Wednesday, May 6, 2009

Consumer Research, Technology and Generations

My colleagues and I have defined an observation that we have made while conducting a significant amount of consumer research over the past decade. We have been calling it "Generational Expectations." It existed long before we named it and will continue, probably forever. Basically, it is the reason we adults fail to understand kids behaviors and lament that they don't appreciate what they have. We are all a product of when we were born. Two factors have changed dramatically and make it more important to understand the effects at this point in time, especially for consumer product and service companies. First, the speed of change around us has accelerated significantly. And second, technology has become pervasive and influences most areas of our lives. Consumer product and service companies must now launch and maintain offerings in a far more challenging market place.

We identified three stages of life that consumers past through. The first is when a generation moves through their formative years from toddler through teenager. We call these experiences ‘innate’ as they establish each generation’s technology baseline. In their early twenties their personal baseline has been created. This baseline sets what each generation expects as a minimum or expected experience. For Boomers it was TV and phone service however for Millennials it is cell phones and the Internet.

Generations beyond this formative period, early twenties through late forties, must adapt to the new technology, often relearning or changing a familiar behavior. We call these experiences ‘adaptive.’ During the adaptive period, consumers are looking for the connection between what they do today and how a new technology could help. They then adapt their old behavior or habit to the new technology. As you would expect, the adaptation process is much slower than the uptake during the innate phase. Boomers learning to use email instead of snail mail or texting in place of a phone call are examples.

From early fifties to death, consumers begin to resist change, especially from technology, often being suspicious of the changes. To the extent they can, this age group will try to prevent new technologies from impacting their lives. We call these experiences ‘resistive.’ To the degree possible, this age group is comfortable with what they have and how they do things. They have been through many adaptations and are ready to enjoy life as it is with less disruption.

The reason we separate the three experiences, innate, adaptive, and resistive is that they shape how consumers view and adopt products and services. Much of the often hyped coverage of the differences between seniors and Baby Boomers, Gen X’ers and Millennials is actually a result of the timing of technological influences on their respective lives.

Consumer facing companies must shape their research very differently to understand how generations in each phase perceive the offering. Most of the research today falls in the adaptive phase which for many companies is their core segment. It is important however, to understand for younger segments not the willingness to adapt but how it could fit in defining their baseline. Similarly, for older segments it is important to measure the strength of their resistance.

4 comments:

Chat Chart said...

Very interesting thoughts. The part I don't get, however, is why some seniors are resisters and others are not. What other factors influence this? I wonder if it's connected to personality or just how successful they were adapting in their middle years.

Tony Barra said...

I agree, I think there are outliers or exceptions in each generation. I have seen Millennials who have no desire to use technology also. I do think it is probably connected to life experiences that disrupted the normal flow. It would be interesting to research the "anti-" generation examples.

kenstampe said...

Tony,

I appreciate when dividing all consumers into just 3 categorical definitions you are definitely painting with a "wide brush". However, I wonder if you could comment on some trends that seem contrary to your definition of the over 50 crowd. Such as:

50% of Kindle users are 50+ in age
http://www.marginalrevolution.com/marginalrevolution/2009/04/old-people-love-kindle.html

Fastest growing age demographic on Facebook is women over 55

http://www.insidefacebook.com/2009/02/02/fastest-growing-demographic-on-facebook-women-over-55/

74% of consumers age 64+ use e-mail on a regular basis which is 1% higher than teenagers as surveyed by the Pew organization
http://www.pewinternet.org/Reports/2009/Generations-Online-in-2009/Generational-Differences-in-Online-Activities/2-Internet-use-and-email.aspx?r=1

I suspect if you look at generational divisions as it relates to adoption of a product or technology then certainly the older groups adopt more slowly. However, they do adopt technology. From 2005-2009 the Pew organization found that the fastest growing segment of on-line users (by percentage) were those 74+ in age (it went from 25% in 2005 to 45% in 2009).

Good topic Tony.

Ken

Tony Barra said...

Great comment, first though, I think I need to clarify a bit. My hypothesis is not so much the categories of consumers but that there are phases that consumers move through, in other words, Gen Yer’s are moving into the early stages of adaptation experiences. They may look at Twitter and see a tool they can adapt to better text groups of friends, for example. So even though we know that the baseline set for Gen Y’s or Millennial’s is very technologically savvy, they will not continue to remain as open to new technologies as they have been.

As for Kindle, I think so far it is a tiny niche product. Cool and interesting? Sure, but adoption is very limited and Amazon has been very quiet about sales. The results you referred to are pretty limited by the approach - taking demographic info based on postings. So I can’t really suggest that the numbers are accurate. However, I think the comments about the posting do shed some light that support my theory. Just to cite a couple that supported the skew to older consumers, several pointed out the ability to increase the font size for readability. While some of the other comments, perhaps made by young consumers, suggest the iPhone or even laptop as better alternatives. I think today’s Kindle could be a great “adaptive” technology example. Older consumers with sufficient funds and increased book consumption might be the core segment. That is until we see a generation that has an innate experience with e-books in their grade school classrooms.
I was a bit surprised when I saw those stats on Facebook adoption. As I am frequently when I see reports that don’t seem to fit what I am seeing in real life. I did a little digging and found my answer which is that a segment can show huge growth by going from 1 user to 100 which is the case here. The graph http://www.insidefacebook.com/wp-content/uploads/2009/02/20090201fbdemobar.png shows the population which is perfectly aligned with Generational Expectations. I do think Facebook may be another great adaptive example as Boomers find it useful for keeping in touch with old friends and family. (I plan a blog entry on this very soon.)

Email, another great point, my hypotheses is that email is “so last generation.” My research shows that the phone and not the PC has become the core technology device for younger generations and with it texting has replaced email. The Pew Internet & American Life Project noted the same observation, “At the same time, email has lost some ground among teens.” Also, as above, you reference a percent of a percent (online Seniors using email) and as above this can sometimes lead to inaccurate conclusions – more Seniors use email than teenagers – 74% to 73%. The numbers are actually that twice as many teens use email as Seniors – 67% to 33% - but that is not much of a headline. As the graph indicates http://www.pewinternet.org/Reports/2009/Generations-Online-in-2009/Generational-Differences-in-Online-Activities/2-Internet-use-and-email.aspx?r=1 Senior’s are still way behind in getting online. This should continue to change as Boomers age because they have already adapted and will continue to adopt the Internet.

Again, I completely agree this theory is a broad brush and the biggest take-away I can suggest is to consider the transitions consumers make through their lives. Gen Yer’s will always have a high comfort level with new technology but they too will begin looking at new offerings to see how it might help do what they are already doing and their adoption will slow.

Ken thanks for your comment. It is exchanges like this in which better ideas evolve! I am interested in thoughts about when consumer become more resistant to change. Thanks.