life's a beach 101

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The Class of 2000 - the leading edge of the huge Echo Boom - is about to graduate from college. Can they teach marketers a few lessons about e-commerce?

the beach in Panama City, Florida, is probably the last place you'd expect to find a corporate recruiter, let alone more than 50 of them. But there they were during Spring Break, gathered under a huge white tent on the sand, trying a bit desperately to attract that most elusive of quarries: talented, motivated members of the Class of 2000. It's enough to give a class a swelled head.

And yet, according to many observers, this year's crop of graduating seniors seems blissfully unaware of the clout they wield in the job market. In fact, when asked, they typically underestimate their worth and overestimate the difficulty they'll have finding a job. "Students seem to be less informed than I expected them to be, even the seniors," says Brent Lewis, a recruiter from Quantum Corporation, a Silicon Valley computer hardware manufacturer, who attended the Panama City career expo. "They believe they'll have a hard time finding a job. I tell them the door's wide open - all of the West Coast is struggling to find people - or else, why would all these companies be on the beach?"

job fairs on the beach are just the latest clue that Generation Y - also called the Echo Boom - is about to change the way business does business. Just as their baby boomer parents are about to redefine the "senior" consumer for marketers, this generation of 70 million will redefine for American business how consumers apply the Internet in their daily lives. Generation X helped popularize the Internet by making it more accessible; Gen Y will define how we integrate it into everyday life. This year's graduating class, in fact, represents the first wave of consumers who grew up with new media. As teens, they used the Web because it was cool. As adults, they'll use the Web whichever way it fits into their lives. And that has huge implications for all sorts of marketers.

Currently, most marketers see e-commerce as a way to target a specific group, or simply as an extension of their existing sales operations. But as e-commerce matures, marketers will need to do more than just enable consumers to buy online. Eventually, they'll need to make online buying/returning/asking for help as seamless as it is in a store. "Retailers and manufacturers are really going to have to service the needs of this group," says Pamela Smith, vice president of online research for The NPD Group in Port Washington, New York. "That will be expected of most businesses, not something some companies occasionally offer."

Likewise, marketing methods will need to evolve, too. These newest adults have seen as many as 20,000 commercials every year since they were old enough to sit up. Banner ads or traditional ones aren't likely to impress this crowd, experts say. Rather, they are more likely to respond to anything that makes their lives easier. "This group responds best to integrated marketing that doesn't strike you as advertising," says Renny Gleeson, senior vice president of marketing at Iturf Inc., an Internet network for 13-to-24-year-olds. "The most effective advertising is not an interrupter, but a facilitator."

Actually, the Class of 2000 is much more likely to become interested in products through word of mouth or "buzz" than any traditional media outlet. A 1999 survey of 500 college students conducted by Strategic Mindshare, a Miami-based research firm, found that students preferred to learn about Web sites from friends (followed by magazines, links from other sites, and television). Ikea, the Swedish home-furnishings retailer, found that out firsthand with a recent e-mail promotion. The company offered $75 off purchases if customers sent Internet postcards to their friends announcing a store opening. The idea: that the messages would have more credibility coming from a friend. Within two weeks, the promotion generated 37,000 referrals, although Ikea voluntarily suspended the campaign in the wake of complaints about privacy. But the strategy succeeded in its mission to attract customers.

Why should marketers care about the preferences of this year's newly minted degree holders? Simply this: These young men and women are not only the first wave of the Echo Boom to hit adulthood, they make up more than one third of the 3.3 million born in 1978. About 1.2 million of them will receive college degrees this year. What's more, some of these recent college grads may be wealthier than previous generations. EdVenture Partners, a consulting firm in Berkeley, California, last year polled 270 students at 20 colleges and found that 31 percent had money invested in the stock market. "We tend to think of college students as not being retirement-minded," says Pamela Horick, president of EdVenture Partners. "But we forget that this group watched their parents get downsized out of middle management jobs in the late '80 and early '90s. This group is much more savvy. They're starting to make big decisions earlier than ever."

Take, for example, Janet Hemphill, a senior at Hiram College. Armed with a degree in sociology and anthropology, the 22-year-old already has a life plan: She's engaged, but doesn't plan on marrying until the end of 2001. First she wants to concentrate on her career. Several big companies are courting her, and she says she'll probably earn a mid-$30,000 salary when she graduates this month. "Being financially sound is very important to me," says Hemphill, who plans to earn her master's degree while working full-time.

Hemphill grew up surrounded by brands and marketing - and instant access to just about everything. Time, she says, is her most valuable commodity. And "fast," she adds, is the one adjective that describes her needs, from retail purchases to research. The Internet holds no mysteries for her, nor does e-commerce. "To keep me as a customer, businesses must have Web sites to answer my questions and view new products," says Hemphill, who gets irritated with slow downloads from cyberspace. "This interactivity is mandatory."

As this generation has matured, its disinclination to respond to celebrity endorsements and to idolize established market leaders has shaken the confidence of many once-unbeatable brands, including Nike and Pepsi. Even auto manufacturers discovered they were facing a whole new kind of car buyer, one that wasn't impressed by television ads of cars zooming down empty roads, but related instead to a mix of practicality and individual self-expression. Toyota was one of the first automakers to aggressively chase the Echo Boom with its "Genesis initiative," which included cheeky teen magazine ads and its Web site, There, young drivers can watch video clips of a car full of their peers getting down in an Echo, MR2, or sleeked-up Celica, complete with words you can't say on TV. And now, even more companies are in for a big attitude adjustment.

For businesses, now's the time to get the attention of this influential group. The Class of 2000 is at the very end of what Eric Weil of Student Monitor LLC calls "a weaning process." Thanks to the largesse of parents and grandparents, who've raised the weekly gift and allowance bar to a stratospheric $9 billion a year, these soon-to-be grads have made many consumer-goods decisions on their own since high school, from fashions to personal-care products to gas for their cars. Once they hit the job market, they'll have more money than they know what to do with, and complete freedom to spend it as they please. "If you can target the transition, you can really create some long-term brand loyalty," says Weil.

Brand loyalty is very strong among graduating seniors, according to a 1999 survey by Student Monitor. This is especially true for health-and-beauty aids - more than 80 percent of seniors said they'd found a brand of deodorant, toothpaste, or shampoo they would stick with; 67 percent of seniors expressed loyalty to a specific brand of breakfast cereal. In fact, loyalty to these products was considerably higher for seniors than for the student body as a whole, implying that these decisions, once made, only become more settled. On the other hand, seniors were less loyal to items such as soft drinks and snack foods.

not surprisingly, these graduates' foremost concern - for now - is getting a job. What is surprising, though, is how uncertain some feel. Twenty-one-year-old Rowan Balagot, who will graduate from Smith this spring with a bachelor's in psychology, is one of the students who considers herself "clueless" about the job market, and is somewhat concerned about her prospects. She'd like to head out to San Francisco but worries about what she'll find there - or anywhere she decides to search. Still, like most of the members of the Class of 2000, she's cautiously optimistic: "I think it might be hard to find a job, but I'm sure there's one out there for me."

She has a lot of company among her classmates. That sentiment was echoed by 60.2 percent of the 1,218 students responding to the 2000 Graduating Student and Alumni Survey, sponsored by the National Association of Colleges and Employers (NACE). Those students said that they expected finding a job would be somewhat difficult - even higher than last year, when 55.5 percent were apprehensive about their chances. Some 30 percent said the biggest obstacle in their job search will be competition with other graduates, while 20 percent more cited lack of experience - a lack, that is, relative to other members of the Class of 2000, whom they see as more prepared.

Fact is, in today's economy even English majors can get a well-paying job. With the unemployment rate at record lows and the economy still bubbling, employers are starved for talent. Says Camille Luckenbaugh, employment information manager at NACE: "The demand in computer science and engineering has started flowing over to other fields. Some corporations are even starting in-house universities to train people for technical jobs. It's not nearly as hard for even liberal arts grads to make good money as it was ten years ago."

Even starting salaries have begun to inch up. Average starting salaries for liberal arts grads are expected to exceed the $30,000 mark for only the second time since the NACE began the Job Outlook Survey in 1992. This year's figures are based on a survey of 435 employers. And, a career-oriented Web site, reports that salaries for this year's graduates will rise on average by $4,271. Grads with the most money to spend on their new lifestyles, of course, will be holding degrees in computer science and engineering. Average starting salaries in those fields, according to estimates by, will be $43,062 and $42,281, respectively, as of March 2000. However, only 9 percent of the Class of 2000 majored in those technical fields. Salary offers in other professions, according to, averaged $33,446.

With their new salaries, these budding adults can indulge their taste for the finer things, a taste developed in a booming economy that's lasted for nine of their 21 years. "For the foreseeable future, this generation is much more likely to want things that are fairly luxurious and branded," says Irma Zandl, president of the New York City-based trend-research firm Zandl Group. "Because job opportunities are so great now, they're going to be at the top of the category in many areas, something I call `brand resplurgence.'"

But marketers should not take this generation's surging figures - for population, education, and income - for granted. The one certainty, says Zandl, is that they're going to surprise us. "The thing about the Echo Boom is that it is much more diverse [in taste and culture] than the baby boom. Marketing to the Echo Boom will be `just for me,' like they're doing at Web sites like" That site allows visitors to customize their beauty products, thus to personalize and create their own buying experience. After the sale, Zandl laughs, "They even send you flowers when you buy something, to show how much they value you." But she cautions retailers and e-tailers alike against trying to dazzle these new adults with hype: "What strikes me is how realistic they can be. They can cut through the nonsense fairly quickly."

Cynthia Cohen, president of Strategic Mindscape, predicts that this cohort will radically change the shopping experience, and retailers will have to start making changes in order to keep the Echo Boomers coming back. In fact, says Cohen, the store concept most preferred by today's college student is one in which "the five senses are engaged," where there are "experimentation and hang-out areas" (e la Barnes & Noble and Borders Books) and places to "engage in activity and buy products." This generation enjoys the cross between retailing and activity-based businesses such as gyms, copy centers, and sporting venues.

That's mostly because, Cohen notes, these young up-and-comers always seem to be stuck in a time crunch. "They want to set aside time for relaxing, but end up over-committed and stressed, even in leisure. The majority see time as a currency."

That observation is borne out by the Student Monitor survey, in which more than half of all seniors claim they are watching less television than a year ago, while only 14 percent are spending more time on the couch. Meanwhile, 49 percent of college seniors say they are spending more time reading e-mail. Weekly Internet use rose from 5.6 hours in 1998 to 7.2 hours among all students in October 1999. Seniors spent an average of 6.4 hours per week surfing.

What can we expect from this first wave of the Echo Boom? By all accounts, a sea change in buying habits that will rival the one caused by their parents.

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