The generation myth

Marketing is over-run with stereotypes, hot takes and clichés. One of the most enduring this century has been that post-1980 millennials are a generation that will completely disrupt business. Now Generation Z, born post-1995 and entering the workforce in large numbers, are touted as fundamentally changing how brands need to behave. Decades of research show that much of what passes as startling new insights about generational change is likely to be misleading or wrong.

Articles abound suggesting millennials are destroying whole categories of consumer goods – soap, napkins, you name it. It is asserted that they want fundamentally different things at work from older generations, and that you need a millennial council to represent them. Goldman Sachs claimed millennials are fitness fanatics – ignoring the fact that they actually are more obese than Baby Boomers or Generation X were at the same age. 

Gen Z, on the other hand, are often made out to be obsessed about ‘brand purpose’ and climate change – but it’s actually older people that are more likely to boycott brands, and, in Ipsos Mori’s latest study, older people are also more likely to see climate as a key issue facing the country. In contrast the young are worried about more immediate issues like low incomes and housing. 

Better analysis can help separate the myths from realities. The marketing and advertising industries are the noisiest producers of generational hot takes ­– and often nonsense. This raises an interesting question. Why would businesses that have a wealth of data on real consumer behaviour be so obsessed with the young, when the over-50s have far more spending power?

One is the sector’s perennial obsession with novelty and change. You can see this in the growth of ‘generational consulting’ as its own mini-industry: even back in 2015, US companies spent up to $70m on it, according to the Wall Street Journal, with some experts charging as much as $20,000 an hour. More than 400 LinkedIn users now describe themselves solely as a ‘millennial expert’ or ‘millennial consultant’. 

Of course, you may also call it, as a contributor to the article on the phenomenon suggested, “a racket” built on “pseudo-expertise, playing to executives’  anxiety that they don’t have their fingers on the pulse”.  The problem is that much research too often mistakes these huge demographic groups – everyone born in a 15-year period for example – as targeted segments that are both coherent and completely different from other huge demographic groups.  

Laughable examples include Air France, who claim millennials are “epicurean and connected… opportunistic in a positive sense of the word as they know how to enjoy every moment and are in search of quality experiences that they want to share with others”.

One of the over-arching stories of the last decade has been the death of car ownership among the young and their embrace of businesses like Uber, the decline of home ownership among the young and the rise of rise of renting. One can read endless suggestions that ownership is out, and the new generations are after experiences and embrace the sharing economy.

Instead detailed academic work shows it is more due to the effect of the Great Recession than generational change. Professor Bobby Duffy’s new book, Generations, makes this point eloquently. Delayed family formation and home ownership among millennials coming of age in the aftermath of the recession explain a lot more than generational change – once one understands how financially squeezed millennials are compared to Baby Boomers at the same age, much of the apparent difference in aspiration is explained.

Millennials and Gen Z are simply realists. Many of their much vaunted differences are not by choice, but because they are simply poorer than previous generations at the same age. Generational change is too big and important an idea to leave to millennial consultants peddling confused hot takes.

What does the average executive do in the face of all this? Some academics think we should stop all reference to generations: there is an open letter to Pew Research Center signed by 180 professors and lecturers calling on business to stop using generational terms as it gives them a legitimacy they don’t deserve.

I think that’s the wrong response. Using a generational lens is an important way of understanding how societies and consumers change. The real task is to separate three effects that explain changes among consumers.

First, which patterns are simple lifecycle effects – for example people tend to be more likely to be physically active or date more when they are young, and all generations go through this life stage. Which are period effects – for example living through the Vietnam War, the Great Recession or a pandemic affects all generations. And finally, and most importantly, which are cohort effects, where we can see that a new generation is different from others at the same age, and is staying different. If we do that, we can predict the future in a much more meaningful way.

When you do that you can see real shifts like decline in religious belief and party loyalty, and acceptance of LGBT rights are here to stay, but that other apparent trends like declining home ownership or the popularity of car ownership might be more transient.

In the end, no matter what we do, generational stories will continue – because as human beings we love to tell simple narratives that make sense of the patterns we see around us, and help us work out we are and are not. We are compelled to understand how we fit into the overall picture, even if it’s not a completely truthful vision. We also always find it irresistible to ridicule the young and the next generation, but that’s another story. 

Ben Page is chief executive of Ipsos Mori