Young Americans' Values and Spending Shifting Toward Self-Reliance, Frugality
The Millenial generation in America is close in values and spending habits to the group Tom Brokaw calls the Greatest Generation (those who were young adults during World War II), according to John Gerzema, chief insights officer at Young & Rubicam Group and author of the book Spend Shift. Gerzema gave the keynote address at the BAI Retail Delivery conference in Las Vegas yesterday afternoon.
Gerzema has been studying consumer analytics and talking to consumers all over the country, including the leaders of 50 startup companies. He offered several observations about Americans' changing spending habits and values, many of which could be incorporated in banks' product and marketing strategies.
One is that young Americans are moving toward core American values, such as thrift and self-reliance. The use of "Sully" (as in Sully Sullenberger, the US Airways pilot who safely landed a downed plane in the Hudson River in January 2009) as a baby name has risen 35% over the last two years. 80.3% of spend-shifters agree with this statement: "Since the recession I am interested in learning new skills, so I can do more myself and rely less on others." (Among the general population, 64.7% agreed.)
Americans are moving from mindless to mindful consumption and have new priorities for the companies and brands they use, Gerzema said. In 2005, consumers liked brands that were mysterious (40%), confident (31%), sensuous (12%), trendy (11%) and glamorous (10%). In 2010, brand/company attributes that matter more to consumers include kindness (which has risen 391%), high quality (up by 124%), friendliness (+79%), social responsibility (+63%) and leadership (+40%). They take a moral approach: 69% of spend shifters believe they can change behavior by supporting companies that do the right thing. Spend-shifters are willing to pay a premium for products and services from companies that contribute to the local community (70%, versus 64.7% of the total population). Only 55.6% of spend-shifters prefer to buy brand names. During the recent financial crisis, trust declined across all retail industries, but trust in the finance industry dropped more than any other retail industry, by 58% between 2005 and 2010.
Most Americans (77.9%) disagree with the statement, "Money is the best measure of success." Almost two-thirds of Americans (63%) disagree with the statement, "I find the more I have the more I want."
Gerzema said the young, spend-shifter community is more hopeful and optimistic than previous generations; 60% of spend shifters agree with this statement: "Since the recession I'm actually more capable of starting my own business," and 53% think there's more opportunity for small businesses to compete with large companies than there used to be.
Americans have gotten more frugal. The average age of a car in the U.S. 9.4 years, the highest ever. 50% of all Millenials have no land-line phone. 77.4% say they realize they are happier with a simpler, more down-to-earth lifestyle. An MIT student has developed venus flytrap wallet that looks at how much you're spending and at a certain point, automatically snaps shut. People are turning to libraries to look for jobs and network; 68% of Americans have a library card, the highest percentage ever. "The Internet was supposed to crush libraries," Gerzema observed.
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