PL Buyer: The ABCs of Reaching Gen X and Gen Y with Private Label
Through a special arrangement, what follows is a summary of
a current article from Private Label Buyer, presented here for discussion.
Y, or “Millenials” as they also are called, today represent
the largest U.S. population segment — more than 76 million strong. Add
the 51 million members of Generation X into the mix and you have a large and
powerful new customer segment to home in on for private label sales.
“They are looking to try products that are new and different and branding
isn’t as critical to them as it was to their parents,” said Richard
George, professor of food marketing at Saint Joseph’s University, Philadelphia,
Pa. “I think this should have the private label folks saying hallelujah.”
Gen X, time is a precious commodity, so retailers should reduce deadline pressure
by offering meal planning and deals, and little indulgences like lattes to
make shopping less onerous, according to a study, Mining the U.S. Generation
Gaps, from The Nielsen Co. Childcare activity centers or computer kiosks
keep kids engaged while parents shop. In-store cooking or craft classes offer
family fun and a reason to increase trip count.
To reach Gen Y, consider upgrading
piped-in music to current hits, the same study says. Coffee stations with
battery chargers and in-store Wi-Fi let them kick back and review internet
or mobile coupons and shopping lists. Convert their need for immediate gratification
into impulse buy sales with enticing end caps and front-of-store bins.
loyalty overall tends to be lower for these younger generations. In a recent
survey of 865 Gen X and Gen Y consumers by AMP Agency, just three percent of
respondents said they’re loyal to a particular brand. The
survey included baby products, consumer electronics, food and beverage, health
and beauty and fashion categories.
Trading-down behaviors related to the choice
of retailer, product or brand will lose some traction in the recovery, but
private label brands (especially in fast moving consumer goods categories)
will remain a significant factor due to their high-quality at lower prices.
“While Gen X-ers are smaller in number, they are a huge opportunity in
today’s economy,” said Tom Bernthal, CEO of Kelton Research. “Gen
X-ers remember the consumption culture of yesterday and long for it back. They
are the ones that have latent desires to spend. Gen Y-ers, for the most part,
are just now coming into the financial situation where they have disposable
income. They don’t have strong memories of how people spent in the pre-recession
Discussion Questions: Do Gen X and Gen Y represent a unique opportunity for retailers to grow market share of private labels? How should the PL marketing approach change to reach these younger generations versus Baby Boomers?