Affordability is tie that binds 'con-demmed'
Brands aspiring to connect with 18-to 24-year-olds must now tailor their offer to five distinct groups within this demographic, according to research seen exclusively by Marketing Week.
The employment outlook for young adults in the UK is bleak, with one in five out of work - the worst figure since comparable records began in 1992. But according to new research shown exclusively to Marketing Week, not all of these consumers are responding to economic hardship in the same way.
Young people show diverse attitudes towards the economy, their education and consumer brands, falling into five distinct groups according to agencies Karmarama and Dipsticks.
Researchers surveyed 1,000 18 to 24-year olds - an age group the report calls the ‘Con-Demmed youth’, referring to the Conservative and Lib Dem government under which they find themselves.
Of the sample, 23% are classed as Go Getters, the most ambitious and socially aware people, contrasting with the 22% who make up the more easygoing Passive Massive segment.
Cotton Wool Kids - financially protected young adults - comprise 23% of the age group, while 15% are classified as Shundergrads, who are extremely savvy and see little need for a university degree. Finally, 17% fall into the Minimum Rage group - the most likely to be unhappy and lacking in ambition.
The Go Getters are mostly female, characterised as being academically successful with strong career goals - 95% want to reach the top of their profession and 50% say they would like to start their own business one day.
Where brands are concerned, the Go Getters are not particularly materialistic but do have an appreciation of products as status symbols, according to the report. While 74% shop in H&M and 73% in Primark, they are also likely to express a preference for premium and luxury fashion brands such as Ray-Ban and Jimmy Choo.
Although Go Getters are happy mixing high street and designer goods, they are as likely to spend money on socialising as on possessions, favouring mid-market restaurants such as Pizza Express and Wagamama. They are also willing to pay a premium for Fairtrade and organic goods.
Brands looking to target Go Getters would be advised to emphasise their quality credentials, according to Karmarama chief strategy officer Sid McGrath. “When it comes to brands, they appreciate really good design - quality over flashiness. You see that in the brands they buy into. They are blending high street brands and designer brands in a really interesting way,” he says.
“Go Getters will buy from Topshop, Zara and H&M, then put a designer item in their wardrobe. But they will not spend all of their money on that designer piece.”
In marked contrast, the Passive Massive group shows little discrimination and lacks strong opinions in terms of both the brands it consumes and its outlook on the state of the economy.
These people have a high level of unemployment, at 29% compared with an average of 17% across all groups, but adopt a laissez-faire approach to their future prospects with 55% saying a career is not necessary for their happiness.
The Passive Massive goes with the flow when it comes to brands, conforming to mainstream attitudes. They aspire to middle-of-the-road brands such as Ford and Dorothy Perkins, and tend not to want expensive technology or to eat in upmarket restaurants.
Being easily influenced by prevailing trends, these consumers are unlikely to be loyal to brands and could be particularly responsive to marketing messages, according to McGrath.
“The Passive Massive is an audience that would be classically guided by cut-price promotions. They will be relatively promiscuous and there could always be a better option for them. Clearly they are not going to have a great deal of money, and because they are not particularly discerning about the quality of the brands they buy, it will be whatever catches their eye.
“I would not be surprised if, for example, they were on the Orange mobile phone network because of its two-for-one cinema offer.”
Like the Passive Massive, Cotton Wool Kids are also relatively unconcerned about the poor jobs market, but this is because their parents provide them with a financial safety net.
They are career-driven like the Go Getters, with 92% wanting to reach the top of their careers; but they generally come from families in the elite professional classes of society, whereas Go Getters are more likely to have a modest background. As such, Cotton Wool Kids believe they can afford to be more materialistic, and reject budget and mid-market brands such as Netto and KFC.
They would be a “hard group to crack” for marketers at lower-priced or less fashionable brands, according to McGrath. Significantly more own smartphones (66%) and laptops (95%) than other members of the 18to 24-year-old age group. They also count premium brands such as House of Fraser, French Connection and Waitrose as everyday destinations.
Their aspirations reach a bracket higher into haute couture, with fashion labels Manolo Blahnik and Alexander McQueen among the brands they would like to own.
McGrath says: “These are brands that signify the Cotton Wool Kids. They are a little bit exclusive, demonstrably discerning. However, they are probably also going to shop on the high street from a relatively wide range of retailers.
“They are young enough to pop into Topshop or H&M, but when it comes to brands they will talk about, that they really admire, it will be the ones that have the high price tag. They are the ones that carry the most kudos for them.”
Meanwhile, Shundergrads - the group that sees no need for a university education but are savvy shoppers - are unlikely even to consider high-end designer brands as being within their options. Being focused on weighing up costs and benefits, they even consciously reject “middle-class” brands such as Waitrose and Ask. Instead, they are likely to frequent the big four supermarkets and restaurants such as KFC on an everyday basis.
Their sentiments towards brands are governed by the same no-nonsense approach that leads 75% of Shundergrads to believe that a university degree is not required to progress with a career.
More than two-thirds also believe that only those with rich parents can now afford higher education, as a result of the increase in tuition fees brought in by the coalition government.
This does not seem to hold them back, with many preferring vocational qualifications, and they are still likely to hold conservative views. The Sun is the preferred newspaper of Shundergrads and they are also fond of established British brands, aspiring to the likes of Mini and Marks & Spencer.
Shundergrads make the most of limited opportunities by training on the job or taking on apprenticeships. They “despise students and scroungers”, according to McGrath, having started working from a young age. They would therefore probably have little sympathy for the final group identified by the report, Minimum Rage.
Unlike the Shundergrads, this group takes little responsibility for their lot in life, blaming the economy or the government for their lack of a job or qualifications. At 35%, the unemployment rate among the Minimum Rage group is higher than among the rest of the 18 to 24 demographic.
Their attitudes towards brands are highly polarised. They use cheaper brands day to day, such as Primark and McDonald’s, while 44% aspire to own a Vauxhall car; but they also have a love of luxury items from Louis Vuitton or Gucci.
According to McGrath, upmarket brands should be worried about this group latching onto them, creating “chav” associations such as Burberry suffered in the Nineties. He suggests that these brands need to control their distribution more closely in order to avoid being damaged by an abundance of discounted or counterfeit goods.
The Minimum Rage group is perhaps a familiar stereotype, having received a great deal of media attention during the UK’s riots in August this year. McGrath says: “When somebody created the spark of discontent during the summer, this is the group that really kicked off. They are deeply unhappy with their current situation and they do not have a plan.”
Comprising only 17% of 18to 24-year-olds, according to the report, the recent focus on this group is disproportionate to its size, McGrath says. The vast majority of young adults have a far more positive outlook and show diverse interests to which brands could target their appeal.
But while the ‘Con-Demmed youth’ as a whole might not be a lost generation, 60% think the economy will get worse before it gets better and 50% expect to be poorer financially than their parents. This remains a group for whom products need to be affordable as well as aspirational.
WE ASK MARKETERS ONTHE FRONTLINE WHETHER OUR ‘TRENDS’ RESEARCH MATCHES THEIR EXPERIENCE ONTHE GROUND
Tragus Group (owner of Bella Italia, Strada and Café Rouge)
The 18 to 24-year-old is a real target segment for us. Bella Italia is their preferred brand of our portfolio, which is why we have tried to have a more social interaction with them.
For 48% of 18 to 34-year-olds, the first thing they do in the morning is check Facebook, and 28% of them do it before they get out of bed.
We have put a lot of that insight into developing our Facebook pages. We have interactive competitions and vouchers for money-off deals within the restaurant. That is targeting the younger demographic that we know likes the brand, but we want to make it more affordable for them to dine.
Strada and Café Rouge also have social media platforms. The young audience sees Strada as aspirational and by offering them a discount, particularly set-price menus, they find an affordable treat.
With Bella Italia we are trying to make it an everyday place that they can afford to go to with their friends. We have created a new positioning called Bella Life, which is about sharing social times with family and friends. We launched a menu of sharing dishes.
Some young adults have more disposable income because they are choosing to stay at home with their parents and therefore they have lower outgoings in rent. We are very strong with students and first-jobbers who still live at home. We also see a lot of young families. Bella Italia is where they bring their children because they feel they can have a grown-up experience, but if a child knocks over their Coke, it is not the end of the world.
UK country manager
Game House (casual game developer)
The good thing about casual gaming is that it is one of those anomalies - when there is a recession or the market gets tough, our unique users go up because more people spend time on escapism.
The message does not necessarily change, but the vehicle we choose to get it out might. For example, we have a deal in place with BlackBerry. If someone buys a specific handset targeted at a specific audience of young women they get a gaming voucher allowing them to get our games free.
We see such a massive uplift when there is an economic downturn because more women are sharing cheap or free ways to chill out for a little while and forget about work.
As far as our website is concerned, I would not say the message has changed because our traffic figures have gone up by a quarter this year and we expect them to keep going up next year. That is directly attributed to people having more time on their hands, not having a job and getting away from daily struggles.
Head of marketing
Penfield (outdoor clothing brand)
We have pretty classic styles and the brand is popular among the 18 to 24 age group. That is also reflected in our distribution, with Urban Outfitters one of our main retail accounts. It is a heritage brand - we have been going for more than 35 years - and we cater for outdoor enthusiasts as well as fashionistas. The brand appeals to a wide spectrum of people - men and women aged roughly between 18 and 40.
We recently launched an online viral competition and social networking campaign called ‘Race to the Summit’. The project targets the 18 to 30 market, and probably the more creative types - the younger people who are connected to social media.
The core idea was to raise the brand awareness of Penfield online, whether that be through blogs or social media like Facebook and Twitter. The main aim was to get more people onto our database and collect some email addresses.
We try through our communications and advertising to be as inspirational as we can. We have a good quality of garment but are still affordable at the same time.
The situation at the moment is not the best ever in terms of consumer purchasing power, but people do recognise that our products are good quality and they are willing to invest the money in it.
The brand has been doing well in the UK, where it has been growing every year, both at a wholesale and a retail level.
FIVE GROUPS THAT MAKE UP THE ‘CON-DEMMEDYOUTH’AND THEIR FAVOURED BRANDS
Marks & Spencer
Cotton Wool Kids
Marks & Spencer