Richard Walker, Mustard Director, shares his thoughts on the relative usefulness and value of the “Generations”, and the role of effective market segmentation.

(Content presented previously at Digital City Festival, March 2020).

The Who released “My Generation” in 1965.

It is still popular, with over 126 million plays of the “Stereo version” on Spotify as of April 2020. Other non-stereo versions and other music streaming services are also available. I can personally recommend Deezer.

The NME said at the time the song “encapsulated the angst of being a teenager”. More than 50 years on, the song is still a popular mod anthem, and many teenagers are still full of angst.

Then and since, people have talked about generations, compared and contrasted generations, and more commonly (and especially recently) moaned about generations. – be them the younger snowflakes who don’t know they’re born, or the older, raging, conservative gammons.

The broad-brush approach of classifying generations has proved a useful way of understanding how different people think and behave, particularly for marketers trying to design products, services or campaigns for people of different ages and backgrounds to themselves. Societies have in fact been grouped and described as generational cohorts for well over a hundred years now.

Within this blog, I will initially introduce you to the generations, primarily within the context of the UK market, with some background as to what shaped them, some facts, some stats and some myth-busting surprises too. I’ll show how using generational insights can be useful, but also instances when it’s not useful or (at worst) counter-productive to understanding a market.

The Five Generations

There are actually FIVE commonly recognised “current” generations in the UK. Perhaps surprising for some given the obsession with Millennials. These are some approximate numbers based on Census data published by ons.gov.uk.

The Silent Generation

• c.4.5 million living in the UK
• Born 1925 – 1945
• 75 – 95 years old
• Born in an era when children should be “seen and not heard”.
• Many born into mid-war economic depression and subsequently experienced World War II and rationing.
• This generation have been prolific consumers of media – picture families crowded around radios and the first TV sets and mass newspaper readership. News was gospel.
• They remain big consumers of media – approximately 9 in 10 will have read a newspaper, book or magazine in the past 24 hours…
• …yet around 2 in 3 feel the media and advertising portrays them negatively.
• Do not assume they are offline. Two in five of the silent generation has a social media profile.

Baby Boomers

• c.12.2 million living in the UK
• Born 1946 – 1964
• 56 – 74 years old
• Appropriately named given the “boom” in babies being born after World War II.
• Remaining politically agnostic as ever – the generation that some say “never had it so good” – they were the first generation born in free NHS hospitals, saw the “homes for heroes” housing boom and benefitted from state funded cradle to grave welfare and education.
• Let’s not kid ourselves – Baby Boomers are, on the whole, relatively wealthy – owning over half of Britain’s £11 trillion of wealth…
• …BUT…we know from our previous research that it is not universally the case – for example, in a “At Retirement” segmentation for a UK financial services client, we found a quarter of those approaching retirement age did not have a pension in place or were not planned or adequately prepared financially.
• They are the most brand loyal generation – yet 27% say they feel ignored by brands.
• Do not assume they are change resistant. This generation drove through some of the most significant economic, social, cultural and technological upheaval ever seen. They feel younger than what they are. They are keeping fit. More than four in five belong to at least one social media platform. They are the largest contributors of positive feedback online. They have opinions, and they are not afraid to voice them!

Generation X

• c.12 million living in the UK
• Born 1965 – 1979
• 41 – 55 years old
• This is the bit where I write about myself in the third person. Generation X – undeniably the greatest of all the generations, suave, sophisticated, witty, devilishly handsome, multi-talented, modest… 😉
• Generation X are sometimes referred to as the Independent Generation – growing up with both parents typically working full-time. This generation were also heavily influenced by the politics of the 80s.
• They are defined by a work-hard / play-hard culture ranging from the archetypal yuppie from the early 80s, to the Nuts, Loaded, Stella-swilling Men Behaving Badly lad-culture of the 90s.
• Gen X oversaw a growth in the popularity of branded labels, and a dial-up of self-image, with styles closely correlating to the musical tastes of the mods, punks, new romantics, etc.
• Gen X grew up in an analogue world, and became the original early adopters of tech – console gamers, the first mobile phones, VHS recording, etc. But most have only known the Internet as adults.
• In terms of media, broadcast TV remains important, but this generation now consumes most of its news online rather than print
• They currently earn more than the average, but do not assume they are frivolous with spending. Discounts and rewards are important, and they value loyalty point schemes more than any other generation.

Generation Y – Millenials

• c.11.5 million living in the UK
• Born 1980 – 1994
• 26-40 years old
• STOP USING MILLENNIAL AS A CATCH-ALL FOR “YOUNG PERSON” – some Gen Y’s are turning 40.
• The term Millennial was first used by Neil Howe and William Strauss in the book “Generations”.
• The Gen Y’s have been shaped by big, global events such as the credit crunch recession and 9/11. They have been impacted by rising student tuition fees and debt. They are the first generation to be noticeably worse off compared with previous generations (earning 20% less than their parents at same age).
• Of course, this shapes who they are and how they behave. For example, seeking out value and challenger brands, this generation is also more likely than most to revert to a “side hustle”. They are challenging the established status quo and will voice their frustrations.
• Gen Y’s also believe in quality of life. They are generally well educated, well-read, enlightened and happy to treat themselves.
• Social media has also been a big influencer on who Gen Y’s are and how they engage with brands – this Generation helped make social media what it is today.
• They generally consume content on demand. The majority have a subscription to streaming services such as Netflix / Amazon Prime.

Generation Z

• c.11.2 million living in the UK
• Born 1995 – 2012
• 8-25 years old
• Gen Z are being shaped by the “here and now” – Coronavirus, Geopolitical tensions – ISIS, Russia and political populism, Fake News, etc.
• But it’s not all negative. They are an aspirational global facing generation – inspired by Greta Thunberg – they believe in co-creation and want to see change happen.
• Gen Z’s lives revolve around the Smartphone. Ownership is pretty universal. My 9-year-old is convinced she is getting a phone for her next birthday! In a recent survey we conducted amongst older Gen Z’s we found 2 in 3 would rather go a year without sex than a year without their phone.
• The majority of media is consumed through social platforms. That’s how they get their recommendations and endorsements, that’s how they interact with brands.
• They demand authenticity from brands. They see themselves as responsible consumers. They are the generation most likely to be meat/dairy free (but they are the most erratic eaters / snackers).
• Do not assume that the youngest generation are hedonistic and “experience” driven. There is much discussion online with some commentator’s believing Gen Z are spear-heading a move back to “cool product” over “cool experience” – and that experience is now an expectation.

We know a lot about the generations. But if only it was all so simple.

Of course it’s not. The generations approach provides us with the broadest of broad-brush approaches to understanding people. But it is far from the complete picture…

Centenarians are the fastest growing age group in UK (our congratulations to Captain Tom Moore). The number of 100 year-olds has doubled in the UK since 2020. Because of lockdown I have, unfortunately, been to only one birthday party this year. It was a 100^th.

There are many micro-generations to consider too – for example:

Xennials – born in the late 70s and early 80s, who experienced an analogue childhood and a digital adulthood.

Generation Jones – straddling the “boomers” and Gen X – popularised by Barack Obama, and allegedly perceived by politicians as the most coveted voters within the electorate.

There are the regional and global variations – the Independence Generation / Revolution Generation – born around 1990 in Eastern Europe, The Born Free generation in South Africa, the Stolen generation in Australia.

And then there are the 2.5 million Gen A being born every week around the world, whose first words are likely to be “iPad Mommy”.

There are more obvious drawbacks. Obviously, the sizes of each cohort are huge, and each are far from homogenous. More fundamentally, analysis of the “generations” tells us a lot about what people do, but not about the needs and motivations of the people within each cohort – why they do what they do.

Many of you will have seen this ad for a Danish TV network…

This film makes a strong point about the problems associated with the broad-brush approach to the generations, and putting people in boxes. Segmenting populations (putting people in boxes) is fine, as long as they are being segmented in the right way, and the data being used is fit for purpose. The principle works as long as you put people in the right boxes.

As marketers we need to focus on understanding the needs and motivations, the decision-making drivers. Not making assumptions based on age or other demographics.

This is why market segmentations are amongst the most valuable and strategically important research programmes that Mustard delivers. It is a varied job. In the last few years we have segmented markets as diverse as credit cards, heritage attractions, private renting, menswear, accountancy, people considering higher education and physicians working in ICUs.

Regardless of market, the reasons behind embarking on a segmentation tend to be pretty consistent. Underpinning this diverse mix of research programmes has been a desire amongst our clients to better understand the complexity of the markets they operate in, with the understanding that one size doesn’t fit all. No market is homogenous. Each person has a set of unique and discrete needs and motivations, and it is THESE that drive their behaviours and choices. That’s why, as a rule, we segment on the WHY, not the WHAT or the WHO. We segment on the things that DRIVE the behaviours and attitudes (rather than the behaviours and attitudes themselves). This is about us talking to the “heart” and focusing on the things that matter and the things that can be influenced or satisfied.

Having this insight is difference making. Knowing how markets “cluster” allows our clients to develop strategies that are founded on a better understanding of the realities of a market, allowing them to improve product, service, communications, etc. and more effectively target their “lower hanging fruit”. And when delivered well, they drive customer-centric thinking and behaviours throughout organisations, from the Boardroom to the front-line.