Editor’s note: Bonnie Chiurazzi is a research director at market research firm Murphy Research, Santa Monica, Calif.
What's the difference between a Millennial and a young adult?
Ponder that for a moment. To set the scene, let's reflect on what was happening in the realm of marketing research in the 1990s and early 2000s. Millennials were growing up, becoming tech-savvy and eagerly participating in all the new social media networks. At the same time, researchers were discovering a wealth of data online, especially through social media and the availability of sample for online surveys. Shortly thereafter began the Great Recession, the economic event that shaped the Millennials' prospects just as they were ready to enter the job market. They stayed at home, went back to school, took advantage of the gig economy and eventually they trickled into the workforce. At first, there was a lot of interest in catering to these novel consumers with fresh new careers. Brands wanted to sell to them and companies wanted to hire them.
And then, when they were just about to embark on their adult life (albeit later than the previous generations), the Millennial bashing began. Their publicly available digital lives and willingness to share their opinion came back to bite them. Sure, there were some great insights in the mix but study after study began highlighting the perceived flaws of this generation. They were late-blooming, lazy, entitled spendthrifts who spent most of their time socializing and skirting responsibility. That was about 10 years ago. Those sentiments have been used to describe previous generations as well. Older generations watching Boomers and Gen Xers emerge as adults questioned the ability of the younger generation to grow past their childlike nature and become contributing members of society. Which they did! And so are Millennials. And yet, the Millennial bashing still hasn't stopped. What exactly is going on here?
Life stage vs. generation
A young adult is a description of a person over the age 18 and up to mid-to-late 20s. A Millennial is a construct embraced by researchers, created to facilitate a faster, better, instantly recognizable understanding of a specific consumer, born between the years of 1981 and 1996. A young adult will never age past their designated life stage. Depending on social and economic variables, it might make sense to shift the age range here and there. But demographically, that life stage is relatively stable. Millennials, however, will age. They will eventually travel through the cycle of life stages, even if they skip a few steps here and there. Just as Boomers aged out of their hippy phase and Gen Xers eventually conformed to societal norms, Millennials will adapt to their changing life stage. Their perspective will continue to be impacted by societal, economic and technological developments that will influence their attitudes and behaviors. Think of it this way: The generational cohort is the character and life stage is the context. The attitudes that the character has and the choices that the character makes are largely dependent upon their current context.
For example, Millennials are now between the ages of 22 and 38. This means some older Millennials are settling into a young family life stage while the younger Millennials are still in the young adult life stage. When a generation straddles two life stages it becomes even more important to pay attention to the role of life stage in addition to generational insights. As Millennials settle into adulthood and raise families, their priorities will change. The generation that has been berated for spending too much on avocado toast will likely become more focused on securing their financial future. However, their reliance on technology and desire for easy access to detailed product information and reviews will probably remain a key differentiator between Millennial shoppers and older generations. Differentiating between which characteristics will fade and which characteristics will continue to define a generation is incredibly valuable for consumer-facing brands because it gives brands a window into that generation’s future.
Outdated beliefs
The ever-evolving nature of generations should be something brands leverage, not lament because it is the key to uncovering new opportunities for success. Outdated beliefs hold brands back and keep them from obtaining accurate insights about a specific generation, especially when that generation moves into a new life stage. Without accurate data, it becomes much more difficult to design products, experiences and messages that will resonate with a target audience. An easy solution to help prepare for shifts in generational cohorts is to track generations by life stage.
Figure 1 shows four very simple life stages: young adult, young family, growing family and empty nester. Each life stage is defined by the importance placed on six attributes: education, career, friends, financial investments, parenting and marriage/family. The bars indicate how much of a priority is placed on each of the six attributes at that given life stage. And above it are the generations spread across the life stages that accurately reflect the current ages encompassed within that generational cohort. A simple tracker like this is an example of how to monitor where your target customer is in terms of generation and life stage in addition to helping prepare for the upcoming generations that will begin to cycle through.
This example is simple and completely derived from experience reviewing demographics from a multitude of research projects, so please consider it illustrative. Something like this could be customized for every brand to help it develop products, services and messages over the course of a generation’s life. If a brand already has a brand tracker, awareness and purchase metrics could be included by generation and life stage for added insight.
Set up is simple. First, you'll want to agree upon the birth years for all living generational cohorts. There are several interpretations of birth year cut-offs, so it's important to agree on this as a team. Then it's a matter of solidifying the definitions of life stages that matter most to your brand and collecting the necessary data from brand trackers or open source data. The life stages could be traditional or specifically developed for your industry (e.g., the career life stages of an IT decision maker). The key is to develop a framework that allows your brand to distinguish between norms related to age groups from norms related to generational cohort. This will allow the brand to better understand the upcoming needs for each generation as well as point it toward the best ways to tailor solutions for specific generations.
Consider collecting the following data to better understand life stage:
- age;
- household income;
- marital status;
- highest level of education completed;
- number of children in the household;
- homeowner status (own, rent, live with family, etc.);
- neighborhood location (urban, suburban, rural);
- financial status (level of confidence in their current savings, retirement fund, etc.);
- employment status (including years in current field);
- average time spent working each week;
- average time spent with family each week;
- average time spent with friends each week; and
- average time spent pursuing personal goals each week.
Yielding rich insights
Developing a customized framework to analyze both the generation and life stage of your target customers will yield rich insights and clues into what they will need in the future. It may also reduce the bias caused by sensationalized reporting of younger generations as they transition into adulthood. As we turn our attention to Gen Z, let's appreciate the context of youth but focus on their true character and unique attributes. And as researchers, let's do the best we can to stop the get-off-my-lawn research mentality that grabs the media spotlight and show these young adults the same respect with which we would like to be treated.