Youth and Age in Corporate America’s Cultural Dichotomy

Discussion
Jul 21, 2011

Presented here for discussion is a summary of a current article from the About Marketing Solutions blog.

Corporate retailers, are you ready? I’m going to ask you a difficult question.

Is your age outpacing your organization’s relevancy?

The topic begs discussion when recognizing that, generationally and culturally, half of all Gen Z consumers (46 percent), and 40 percent of Gen Y and Gen X consumers are multicultural. Conversely, 66 percent of boomers and 80 percent of seniors 65+ are non-Hispanic white.

Commenting on my recent discussion on strategic relevance, Dan Stanek, EVP of Big Red Rooster, replied, "Innovation is more difficult when leaders are much older than the target market and do not understand how they operate."

Is he right?

Generational and cultural skews represent significant challenges for a lot of today’s senior executives. If they want their companies to remain relevant and in demand, they are tasked at this particular point in marketing history to not only shed traditional views and ways, but to learn to understand and address cultural diversity in younger generations.

The sharper minds in corporate America are already in sync with the country’s age and cultural trends:


  • Pamela El, VP of marketing at State Farm told Ad Age back in 2009, "I think industry-wide, as America becomes more multicultural, you will see more ethnic insights across the board. I think we’re seeing it already, but I think we’ll see it two-, three-, four-, five-fold going forward."
  • McDonald’s USA Chief Marketing Officer Neil Golden stated at the 2010 ANA Masters of Marketing Conference, "It’s very clear that African-American, Hispanic and Asian-American consumers set the trends and McDonald’s has found it more valuable to apply these segments’ preferences to the overall marketplace than to apply overall preferences to these segments."
  • Coca Cola’s CMO, Bea Perez, kicking off this year’s Nielsen Consumer 360 conference, noted, "We know that 86 percent of the growth through 2020 for Coca-Cola’s youth-target market will come from multicultural consumers, especially Hispanic, and focusing on this segment is critical to the company’s future growth."

These are the exceptions, however. The gap is wide between the multiculturally influenced Gen X, Y and Z markets and the bulk of U.S. corporate retailers who can’t "see" the relevance in educating their game to new consumer market trends.

In mid-June at the Consumer 360 Conference in Miami, Nielsen’s CEO David Calhoun exhorted attendees to spend 65 percent of their time figuring out their Hispanic opportunity.

"The story here is that within the next five years, multicultural clients will drive 86 percent of the total growth on spending at retail and, if you look at growth without these groups, you are only addressing 10 percent of the growth," added Nielsen’s SVP, Claudia Pardo at the same conference.

Discussion Questions: Do you agree that “innovation is more difficult when leaders are much older than the target market?” To what extent do generational and cultural disconnects exist within retail organizations and brands today?

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22 Comments on "Youth and Age in Corporate America’s Cultural Dichotomy"

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David Biernbaum
BrainTrust

Generational and cultural disconnects are hardly new to this generation of marketers, past generations, and won’t be for future generations to come. However, you don’t have to be someone that can directly identify with a product in order to be a successful marketer of the product. You need to do extensive and proper market research to know your target consumer and execute your plans effectively. But do not make the mistake of choosing inappropriate mis-matches for icons and spokespersons to sell your products to your targeted consumer base.

George Whalin
Guest
George Whalin
6 years 1 month ago

This is a question that seems to be asked of every generation of business leaders. Yes, some leaders have a mind set that makes it difficult to relate to or understand the customers they are trying to reach and communicate with. But this is certainly not true of all business leaders. It wasn’t true back in the 60s when young people had long hair, dressed funny and listened to rock music and it’s not true today.

Innovation and serving the needs of a diverse group of consumers is far more about how business leaders think. Innovative ideas and real leadership comes from people who understand the how the world, culture and consumers change. The best example is Steve Jobs. He and Apple continue to define how to be innovative and stay ahead of the competition while Microsoft, Sony and others continue to play catch-up.

Ben Ball
BrainTrust
An observation (OK “critique) and a comment. First the observation. Once again we are enthralled with the margin–the 10% that represents “growth” versus the much larger percentages that represent the cultural makeup of the current market. That’s not to say it is bad to look at what is growing. But if you focus on that alone you can wind up in a state I call “saluting the tallest midget” while someone else eats your (market share) lunch in the general market. The comment. The question posed is “can senior leaders relate to and effectively lead Gen Y businesses and markets?” Ironically enough, I have a troop of Gen X relatives in my house this week with three “tweens” among them. One conversation turned to “how relevant are we to them? And for that matter, how relevant are we to younger associates and clients?” As often happens in these conversations, our conclusion boiled down to an analogy. In this case, it was “are you a ‘grandpa’ or are you a ‘Gandalf’?” Followers of the Lord of the Rings trilogy will recognize Gandalf as many generations older than his fellow warrior travelers but still seen as a vibrant and vital part of… Read more »
David Morse
Guest
David Morse
6 years 1 month ago

Terry, this is a great article. America is changing demographically and culturally in ways that many sociologists are just beginning to grasp.

Is innovation more difficult when you’re not the ethnicity or the age of your target consumer? Take it from an aging white male who studies multicultural kids for a living. Yes. But it is certainly not impossible.

I think that market research is THE way to really get to know a consumer. Any consumer. Particularly ethnographic research where you get out there and spend some time with your target. An open mind goes a long way. So does empathy.

On the other hand, not doing research, and thinking you have the answers is a sure road to brand fossilization. Today’s youth–close to half of whom are multicultural, as you point out–see the world differently. They react to communications differently. They use media differently. And they shop differently. They’re not extraterrestrials. But skilled marketers are the ones who can walk in their shoes and see the world as they see it.

Max Goldberg
BrainTrust

Innovation is difficult when leaders are not open to new ideas and marketing opportunities. Successful CEOs hire a wide diversity of employees, cultivate and then listen to their input.

Fabien Tiburce
Guest
Fabien Tiburce
6 years 1 month ago

As a francophone who works half the time in French and half the time in English, I have come to realize that “culture” goes well beyond words. Culture runs deep. It is a certain outlook on the world, a set of beliefs and values shaped by history, education and where you grew up. Yes it can be rationally “explained” to a marketer but such an academic view of the world is no substitute for having people of different cultures, ethnicity and age groups on your staff. I can’t be African American but I believe that working with African Americans, I can better understand the audience and thus be a better marketer, analyst. Trying to embrace others’ culture is a commendable goal but there is a better, more effective, way to do this: hire them!

D. Black
Guest
D. Black
6 years 1 month ago

It’s not difficult. The older generation once was young and values their journey through all the fads of their time. They know to always value the youthful fads of today. They also know how to do research. The real challenge is to try and get a young executive to focus on the older generation.

Gene Hoffman
Guest
Gene Hoffman
6 years 1 month ago

Leaders don’t put new wine in old bottles. People love newfangledness. If a retailer doesn’t try to apply new remedies to produce innovation, it must expect new evils.

Innovation is more difficult when you don’t understand the music being played in the marketplace. But would innovation be any less difficult if leaders were much younger than the target market today–and tomorrow too?

When a society changes at an accelerated pace, crushing tradition and established comforts, so too must its component parts change. While retail and brands are slowly adjusting to generational and cultural disconnects there are still more hurdles ahead.

Roger Saunders
BrainTrust

Innovation is more difficult when leaders fail to think about who their target audience is, who they want it to be for growth purposes, and how they are going to develop strategies to meet their growth/retention needs for those target groups–both existing customers and new customers.

The best leaders are taking the time to embrace “walking-around” management, continuously recruiting and developing talent who represent a view that may be a “blind spot” for them, and then making certain that they seek and include those individuals, and their thinking in plans.

Leadership should not be an “age,” “gender,” “race,” or “education” issue. Retailers who build diversity, and then blend experience and fresh perspectives, continuously develop strong innovation.

Ed Rosenbaum
BrainTrust

Older executives have to be innovative and creative enough to know they need younger members of their team having those same or similar traits. My concern with younger members of the management team is they are too concerned with sheer numbers, and not concerned enough with what will drive sales. Sometimes instinct and gut is important. That does not come with youth. It comes with experience and getting “beat up” once or twice.

Mel Kleiman
BrainTrust

Innovation and great thinking is not a state of age, it is a state of mind.

It is not how old one is, it is how old one thinks and acts.

Julia Staffen
Guest
Julia Staffen
6 years 1 month ago

I agree with David; generational and cultural disconnects are not new to marketers but these differences do present a marketing challenge. The challenge can be overcome, however, if the leader can understand their changing target market and adapt the retailer’s strategy to their mindsets and behaviors. Social media plays a large role in this disconnect; a marketer who has been in retail for 30 years now has to understand that the brand no longer controls the ‘brand’: consumers control the perception of brands via their online engagement. Understanding who these people are, where they spend time and how they perceive the brand is crucial in marketing to younger generations and different cultures.

Dione Lewis
Guest
Dione Lewis
6 years 1 month ago

I do agree there is a disconnect between leaders and consumers relating to age. However, it has nothing to do with the willingness to buy; but the willingness to be heard.

Bill Emerson
Guest
Bill Emerson
6 years 1 month ago

As David points out, this is not a new challenge nor will it ever be. Change is inevitable, success is optional. As cultures evolve, some will evolve with them, some will not. It all depends on a couple of measures–how well has the retailer identified the most viable market to compete in and how well do they understand the preferences of that market. The rest is management skill, regardless of age, ethnicity, or personal tastes.

Mike Osorio
Guest
Mike Osorio
6 years 1 month ago

Innovation is difficult for most senior leaders, but not simply due to age or ethnicity. The problem is a general lack of curiosity. The tendency for most is to lean on what has worked for them in the past. One cannot approach today’s consumer trends, which are clearly multi-cultural, with yesterday’s thinking. And yet most do just that. To remain relevant and effective, senior leaders must stay curious and immerse themselves in all the rich cultural happenings available on social media and other sources, including their own employees who hopefully mirror their consumer base. If you do this, you can stay current, interested, and passionate about your consumers.

Further, the cultural diversity of today’s trendsetters varies by region and must be addressed as well as the macro trends.

Remain curious, utilize research, and listen intently to the readily available voices out there and senior leaders can remain effective no matter age or ethnicity.

Carol Spieckerman
BrainTrust

I like the insight from McDonald’s about applying segment preferences to the overall marketplace rather than the reverse. In terms of age and generational differences, I disagree that they work the same way they always have. Just as ethnic lines are blurring, so are generational identities (and combined, things get pretty complex). In fact, the spectrum of generational identity probably presents the greater challenge and opportunity in retail (the crisis in “contemporary” apparel; the rise of health and wellness and folding in of everything from cosmetics to food; easier-to-shop formats selling edgier assortments).

Caitlin Kelly
Guest
Caitlin Kelly
6 years 1 month ago

I agree with Fabien.

It’s not a simple question, as “culture” does indeed run very deep. As sophisticated marketers know, “Hispanic” is not a terribly useful term to describe men and women of all socio-economic groups, varying degrees of education and coming from, or raised by families from, a wide variety of their own cultures-of-origin. My partner is Hispanic, (his father was born in Mexico), but you would be very hard pressed, without a much deeper set of questions, to know what will appeal to him and what would turn him off, possibly for good, as a possible customer. His favorite clothing brand? Brooks Brothers.

Terry Soto
Guest
Terry Soto
6 years 1 month ago

I find it telling that corporate marketers/retailers are not represented in this discussion. It’d be so valuable to hear how they’re addressing this cultural and generational dichotomy. There is a dire need here given that 43% of us agree there is resistance to keep pace and align with the changing consumer marketplace.

And David is right, this is no different than previous generational and cultural disconnects, but that is exactly the point. The danger is that some of us are taking the same “us versus them” stance rather than being responsive to the change. I understand Walmart is testing a youth format targeting the college set. I can bet there’s a lot of discussion in those halls around what constitutes this younger and culturally different generation.

Mark Burr
Guest
6 years 1 month ago
I quite honestly don’t believe all of any disconnect can be attributed to age for leaders that are ‘older’. What is older? How much is ‘much older’? With no exception to age, a disconnect occurs when retailer fail to engage in a conversation with their customers. For that matter, when they fail to engage in a conversation with customers of other markets outside of their own that are engaging to the ‘culture’ of the marketplace. Believing you know what consumers want rather than engaging the consumer not only about current needs but also future observations would not seem unlikely to the potential egotistical minds of executives and CEOs. Mistakes can be made easily in the mediocre company when culture becomes a narrow view of one or a small gang of a few. Interesting discussion in a small portion of BMW: A Driving Obsession, recently presented by CNBC about understanding the broad cultural marketplace of consumer goods other than your own and the integration into your own products and services. I’d recommend it. Even so, its all about the conversation, the listening, the integration and into action. While it was a very small segment of the discussion, if you have an… Read more »
Cathy Hotka
BrainTrust

As recently as ten years ago a number of retailers were talking about their success at keeping consumers in the store as long as possible, when it was obvious that at least half of women held full time jobs and were starved for time. Rule One in retail should be “Know Thy Customer.”

gordon arnold
Guest

Retailers have never really connected with the markets they serve. This is evident when the observer understands the nature of the beast. The retail market was and is run by operations management types. Sales and marketing is considered to be an order taking task that should be very matter of fact. The cause for this predicament is that purchasing is entrusted with the leverage to steer a retailer in any direction bases on open to buy $’s vs. available shelf space vs. full scale acceptance. What a mess??!!

PK Dollar
Guest
PK Dollar
6 years 20 days ago

Now that I’m over 50, what I see is that companies are abandoning those of us over 35 who have extra dollars to spend in favor of those between 18-30 who have less disposable income. Case in point was recently at ComicCon. It is a huge event in the world of print/visual entertainment and tickets are next to impossible to get unless, until this year, you were already in attendance. In the spirit of “diversity” (their word, not mine) they decided to sell a limited number of tickets for 2012 at a location 1/2 mile from the venue. Limited hours as well: 8 am-11am. So in-demand were these tickets, people were camping out 25+ hours in line to get them. My client, a small retailer with 4 stores, who spends a minimum of $25-30K at each SDCC, was not one of them. It is my best guess that those who were camped out won’t spend even 10% yet SDCC went out of their way to disenfranchise those who actually had the $ to spend in favor of the more “youthful” attendee.

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