this stuff. It's not seen as weird.”
These same “kids” have grown up without the '50s concern about nuclear holocaust or any intense involvement in the issues of the '60s. CDs, computers, the Internet and cell phones are intrinsic to the world as they know it. If boomer consumers were largely shaped by their times, can it be different for postboomer consumers?
Price Plays a Bigger Role
There is a pervasive lack of consensus about what motivates younger consumers or how to market to them -- especially younger LOHAS Consumers. But there is no lack of opinion.
Price seems to play a much greater role in the buying decisions of young consumers. Obviously, young people often have less money to spend than older cohorts, but unlike their older peers, younger adults take for granted that they can find organic produce in Safeway or supplements in Walgreen's, and they may not even think of searching elsewhere or of broadening the range of what they know and buy.
“The more that a product or category is seen as a commodity or a staple, the more that price and value become important,” says Jeff Tripician, president of TM Branding, a Boulder, Colorado-based marketing firm.
Younger consumers may not only have less to spend, but also are less willing to sacrifice quality for the values associated with LOHAS, he says. Skrzynski agrees that younger consumers are more likely to compare price, but they're also more likely to compare quality. “There's a general feeling that 'natural' requires compromise,” says Skrzynski.
Baby boomers, the first generation to grow up with credit cards, are notoriously obsessed with health and immortality. They will presumably pay almost any price for a product if they believe it will promote health. They associate LOHAS products with sacrifice and expect “green” products to cost more. “Younger people aren't as willing to make that compromise. That's why it's extremely important to establish legitimacy with the consumer,” Skrzynski says.
Environmental advocate and author Danny Seo says young people tend to have a less purist attitude toward their purchases. They may buy organic produce because it's healthier and better for the environment, but they also buy Doritos because they taste good, and they wash their clothes with Clorox bleach because it makes them look good.
“At the end of the day, an eco-friendly product that doesn't work won't make anyone happy … regardless of age,” Seo says. “Quality is always going to be an important factor to people, LOHAS or not.”
To their credit, young consumers are more active and more passionate than their boomer elders, according to some marketers interviewed for this story. Like Paul Ray's Cultural Creatives, they are also skeptical of hype and suspicious of “the corporate machine.” They want information. They read the labels on packages. But this generation was raised with computers and knows how to access information -- and they will do their research.
“Younger consumers value honesty,” says Ged Buffee, executive vice president at Green Team Advertising, in San Francisco. “There's a tendency to want zero bullshit. You need to strip off the fluff and make a clear, credible message. They know marketing and they know the marketing spin.”
However, Rick Sterling, president of Sterling Rice Group, a Boulder, Colo.-based ad agency, could not disagree more with Buffee's assessment. While there has been an upsurge of social and civic mindedness among teenagers and people in their early 20s, Sterling says, younger people for the most part are less concerned about environmental issues, and less politically involved or socially concerned than older Americans. Sterling concedes that a substantial number of young people are vegetarians and seem to rally around the animal-rights movement. “Capture their attention. Get them excited. Don't tell them the story -- give them a link,” he says.
The research seems to back up Sterling's view: Americans' willingness to pay more for sustainable products increases with age, according to the 2002 LOHAS Consumer Trends database (see chart, this page). But the data debunks another pervasive stereotype: older consumers are more concerned with their personal health, whereas younger consumers are more concerned with the planet's health. The research indicates that concern about environmental issues increases with age, with a pronounced spike between the late 30s and the mid-50s, the current age of boomers. The same holds true for other LOHAS issues such as children's issues, women's issues, cruelty to animals and spirituality.
This is not to say that younger consumers are apathetic about issues traditionally linked to LOHAS. The 2002 LOHAS Consumer Trends database shows that the majority of consumers 25 years and younger feel strongly about environmental issues, women's and children's issues, and about preventing animal cruelty (see chart, below). And young consumers seem to respond to cause-related marketing messages.
Linda Doby is president and founder of Forest, Va.-based Well-in-Hand, which produces ZeroZitz!, a line of all-natural, vegan-certified, cruelty-free herbal acne medications, by its very nature a product aimed at a younger LOHAS Consumer. ZeroZitz! products are clearly labeled as all-natural and herbal, but nowhere does Well-in-Hand explain why herbal is better.
Doby says young people take for granted that natural is good and that herbs are healthy. “It matters to kids that we're animal-friendly and certified vegan,” Doby says, “but they won't buy our products if they don't work.”
Well-in-Hand recently reintroduced ZeroZits! in a rainbow of brightly colored packages. “We didn't change our layout, we changed our colors,” Doby says. “We went from earthy to brilliant colors. The more brilliant the better. I wanted neon, but we couldn't make it happen.”
SweatX and Wildlife Works are clothing companies that use cause-related marketing to target groups similar to those that Doby targets, especially young women. SweatX, based in Los Angeles, sells sweatshop-free-logo clothing that targets college students as well as labor unions. Wildlife Works is a for-profit company created to finance a wildlife conservation park in Africa.
SweatX markets on college campuses and at rock concerts and festivals where it can distribute literature and educate consumers about fair-trade clothing and labor issues. Its website also contains information about why people should care about sweat shops and what they can do about them. SweatX strives for complete transparency, providing information about its workers' wages and about how much of a product's wholesale price goes to materials, labor and profit.
Wildlife Works targets women ages 25 to 35 and sells almost exclusively through high-end, high-fashion boutiques. Its T-shirts sell for $28 to $32, too expensive for the traditional “green” marketplace, says founder and CEO Mike Korchinsky. The company provides literature to stores that sell its products and information via its website.
“There is a strong affinity among young women with wildlife,” Korchinsky says. “Our message is directed to people who care about this one issue.”
Diverse Motivations
There is no simple formula for reaching younger LOHAS Consumers, but at least one principle is unavoidable. LOHAS emerged as a counterculture phenomenon, so its original customers were relatively homogeneous. Younger consumers and their motivations are more diverse. Any sales or marketing message must respect that diversity.
So will younger LOHAS consumers eventually come to their senses and start acting like boomers?
Here's a cautionary tale: In the '60s, America's auto industry conceded first-time car buyers to the Japanese and European car makers. Back then, Detroit didn't pay any mind to the young people buying Toyotas and Hondas. It was assumed that once they grew up, got real jobs and started earning real money, they would want to drive real cars, such as a Cadillac, a Buick or an Oldsmobile. Guess what? It didn't happen.
“It's pretty much accepted that as baby boomers grow old and retire, [their children] won't be like their parents,” says Claire Raines, a consultant on generational issues and co-author of four books on the subject, including Generations at Work: Managing the Clash of Veterans, Boomers, Xers and Nexters in Your Workplace. “It's silly to assume that Gen Xers will start behaving like baby boomers when they get older. It's not about life stages.”
Raines says she sees a definite antiboomer backlash among young people. For example, Jolt, the highly caffeinated, high-sugar soft drink, successfully targeted younger consumers by positioning itself as “everything not boomer,” Raines says.
Consumers develop brand loyalties when they're young and often remain loyal to those brands for life. They also maintain their negative opinions about companies and products and their opinions about “whole paycheck” businesses.
The message for marketers: complacency and inattention can undo your success. LOHAS companies that pursue tried-and-true marketing strategies directed at baby boomers may strike out with younger consumers. Put another way, it's not profitable to ignore the values, lifestyles, passions and experiences of 100 million younger consumers.
------
This article was first published in the Fall 2002 issue of LOHAS Journal.
In 10 years, more than 22% of the U.S. population will be between the ages of 55 and 74, according to Census Bureau figures. And while recent events on Wall Street may have diminished their retirement savings, boomers remain the wealthiest of all the age groups. Certainly, boomers created and still drive the LOHAS (lifestyles of health and sustainability) marketplace, but it's time to think about who will step in to drive the next wave of the LOHAS movement and who will be spending money on healthy, sustainable and socially responsible goods and services in the future.
100 Million Strong
Whereas the boomers, as a group, were born between 1946 and 1964, there are more than 100 million Americans between the ages of 10 and 38, according to the 2000 U.S. census. Forty million are teenagers, many with an unprecedented amount of disposable income; and another 60 million are between 20 and 34, and many of the latter earn good salaries, have families and own homes.
The good news is that more than 24% of hard-core LOHAS consumers, and 33% of the less dedicated (and more common) cross-over or “Nomadic” consumers, are younger than 36 years old, according to “Understanding the LOHAS Market,” a report released earlier this year by the Natural Marketing Institute and Natural Business Communications, publisher of LOHAS Journal.
LOHAS companies are so married to boomer values and demographics that they may assume, at their peril, that there will be no substantial generational differences and that younger consumers will mostly embrace inherited boomer lifestyles and values and boomer alternative vs. mainstream idealism.
But hear the voice of the future: Perhaps not only Whole Foods Market should be worried about its nickname among many young Americans: “Whole Paycheck.” As in, “A trip to Whole Foods will eat up my whole paycheck.” Will young consumers, who perceive Whole Foods as catering to more-affluent boomers, really flock to the store once their disposable income increases, the way many in the LOHAS space seem to assume?
It's common to assign boomer values to the younger generation. “A 50-year-old woman who uses organics may have more in common with a 20-year-old woman who uses organics than she does with another 50-year-old woman who doesn't use organics,” says Laurie Demerit, president of The Hartman Group, a market research and consulting firm in Bellevue, Wash., that specializes in the health and wellness industry.
But what if the 50 year old buys organics for their health benefits, whereas the 20 year old is more concerned about the impact of pesticides on the environment, or is a “foodie” and cares only about serving the freshest and best produce to her dinner guests? When you define your market by consumer behavior, it's customary to ignore age. Proactive marketers position their products and tailor their messages to the motivations and decision-making process behind those behaviors.
The Hartman Group tends to focus on lifestyle rather than age, and views consumer behavior as evolving along a “wellness continuum.” Consumers enter the market by sampling a few wellness products, then establish wellness routines, which over time become habitual and lock in buying behaviors.
But how does this research focus apply to younger consumers who may have grown up in a vegetarian household or taken yoga as an elective in high school? “If you were a vegetarian in the '70s, you were considered a crackpot,” says Skz Skrzynski, president of The Revolution Agency, a Phoenix-based advertising agency. “Now it's just a choice. Mainstream markets are looking at LOHAS as less of an oddity. Kids grow up with this stuff. It's not seen as weird.”
These same “kids” have grown up without the '50s concern about nuclear holocaust or any intense involvement in the issues of the '60s. CDs, computers, the Internet and cell phones are intrinsic to the world as they know it. If boomer consumers were largely shaped by their times, can it be different for postboomer consumers?
Price Plays a Bigger Role
There is a pervasive lack of consensus about what motivates younger consumers or how to market to them -- especially younger LOHAS Consumers. But there is no lack of opinion.
Price seems to play a much greater role in the buying decisions of young consumers. Obviously, young people often have less money to spend than older cohorts, but unlike their older peers, younger adults take for granted that they can find organic produce in Safeway or supplements in Walgreen's, and they may not even think of searching elsewhere or of broadening the range of what they know and buy.
“The more that a product or category is seen as a commodity or a staple, the more that price and value become important,” says Jeff Tripician, president of TM Branding, a Boulder, Colorado-based marketing firm.
Younger consumers may not only have less to spend, but also are less willing to sacrifice quality for the values associated with LOHAS, he says. Skrzynski agrees that younger consumers are more likely to compare price, but they're also more likely to compare quality. “There's a general feeling that 'natural' requires compromise,” says Skrzynski.
Baby boomers, the first generation to grow up with credit cards, are notoriously obsessed with health and immortality. They will presumably pay almost any price for a product if they believe it will promote health. They associate LOHAS products with sacrifice and expect “green” products to cost more. “Younger people aren't as willing to make that compromise. That's why it's extremely important to establish legitimacy with the consumer,” Skrzynski says.
Environmental advocate and author Danny Seo says young people tend to have a less purist attitude toward their purchases. They may buy organic produce because it's healthier and better for the environment, but they also buy Doritos because they taste good, and they wash their clothes with Clorox bleach because it makes them look good.
“At the end of the day, an eco-friendly product that doesn't work won't make anyone happy … regardless of age,” Seo says. “Quality is always going to be an important factor to people, LOHAS or not.”
To their credit, young consumers are more active and more passionate than their boomer elders, according to some marketers interviewed for this story. Like Paul Ray's Cultural Creatives, they are also skeptical of hype and suspicious of “the corporate machine.” They want information. They read the labels on packages. But this generation was raised with computers and knows how to access information -- and they will do their research.
“Younger consumers value honesty,” says Ged Buffee, executive vice president at Green Team Advertising, in San Francisco. “There's a tendency to want zero bullshit. You need to strip off the fluff and make a clear, credible message. They know marketing and they know the marketing spin.”
However, Rick Sterling, president of Sterling Rice Group, a Boulder, Colo.-based ad agency, could not disagree more with Buffee's assessment. While there has been an upsurge of social and civic mindedness among teenagers and people in their early 20s, Sterling says, younger people for the most part are less concerned about environmental issues, and less politically involved or socially concerned than older Americans. Sterling concedes that a substantial number of young people are vegetarians and seem to rally around the animal-rights movement. “Capture their attention. Get them excited. Don't tell them the story -- give them a link,” he says.
The research seems to back up Sterling's view: Americans' willingness to pay more for sustainable products increases with age, according to the 2002 LOHAS Consumer Trends database (see chart, this page). But the data debunks another pervasive stereotype: older consumers are more concerned with their personal health, whereas younger consumers are more concerned with the planet's health. The research indicates that concern about environmental issues increases with age, with a pronounced spike between the late 30s and the mid-50s, the current age of boomers. The same holds true for other LOHAS issues such as children's issues, women's issues, cruelty to animals and spirituality.
This is not to say that younger consumers are apathetic about issues traditionally linked to LOHAS. The 2002 LOHAS Consumer Trends database shows that the majority of consumers 25 years and younger feel strongly about environmental issues, women's and children's issues, and about preventing animal cruelty (see chart, below). And young consumers seem to respond to cause-related marketing messages.
Linda Doby is president and founder of Forest, Va.-based Well-in-Hand, which produces ZeroZitz!, a line of all-natural, vegan-certified, cruelty-free herbal acne medications, by its very nature a product aimed at a younger LOHAS Consumer. ZeroZitz! products are clearly labeled as all-natural and herbal, but nowhere does Well-in-Hand explain why herbal is better.
Doby says young people take for granted that natural is good and that herbs are healthy. “It matters to kids that we're animal-friendly and certified vegan,” Doby says, “but they won't buy our products if they don't work.”
Well-in-Hand recently reintroduced ZeroZits! in a rainbow of brightly colored packages. “We didn't change our layout, we changed our colors,” Doby says. “We went from earthy to brilliant colors. The more brilliant the better. I wanted neon, but we couldn't make it happen.”
SweatX and Wildlife Works are clothing companies that use cause-related marketing to target groups similar to those that Doby targets, especially young women. SweatX, based in Los Angeles, sells sweatshop-free-logo clothing that targets college students as well as labor unions. Wildlife Works is a for-profit company created to finance a wildlife conservation park in Africa.
SweatX markets on college campuses and at rock concerts and festivals where it can distribute literature and educate consumers about fair-trade clothing and labor issues. Its website also contains information about why people should care about sweat shops and what they can do about them. SweatX strives for complete transparency, providing information about its workers' wages and about how much of a product's wholesale price goes to materials, labor and profit.
Wildlife Works targets women ages 25 to 35 and sells almost exclusively through high-end, high-fashion boutiques. Its T-shirts sell for $28 to $32, too expensive for the traditional “green” marketplace, says founder and CEO Mike Korchinsky. The company provides literature to stores that sell its products and information via its website.
“There is a strong affinity among young women with wildlife,” Korchinsky says. “Our message is directed to people who care about this one issue.”
Diverse Motivations
There is no simple formula for reaching younger LOHAS Consumers, but at least one principle is unavoidable. LOHAS emerged as a counterculture phenomenon, so its original customers were relatively homogeneous. Younger consumers and their motivations are more diverse. Any sales or marketing message must respect that diversity.
So will younger LOHAS consumers eventually come to their senses and start acting like boomers?
Here's a cautionary tale: In the '60s, America's auto industry conceded first-time car buyers to the Japanese and European car makers. Back then, Detroit didn't pay any mind to the young people buying Toyotas and Hondas. It was assumed that once they grew up, got real jobs and started earning real money, they would want to drive real cars, such as a Cadillac, a Buick or an Oldsmobile. Guess what? It didn't happen.
“It's pretty much accepted that as baby boomers grow old and retire, [their children] won't be like their parents,” says Claire Raines, a consultant on generational issues and co-author of four books on the subject, including Generations at Work: Managing the Clash of Veterans, Boomers, Xers and Nexters in Your Workplace. “It's silly to assume that Gen Xers will start behaving like baby boomers when they get older. It's not about life stages.”
Raines says she sees a definite antiboomer backlash among young people. For example, Jolt, the highly caffeinated, high-sugar soft drink, successfully targeted younger consumers by positioning itself as “everything not boomer,” Raines says.
Consumers develop brand loyalties when they're young and often remain loyal to those brands for life. They also maintain their negative opinions about companies and products and their opinions about “whole paycheck” businesses.
The message for marketers: complacency and inattention can undo your success. LOHAS companies that pursue tried-and-true marketing strategies directed at baby boomers may strike out with younger consumers. Put another way, it's not profitable to ignore the values, lifestyles, passions and experiences of 100 million younger consumers.
------
This article was first published in the Fall 2002 issue of LOHAS Journal.