In less than 10 years, Generation Y will represent one out of three North American adults. This one cohort will fundamentally shift capitalism in a way no previous generation has. The millennial generation, the children of the baby boomers, are 80 million members strong and will represent $1.4 trillion of spending annually by 2020. That is only six years from now!
Why should you get excited? Generation Y cares more about the world and social causes than any previous generation. They are connected, passionate activists and are starting for-profit corporations as their tools for social change. The gap between activism and capitalism is closing and closing fast.
Peekaboo Beans, based in B.C., is an emerging brand of high-quality play wear for children. Traci Costa, Peekaboo's founder and CEO, started the company with a mission to gets kids playing again. Costa was reading study after study that showed that children developed through free, unstructured play and yet our technology-driven society is drastically reducing free play time for children. Parents are over-scheduling their children with activities and their kids' social development is suffering.
Peekaboo Beans is actively promoting a play revolution: Proceeds from its sales are building playgrounds in war-torn countries. At its roots, Peekaboo Beans is a stand for a world left better because of itself and is making bold declarations about parenting. The company has engaged an army of millennial mothers who act as its missionaries and sales force.
Generation Y entrepreneurs are rewriting the rules of business because they have different values than their parents. In fact, I believe that millennials will reject their parents' status symbols and will shop for status far less than previous generations. Some survey results to consider:
- 37 per cent of Millennials claim to distrust big business.
- 50 per cent + of Gen Y parents try to buy products or services that support charities or social causes.
- 85 per cent want work that makes a difference and is enriching to themselves but also enriching to the world.
- 90 per cent of Gen Y MBA graduates would take less pay to work for a company that better reflected a socially conscious value system.
This shift of consumer mentality will provide the builders of the next great consumer brands amazing opportunities. Here are 3 trends on Gen Y spending that entrepreneurs can and will take advantage of:
- Experience is the new premium. Generation Y wants to experience the world and is seeking self-actualization much earlier than their parents. Aspirational consumer brands that incorporate experiences will relate much quicker than simply offering products on a shelf.
- Local matters. In apparel, food, and entertainment, locally produced matters. Companies that commit to their communities will relate better to a generation that cares about connecting to each other in meaningful ways. Family style eateries serving locally sourced food featuring entertainment from local artists and musicians truly captures the essence of this trend.
- Luxury Sustainability. There is a white space in the market; I call it luxury sustainability. No affordable luxury or premium brand has grounded itself in a mission-based approach to business. The higher end consumer brands such as French and Italian couture labels are not aspirational products to Generation Y. It won't be much longer before values-aligned designers capture the imagination of the Millennials by combining both aspirational design and societal benefit.
Capitalism is changing. With the emergence of the largest demographic cohort in global history, -- generation raised on recycling and social causes -- there is reason for us to have optimism for the world our children will inherit.