Young consumers are facing up to a different, less predictable reality in terms of purchasing aspirations, work, living set-ups and role models.
This piece is the ninth in a weekly series of consumer comments exploring each of the trends Euromonitor International identified in the recent Top 10 Consumer Trends for 2012 article.
“How did I end up at Mom and Dad's? My job took me around the globe. But the recession took me to the one place I never thought I'd go: My folks' house”. So starts an autumn 2011 article on online news portal Salon.com. Millions of young people around the world in 2012 can identify with this sentiment about clipped futures and interrupted dreams. Now there's less talk of adults who are only as old as they feel, and more media and public comment on a perceived risk aversion among many people in their teens, twenties and thirties – particularly digital natives. How young people are coping with an imperfect future is of great interest to brands. Many marketers are focusing on the youth relationship to and expression through tech-led communications in their wish to decipher this transient audience segment.
Living in a 'famwich', unemployment, debt and other challenges
The high cost of living, job losses, mounting student loans and the need to save more for first homes are pushing more young adults into delaying taking the steps that traditionally represent movement into adult life. An increasing proportion is living in multigenerational households comprised of parents plus grown kids and even an older or younger generation in a trend dubbed famwich. “Many young adults are essentially postponing adulthood and all of the family responsibilities and extra costs that go along with it,” Mark Mather of the US Population Reference Bureau told the AP.
Youth Unemployment Rate in selected countries: 2007-2011
Source: Euromonitor International from trade sources/national statistics
Note: Youth Unemployment Rate refers to the young unemployed aged 15-24 as a percentage of the economically active population of the same age
“We have a monster jobs problem, and young people are the biggest losers,” Andrew Sum, an economist with the Center for Labor Market Studies at Northeastern University in the USA told the Associated Press recently. According to young Japanese worker Megumi Sakaguchi, “I never know if I'm going to lose my job. Financially my anxiety levels are very high.”
A third of respondents to Euromonitor International's Global Youth Survey which polled young people aged 16-24, say that unemployment and lack of job opportunities will probably have an impact on their future happiness, and another 40% say it definitely will: meaning three out of four young people are concerned about their future job prospects.
Young people in emerging markets are also affected by unemployment, despite high rates of economic growth. This is often due to the fact that emerging markets tend to have much more youthful populations than developed economies, leading to an oversupply of labour.
Globally, family priorities are not top of the youth agenda right now. Euromonitor International's Global Youth Survey found that in all countries surveyed, for instance, good health and having a rewarding job/work are seen as more conducive to happiness than being a parent. Everywhere except Indonesia and Russia, young people think having fun and an active and varied social life will be more fulfilling than raising children.
Debt is a young person's problem too. One-third of people in debt in Switzerland in 2011 were aged 18-25, according to the Federal Commission for Childhood and Youth. For young people, the top area for unpaid loans was found to be telecommunications, followed by health and e-commerce. Writing in Peruvian newspaper Los Andes in February 2012, market researcher Óscar Banda said that young consumers aged under 25 were not financially savvy and were racking up debts buying clothing and electronic gadgets in the country's current consumer credit boom. The rapidly rising cost of higher education in many countries is also saddling many young people with debt.
Is the mood among young consumers about future prospects downbeat or optimistic?
They have been described as “generation limbo”. Some are highly educated 20-somethings struggling with dead-end jobs; others are NEETS (not in education, employment or training) with few work prospects. For young people that have been raised with technology offering instant results, it is perhaps extra hard growing up in an economic downturn in which they are under great pressure to succeed but forced to adjust to a shakier reality, prompting scores to join protest movements.
Euromonitor International's Global Youth Survey reveals that when asked about the extent of their agreement with the statement “I like to enjoy life and don't worry about the future”, 30% of respondents disagree, and 10% disagree strongly. Meanwhile 23% of respondents agree and 8% agree strongly.
“We need to stop expecting graduates to follow the path that people followed 20 years ago,” said Arnold Parker, a 25-year old biological sciences graduate in Auckland. “We should all just relax and realise that life is long and there's no hurry. I always thought, 'I'll finish my degree and I'll get a job,' but then the reality hit.”
Leon Gettler, a writer for Melbourne's daily broadsheet newspaper The Age, is more upbeat about the changes in life course patterns among young people, seeing later ages for marriage, parenthood and home purchases: “Most adults who live with their parents are, however, fine with this. They are willing to sacrifice not having a secure place in established society for the freedom to try new things and travel the world,” he wrote, also alluding to the increased discretionary income of much of this segment.
There has been some criticism of the negative influence of celebrity culture on young people. Last December, UK Schools Minister, Nick Gibb, warned that British children are growing up in an 'empty' and 'destructive' celebrity-obsessed society that is breeding a consumerist 'got to have it now' culture.
However, based on results from the Euromonitor International Global Youth Survey of young consumers conducted last autumn, consumers aged 16-24 tend to look up to their parents and significant others as role models rather than celebrities, teachers and politicians.
Role Models of Young Consumers (Ages 16-24)
Source: Euromonitor International Consumer Survey – Global Youth
Are youth and technology joined at the hip?
Euromonitor International's Annual Study 2011 shows that with the exception of internet banking, younger respondents do more on the internet from ordering takeaway meals to tweeting, and do so more often. It also reveals that young adults are four times as likely as consumers aged 60+ to own internet-equipped mobile phones (40% versus 12%). In the latest Booker Prize winner, “The Sense of an Ending”, author Julian Barnes writes: “The younger generation no longer feels the need, or even the obligation, to keep in touch. At least not 'keep in touch' as in 'seeing'”. Interestingly, however, of respondents to Euromonitor International's Global Youth Survey, only 26% agreed that online communication was preferable to face to face communication.
Price deflation is likely to result in parents' gadgets becoming increasingly affordable to tweens and teens, which will inevitably lead to more parents buying them for their children. The trend towards high-tech devices for youth will become increasingly prevalent in emerging markets too. In India, the government plans to roll out its low-cost tablet device, known as Aakash (“Sky” in Hindi), into schools nationwide during 2012.
According to Neil Howe, author of recent book “Millennials Rising”: “The charge you hear today is kids are addicted to social media, internet and cell phones. It's not technology; it's their friends and groups they're addicted to.” He also argues that a lack of anonymity is making today's children more averse to risk than previous generations: “You can't do something risky and not expect it to be brought up (on social media),” he maintains.
Kenyan journalist Cosmus Butunuyi similarly thinks young people are not just gadget driven: “Generation Y in Kenya is not necessarily driven by social networking, fast cars and technology gadgets as it was previously perceived to be but rather it is driven by the urge to grow, gain experience and succeed at an early age.”
A number of games and apps aimed at young consumers address youth concerns like unemployment. Fliplife is an online game in which users virtually take up a profession in assorted companies and solve real business challenges. Dr Job is a smartphone app from French bank BNP Paribas to help candidates with the recruitment process.
Shopping as a hobby
Shopping is increasingly perceived as a hobby by youth rather than a necessity. According to a mid-2011 article in the Irish Times newspaper: “Twenty years ago, the idea of Irish school children listing 'shopping' as one of their hobbies would have been unthinkable... this is exactly what's happening.”
Euromonitor International's Annual Study 2011 shows that window shopping is most popular among the youngest age group (aged 15-29): 56% of them like to visit malls, even without planning to buy anything, compared with just 39% of those aged 60+.
Teens with disposable income are increasingly turning to the web to learn about products and make purchases. Savvy clothing brands like ASOS or Zara are courting this youth interest in style and shopping and offering young fashionistas the chance to express their love of clothes inspired by street style.
Talking to Australian magazine www.themercury.com.au, 21 year old trainer and model Scarlett Lennard says “chain store fashion has allowed women to buy in bulk and offload purchases via auction websites, giving them more money to buy new season items.”
Look out for the tenth in the series: TOP 10 CONSUMER TRENDS FOR 2012: Weight as a Hot Topic
Euromonitor International's Annual Study surveyed 16,000 consumers of all ages (15-65+) in eight mature and developing markets in July and August 2011, questioning respondents on the following themes: health and wellness, food and drink, technology, shopping and leisure, personal traits and values.
Euromonitor International's Global Youth Survey reached out to young consumers living in 15 countries with the largest and fastest-growing youth populations. Fielded August-September 2011, the survey questioned 16-24 year olds on the following themes: financial expenditure, food and drink, technology, leisure activities, personal traits and values.
In Quick Pulse surveys, Passport Survey reaches out to Euromonitor's network of in-country analysts and in-house researchers around the world in order to find out more about current consumer attitudes and habits on a wide variety of topics, from economic outlook to daily activities.
Note: Euromonitor surveys are online surveys; all respondents are drawn from the online population in any given country, not its population as a whole. This means that in emerging markets, respondents tend to be more educated, affluent and urban.