A generational shift occurs when a demographic with a different set of values and ethics begins to replace another. Right now, it’s millennials that are taking over from baby boomers as the most influential demographic in society. Not only are millennials running more businesses, they are influencing purchasing choices based on their attitudes, expectations and values.
This change in buying choices is impacting sales at many different types of businesses. To benefit from this demographic shift, companies need to rethink and adapt their offerings in order to appeal to a new generation of high spending consumers.
It’s not all about millennials
At the same time, this generational shift isn’t all about appealing to millennials. As baby boomers exit the workforce and begin to sell their assets in preparation for retirement, many businesses will have an eye on how they can help this generation achieve their new goals too.
In order to benefit from generational shifts, companies need to remain relevant. That means identifying when shifts occur and learning to understand new markets and customers. For instance, while millennials are in the ascendancy, generation Z is also beginning to enter the workforce and grow their spending potential. So, as well as learning to appeal to millennials, businesses should be scrutinising generation Z to examine what they can offer to attract this new customer base.
To do this, businesses need to understand the differences between the various generational demographics.
Five generational demographics – all with different values and needs
Obviously, how you react to generational shifts will depend, to a large extent, on your business model. If you’re in the business of tech, then there probably isn’t much you can do for traditionalists, but if you’re in general financial services, for instance, you can offer something to each of the demographics if you tailor your product accordingly.
Traditionalists – Born between 1922 and 1945, many of these lived through the Second World War. They are highly disciplined and show great respect for authority. Many worked loyally for one employer for their entire working life. All are now retired.
Baby boomers – Growing up in the economic boom after the Second World War, baby boomers are well-educated and have also been career-focussed. This generation is motivated by financial reward and ambition. However, they tend to be unsure about technology and slow to adapt to change.
Generation X – Heavily influenced by the economic downturn of the 80s, generation Xers tend to be pragmatic with a pessimistic view on corporate culture. As such, they are sceptical of authority, independent, entrepreneurial and adaptable. Compared to baby boomers, they grew up in a new era of digital technology.
Millennials – Millennials came through a ‘touchy-feely’ educational system, enjoy working collaboratively and are socially engaged. They tend to be idealistic, dedicated and goal oriented.
Post-millennials – This group includes generation Z and is the most technologically savvy having grown up with the Internet from an early age. Indeed, they are largely dependent on technology for much of their needs. It’s thought that generation Zers will be flexible when it comes to their careers, constantly moving between employments and even job disciplines while simultaneously seeking security.
Adapting your business to new markets
Certainly, one of the biggest generational shifts we see at the moment is a greater awareness about environmental concerns, such as a sustainability and climate change. This is why we see businesses, big and small, shifting towards ESG (Environmental, Social and Corporate governance). This has had the effect of altering the perception of companies among younger consumers, making even the most corporate organisation more attractive to the likes of millennials and post-millennials – both in terms of their offerings – and when it comes to employment opportunities.
As purchasing choices change with generational shift, whole sectors are adapting accordingly. Millennials, for instance, are demonstrating a greater interest in electric vehicles and vegan/vegetarian dietary choices, so if your business supplies the automobile or hospitality/food/catering markets, then, clearly, by adapting your own product range, you can win new customers and market share from competitors in your niche.
Customer expectations have always been a primary business disruptor. As one generation begins to retire, another enters the workforce. The effect of this generational shift is felt throughout the economy and business sector. Ignoring it isn’t an option if you want your business to continue to thrive.