Generation Why

Bill White of Bancroft Sport and Marine shakes his head when asked about 20-something boat buyers in his region. “Never happens,” he says, taking a short break after delivering a bowrider to yet another 40-something cottager.

It is a story that you hear from retailers across the country. Anecdotes about young buyers always seem to be coupled with a disclaimer: They are the exceptions to the rule. The 6.4 million Canadian consumers of Generation Y, born between the mid ’70s and late ’90s, have been spending their financial resources on things like student loans and first homes. To compound matters, they dominated many unemployment figures during the recent economic downturn.

That is beginning to change. The oldest members of this demographic group are about to enter what are traditionally seen as their early boat buying years, as families are established and incomes begin to rise. Even those who are waiting longer to move away from home — earning the unfortunate label of the “Peter Pan Generation” — can play an important role in influencing their parents. And they are all said to value their recreation time more than any generation before them. (It shouldn’t be too surprising. According to one U.S. study, Generation Y enjoyed four times as many toys as their parents did just 20 to 30 years ago.)

The challenge is that Generation Y represents a very different consumer than the boat buyers of the past. They have been found to generally distrust the information fed through traditional advertising campaigns and are less faithful to individual brands.

“The speed by which Generation Y will dump one brand for the next – or even one product from that brand for the next – is amazing,” notes John Trkla of Red Oak Marketing, whose clients include Yamaha, Regal and Chapparal.

It is a classic example of a threat that presents an opportunity. This mindset gives boat builders and retailers alike the chance to make significant changes in market shares. They simply need to be prepared to approach the marketplace in a different way.

Consider the different approach that these younger buyers take when they attend a traditional boat show. “In the past, attendees would have come to the show completely using the show as their entire location for gathering information,” notes Linda Waddell of Canadian Boat Shows Inc., which runs the Toronto International Boat Show. “Because of technology, this generation comes to the show much more educated and prepared.” Exhibitors can expect to face more specific questions along the way.

Meanwhile, the show organizers need to be careful to plan age-specific attractions as they try to keep the younger audience interested in boating, bridging the years between using a parent’s boat and making a purchase of their own. Special features such as the “social yacht club”, live music and wakeboarding demonstrations at the Toronto show are all targeted at reaching those between the ages of 18 and 34, who tend to account for about 17 per cent of the crowds. “Things that happen on our [indoor] lake are very much focused on that generation,” she adds. “They’re still interested in boating but they have other priorities. We need to keep them engaged and actually thinking about it.”

“Boaters typically become boaters because they grew up boating, so that generation is certainly a part of our strategy,” agrees Ellen Hopkins, director of communications for the National Marine Manufacturers Association (NMMA), architects of the Discover Boating campaign.

But when it comes time to buy, the consumers of Generation Y tend to be more focused on individual features than their parents, and they seem to be thirsty for factual information rather than general feel-good advertising campaigns of the past. It is why the NMMA is developing more information that focuses on tips for buying boats or other “how-to” topics. “Things that are useful get the most attention. It’s what’s going to become most viral,” Hopkins says.

Indeed, a “viral” component of any advertising and marketing campaign has become the Holy Grail of communicating to Generation Y, which seems to put a higher degree of trust and interest in the information that is shared among peers. “With Generation Y, more influence comes from their friends and from their relationships than ad mantras,” notes Trkla.

It is a fact that is leading more retailers and manufacturers to social networking venues.

“We’re putting a huge emphasis on social networking — Facebook, You Tube, Twitter, those social networks where people are getting their entertainment now,” says Tim McKercher, general manager of WaterTop, which oversees public relations and event marketing for Sea-Doo. He has seen similar signs throughout the industry. Ads that once directed audiences to corporate websites are now steering people to a presence on Facebook. There, marketers have the opportunity of speaking directly to the identified fans of a product, delivering information about events, race results and media reviews.

The successful approaches always steer away from traditional advertising messages, he stresses. “It’s not so much pushing in their face. It’s feeding their interests.”

It is seen to be a key approach when communicating with Generation Y. “They’ve been exposed to so much advertising, they almost come to distrust brands in general,” explains Jeff Quipp of Search Engine People, an agency that specializes in online marketing campaigns.

It is why he suggests that practical demonstrations are playing an increasingly important role, since the audience will be quick to post thoughts on a Facebook wall or send text messages to trusted friends. “Give them something to write about and invite them to a day when they can test and try out boats. They begin to share the information. They use it to connect to other people,” says the online marketing expert.

“The challenge for me and for other marketing companies is that Generation Y really defies every form of traditional marketing we grew up with,” Trkla observes. The 40-somethings who dominate many categories of today’s boat buyers were brought up in an era where they learned about the latest Hot Wheels toys when watching the same Saturday morning cartoons. Today’s 20-somethings are the product of a multi-channel universe, when they turn on the TV at all. Sixty-two per cent of Generation Y gathers news and information only from electronic devices, he says.

Generation Y consumers are quick to consume video, adds Quipp. “Canada is the most video-centric country on the planet.”

It is this type of thinking that led to a partnership between Sea-Doo and Nike 6.0, which films the best wakeskating athletes demonstrating their skills behind personal water crafts. “That,” McKercher says, “has kept us cool and hip.” And he refers to the short “video snacks” being used to attract this group of consumers to Sea-Doos. The 30-second videos focus specifically how a technology works, and stresses testimonials. “You have to get the basics really quick. You have to show him right away why this is something you should research further.”

Posting the video on You Tube and Facebook are just the beginning. “This kind of stuff you would hope has some sort of viral effect,” he says. “That’s the golden carrot – if you can get those materials to circulate.”

Forget calling them Generation Y. A better label might be Generation Why. As in, “why” should they care and “why” should they share?

Of course, the online universe presents only one of the challenges. An increasing proportion of Generation Y has enjoyed limited access to boating. Almost 80 per cent of Canadians now consider themselves to be urban dwellers, leaving them in areas where water access and storage can be financially limiting. The growing numbers of new Canadians among them often come from countries where recreational boating is not even part of the culture. Factors such as these have raised the stakes for the NMMA’s Discover Boating campaign which is often trying to get people on the water for the first time ever.

JF Rioux, Yamaha Canada’s product manager-marine, suggests that factors like this make cross promotional events particularly important. Young buyers may have limited exposure to boating, but they dominate the audiences at extreme sporting events. The same person who buys a ticket to a supercross motorcycle race can be drawn to a display that promotes WaveRunners, he says.

But in the case of Generation Y, image is only part of the equation. Those who are tracking the market stress that any messages need to be firmly rooted in reality. Otherwise, the bad reviews will spread more quickly than ever before.

“It’s got to be very functional and it’s got to be the real deal. You have to prove that it’s good and it’s going to fulfill their needs,” McKercher explains. He uses recent advertising campaigns for Apple’s iPhone to prove his point. The entire commercial focuses on the product and a pair of hands. “They’re not saying it’s cool,” he says, “they’re showing you how it’s cool.”

The widespread sharing of information and the perceived importance of personal recommendations also increases the need to effectively manage online content. The marketers who come across negative posts about their products need to react quickly if they don’t want the issue to spiral out of control.

“If there are some negative mentions out there, engage them. Ask ‘What is it that you would like to see us do differently?'” Quipp says. It is a strategy that he has seen Dell Computers employ particularly well. The IT manufacturer set up a site expressly to collect complaints, and asks for direct ideas and suggestions to fix the issues. “It’s genious,” he says. “You know the philosophy of ‘don’t come to me with problems, come with solutions?’ This does that … [and] if they’re part of a changed process, they’re going to be much more part of a solution. If you can take a problem and solve it in real time, they’ll be more loyal than they would be if that hadn’t occurred in the first place.”

And when a conversation is established, retailers need to be ready to respond to requests for information. Two of Trkla’s largest manufacturing clients have found that a dealer which makes the first contact with a potential customer has a 71 per cent higher chance of actually attracting the individual to their dealership, he says.  “They have a much higher percentage of customers coming in based on their Generation Y, Generation X, Web 2.0 advertising.” The infrastructure to make it happen isn’t costly, but it does require some sort of tool to deliver a quick and direct response to any posed questions, or fulfill any sort of process in three clicks or less.

“It’s almost double damaging to present an electronic offer and immediately show all your warts by not being able to respond to it,” he adds.

Of course, the messages represent one part of the equation. The marine industry will need to introduce products which target their specific wants and needs.

For now, McKercher wonders whether many manufacturers are missing an opportunity to build boats to target the younger entry-level buyers when they are ready to sign on the dotted line. “There hasn’t been anything from any of the manufacturers developed in the last five to six years that’s truly designed for young buyers, and what I mean by that is mainly in price. They do have more spending power at that age than every time before this,” he says.

Rioux suggests that the emergence of a new generation of young buyers will require a greater focus on the balance between form and function, with more boats incorporating things like towers and big speakers to attract youthful buyers, along with the features that parents might want like a ballast system to support towing.

One thing is certain. There is a new generation on its way, and everyone will want a share of the business.

“They’re spending money. They will start spending more and more money,” McKercher adds. “You want to get that next generation.”