The phenomenon of consumption from generation to generation has been a subject for researchers working in behavioral economics have dwelled on for years. New generations have been classified as generations X, Y and Z with regards to their consumption or purchasing tendencies. These generations, associated with notions such as technology, the internet, online shopping and digital generation, have become the focus of modern marketing and the e-commerce sector according to their characteristics, behavior styles and shopping habits. And when we add baby boomers born between 1945 and 1965 to the mix, it becomes a Gordian knot. So, let us take a look at what sort of economic changes these generations will bring about and the effects Generation Y, which has adopted as a principle to live with the bare minimum without consuming, will have on classic economies in the growth equation of the world.
Generation Y is a subject dealt with in dozens of different studies, and when there are dozens of analogies about it, it becomes quite difficult to pinpoint what this generation really wants. All of these studies have converged on this conclusion: members of Generation Y like flexible working conditions; they're aware of their responsibilities but do not abstain from postponing plans and enjoy straying off the beaten path to "be different." It is not difficult to say that they respect differences, choose the environment over economic or financial development and their greatest ideal is the survival of humanitarian values. We must understand that the last sentence is seriously anti-globalization, and they have declared war on the neoclassic economy — even though they are not aware of it. We cannot predict the future of the global political scene and economy without understanding what these groups, which we have seen pouring onto the streets of Europe and the U.S. in even the smallest of civil commotions, exactly want.
A generation of crises
If we use the term "generation" for people born within the same time periods, affected by the social, economic, cultural and political events, and dominant values of their time and the communities formed by these people, how will generations Y and Z be able to fight the existing system? States have built this Keynesian and monetary expansionist structure because of poverty and upon accumulation. We are trying to convey the worries of a generation of mothers and fathers who saw two world wars, witnessed the collapse of the USSR, experienced the Iran-Iraq war and felt the impact of the Cold War – right down to the marrow for Generation Y, who watches all of these in 10-second video clips on social media and says they were "probably" hard times, while paying absolutely no attention.
Imagine an impatient, individualistic, result-oriented, egoistic and self-confident person and another who is content with what they have and believes every word marketers say going to a car dealership. In your opinion, which one will the dealer be able to sell more cars to in a year? The sociology of the group of people who want everything immediately and only want the best, who consume it as soon as they find it but do not want to pay the price, and are seriously irritated by bureaucracy, are not analyzed enough and not taken seriously.
Let's go back a little bit to figure it out. The generation of 1968 was an important step in the transition to individualism as the voice of modernism in the streets. To buy a house, start a family and make investments had emerged as a completely unnecessary taboo. Although this wind blew strong for a certain period, it prepared its own end as a result of not being able to produce any alternatives, and conservative lifestyles continued to maintain their power. Just like one of the pioneers of post-modern philosophy, Polish sociologist Bauman Zygmunt, said, the only remaining survivors from those days are environmentalist groups and parties, the concepts of feminism and Generation Y's minimalism and inquisitive consumption.
According to "Digital in 2017 Global Overview" reports, Generation Y, which is on social media for a minimum of 6-8 hours a day, and its interest in sharing information and love of shopping online, will be the end of physical stores and shopping centers in the future. As a result, these factors could cause serious unemployment in the workforce. A lot of interesting results were found in Oracle Retail's "The Power & The Money" research, which was conducted with 13,250 consumers from 12 countries. Generation Z had much more complicated demands than Y, and Z stood clear of all products restricting elbow room, the research found.
When considering this group's long-life span and its desire to allocate money for retirement and touristic activities, their refrainment from buying mortgages and vehicles before age 50 was among the findings reflected in the report. It is necessary to say that with respect to current findings, French sociologist Jean Baudrillard, who likes to take on equations of wealth and poverty with a Marxist-Freudian approach, is wrong in his assessment that "in the future new products will reach the lower classes after the rich are satisfied." Although there will surely be a distinction between generations Y and Z in terms of wealth and poverty, their consumption expenditures will be shaped by where they position themselves in the pyramid of needs, not by personal satisfaction.
A change in demand
Consumers no longer act with rational motives but with status expectations. They want a three-month adventure in a village in Far East Asia instead of experiencing the happiness of owning a home after years of paying off debt; they would rather live in the African countryside rather than buying a secondhand car with three years of savings. We'll see how successful it will be to offer mortgage funds, summer villas and hefty pay checks to the masses siding with people and want to turn this into manifestos. So, will no one make money in this time frame? The weakest side of Generation Z, which is its inability to combat fears, seems to be the only prescription for salvation of marketers and national companies.
The most effective way to sell products to these groups will be via redirecting or conditioning as they continue to have protective motivations because they carry the traces of tsunamis, the globalization of terrorism and economic crises. An environment in which fear is fueled via social media is of course the birth place of new sales channels. Those who give importance to green and sustainable marketing, ethical values and recycling will be leaders in the market for environmentally conscious consumers. As Arnold Mitchell, who managed to analyze what we are going through now in 1977, said in his book "Voluntary Simplicity," "outwardly simple but inwardly rich" will be the new generation's expectation from life.
The economy and demand equations are changing, and the world the new generation is craving is approaching rapidly. We don't know if the system or the people will accept it. However, I have not yet come across a Generation Z child who cannot make its parents do whatever it wants by throwing a temper tantrum in the street.
* Ph.D. researcher at the Private Company Economic Research Department MENA at Swiss Business School