Coming of age: like boomers, Millennials offer a return to value-oriented buying. (What makes...

The Millennial Generation may not have aged very much yet--the oldest is about 21--but this young group and its can-do attitude may well be the key to the industry's future, according to marketing experts.

Millennials are so named because theirs are among the first graduating classes

of the 21st century. Also known as Generation Y or Echo Boomers, they are the largest buying power since their parents, the Baby Boomers. At 73 million strong, they're only a fraction behind their parents in size, and they're an open-wallet set: Gen Y contributed about $300 billion in spending to the U.S. economy in 1999, according to the Census Bureau.

Given the smaller size of Millennials' predecessors--Generation X's population is only about two-thirds that of the Echo Boomers and the fact that most of the Millennials' Baby Boomer parents will be on Social Security when this bunch of up-and-coming pool and spa customers reaches its spending peak in about 40 years, this is not a group that any recreational product industry will want to miss, according to Future Marketing author Joe Marconi. "They've got some big numbers and some big bucks to spend," Marconi says. "They're a very important group."

Problem is, Marconi says, when it comes to the leisure industry, not much is known about what Millennials want because they are so young. Born between 1978 and 1994, "they are even less-defined than Generation X, because they have so many stages ahead of them--college, jobs, marriage, going out on their own," he says. "They provide marketers with a very fast-moving target."

Still, marketers not wanting to be left behind "must make it their business to know and understand what today's kids want," says David Bersoff, a director at Yankelovich Partners, a Norwalk, Conn. marketing research firm that specializes in studying Gen Y behavior.

As Generation Y members hit the market for pools and spas in a few years, here's the type of personality researchers believe the industry can expect:

* Mom and Dad set the pattern. Like Generation X, the Millennials want to do better financially than their parents did, and they were raised in relative affluence, according to William Strauss and Neil Howe, authors of Millennials Rising: The Next Great Generation. But unlike Gen X, the Echo Boomers grew up mostly in an economically "up" time, and their parents were more protective of what they were exposed to in the way of product marketing. "On the whole, Millennials give Boomers very high marks for managing a prosperous economy and for including kids in their earning and spending priorities," the authors note. "At the same time, Millennials seem willing to heed their parents' message about excessive commercialism. Both attitudes represent a reversal from the trends of the past two generations."

As a result, marketers believe that Millennials will be much like their parents--a quality-oriented, somewhat more conservative and sheltered bunch than their Gen X brothers and sisters. "Boomers want these `Babies on Board' to grow into the best-behaved, most civic-minded kids in the history of humankind--or, at a minimum, a whole lot better than [Generation X]," Strauss and Howe note.

Millennials aren't opposed to duplicating their parents' success. Indeed, they expect to do just that--and more. In a 1999 USA Weekend survey of older teens, 52 percent answered that when they reach their parents' current age, they expected to be "better off than [the parents] are now." Only 4 percent thought they might be worse off, the survey notes. This is not unlike the optimism expressed by Baby Boomers in the 1960s, researchers note.

* I buy what I like, not what my parents like. While Baby Boomers are fairly brand-loyal and gravitate toward well-known names and Gen Xers choose brands more by price than reputation, Millennials are somewhere in the middle, according to Marconi. With products such as shoes and clothing, they've demonstrated loyalty, but tend to go for lesser-known brands. The author points out a Business Week article that asked Generation Y to identify what brands it thought were "cool." "They rattled off a list their [Baby Boomer] parents blanked on: Mudd, Paris Blues, In Vitro," Marconi says. "When asked what brands were `over,' [Millennials] gave familiar names: Levi's, Converse, Nike."

This should not surprise seasoned marketers, says Marconi. Every generation seeks to distinguish itself from its parents, and an obvious way is through its choices of branded merchandise. "But what's notable here is that this news seemed to surprise the companies that were not the brands of choice," Marconi says. "That a brand such as Nike, for example, which markets so aggressively to a specific target, would assume that the children of its core customers would also automatically make Nike their brand of choice is hopelessly naive."

* Treat me right. Millennials say they have no problem going into a new store, checking it out and maybe even making a purchase or two. They'll be very happy to return and buy other items unless they dislike the initial shopping experience.

The No. 1 shopping turnoff for Generation Y is poor customer service, according to Cynthia Cohen, president of Strategic Mindshare, a Miami-based strategic marketing consulting firm. High prices for low-value merchandise and a depleted stock of products are other big gripes, she says.

Marketers note that with the advent of the Internet as a product sales tool, it's important for traditional in-store retailers to keep their in-store practices top-notch or risk losing them to the Web.

But not everyone agrees. Strauss and Howe say you can expect to see more Millennials coming to the counter for purchases as opposed to making them online. Although this is a technology-driven bunch--"more of today's teens say they can live without a television than a computer," the authors note--Generation Y still prefers being able to see and touch items that they aren't familiar with.

"[Generation Y] likes to try before it buys," says Don Tapscott, author of Growing Up Digital: the Rise of the Net Generation. "They're users and doers, and they want to form their own opinions."

* Stand aside, I'm shopping. More than any generation before it, Millennials love to shop, notes Bersoff. Part of this attitude stems from the fact that Millennials have more disposable income than when other generations were their age, thanks to their own work efforts and the aid of their parents. "More of [Millennials'] shopping is recreational and not chore-based," Bersoff says. "This implies that stores need to be places to play, have fun and socialize if they're going to attract Gen Y. This will change as Gen Y ages and starts the process of family formation, as the Xers have."

Strauss and Howe add that Millennials are a more visual group than previous generations. Recent advertisements to this segment feature more color, "right out of the Fuji Film hue box," the authors note. And some ads, they remark, are even "just a statement of fact, as if to say, `Here's what the product looks like, here's the Web site. Check it out; you decide.'"

This no-pressure-sales tactic should fit with much of the approach established by various pool and spa firms when they dealt with Generation X.

* My nose will be part of the grindstone, thank you. Generation Y, like X before it, will be a hard-working crew and very much into leisure time, demographers note. But unlike the Baby Busters, who had to put off marriage and family to focus on careers, the Millennials are apt to marry and start new households sooner.

Census figures from 2000 already show a slight shift: While the average Generation Xers waited until they were in their late 20s to marry, Millennials are doing so in their mid-20s, similar to what their Baby Boomer parents did. This could mean Generation Y will be ready for the leisure products market a bit earlier than Generation X was--something that might offset Gen X's small size and limited marketing potential, says Marconi.

Researchers note that Generation Y also is already thinking ahead to the future. It's not uncommon, they say, for Millennials in their early teens to already have a sizable amount saved for college, and to be planning post-college careers or businesses to run.

A few already do, such as Richie Stachowski, who founded his own swimming pool toy company when he was 12 and is now, at the ripe old age of 17, a consultant for Wild Planet Toys in San Francisco.

Optimism goes with the generation, and anything that carries a similar, you-can-do-it message will register with Millennials. "The 21st century belongs to Millennials far more than to Boomers or Xers," the authors note. "Over time, how history has shaped them will have much to do about how they will shape history.

Side-by-Side Comparison of Generations

Significant    Baby Boomers         Generation X/     Millennial/Echo
Happening:                          Baby Bust         Boomers/Gen Y

Technology     Color TV             Cable TV/Videos   Web TV/Internet/
                                                       DVDs

Home life      Working fathers      Working parents   Absent fathers
               At-home moms         Babysitters       Day care

Television     "My Three Sons       "My Two Dads"     "Sex in the City"
               "Peyton Place        "Dallas           "Survivor"
               "American            MTV               VH1
                 Bandstand"

Music          LPs                  Cassettes         CDs
               Rock `n' Roll        Disco; Punk Rock  Hip Hop; Grunge

Movies         "The Graduate        "The Breakfast    "Titanic"
               "Butch Cassidy &       Club"           "American Pie"
               the Sundance Kid"    "Star Wars"

Appearance     Long hair            Sprayed hair      Body piercing
               Bell bottoms         Ultra tights      Hip huggers

Attitudes      "Free Love"          HIV/Safe sex      Selective sex

Work place     Women employees      Women managers    Telecommuters

Generational   "Have a Nice Day."   "No Fear."        "That's What I
slogan:                                                Like."

Source: Edmond Sun; The Nezo Generation Gap; Future Marketing
Generation Glance

Time period   Generation                1999 Population

1901-1924     GI/Builders               36 million
1925-1945     Silent                    33 million
1946-1964     Baby Boomer               77 million
1965-1977     Generation X              46 million
1978-1994     Millennial                73 million

Time period   Median Household Income   Annual Spending
              (1999 dollars)

1901-1924     N/A                       N/A
1925-1945     $34,671-60,922            $200 billion
1946-1964     $62,827-71,697            $500 billion
1965-1977     $52,151-62,827            $125 billion
1978-1994     $31,310-52,151            $300 billion

Source: U.S. Census Bureau

RELATED ARTICLE: Hight hopes.

Editor's note: The following represents a composite of Generation Y characteristics, attitudes and values developed using trends identified in The New Generation Gap by Neil Howe and William Strauss; Future Marketing by Joe Marconi and The Maturing Marketplace by George Moschis, Euehun Lee, Anil Mathur and Jennifer Strautman.

Generation Y, Or the Millennial Generation has hopes--and the gumption to turn those hopes into reality.

When the group hits 30--a mere nine years from now--they'll be earning close to $40,000 a year, according to Census Bureau projections.

By that time, most also expect to be married and have at least one school-age child. And they'll be ready to start shopping for some of the fun things in life, such as pools and spas, to keep their families close--and keep the good times rolling.

Here's an exchange a Millennial might have with a salesperson during a shopping trip:

Q: True or False: Your generation doesn't take things seriously enough.

A: True, for now. Anything with a leisure appeal catches our eye. But that will change as we get older. Things such as family values and environmental issues will become more important, just as they did for our parents.

Q: When it comes to buying items for yourself, how influential are your parents in your decision-making?

A: I respect their opinion. Just because my parents like it doesn't mean I don't want to look at it. But that doesn't mean I'm going to run out and buy it, either. It still needs to feel like it's part of my generation.

Q: Sticking to your generation, who are your heroes these days?

A: Kobe Bryant, for example--he's cool because he plays fair. He's not a glory hound like Dennis Rodman, whom my brother idolized. There's also Tiger Woods, Brittany Spears, Leonardo DiCaprio, Jenny McCarthy, Prince William.

Q: Researchers say your generation is more optimistic than Generation X. Why is that?

A: They're a bunch of grumps, I guess (laughs). I think their parents had it rough in the 1960s and 1970s, and immediately figured their kids weren't going to succeed any more than they did. My parents, on the other hand, never stopped telling me I was able to do anything I set my mind to. They also gave me the tools to succeed--a better education, less need to work after school, more of a stress-free environment.

Q: The Census Bureau does say that your generation is working less than Generation X did when it was your age. But, comparatively, your generation has more spending cash than others, and you're far more willing to part with it than others. Any reason why?

A: I like to keep up with current styles. I don't want to seem uncool compared to my peers. But at the same time, I'm not going to cough up $200 for a pair of jeans and shoes from the store where all my friends are shopping when I can get the shoes for $20 less somewhere else. I'll make more than one trip to get what I want,

Q: Are you accepting of product advertising?

A: Not now. I used to drive my parents crazy when I was a kid, asking them to buy me anything I saw on TV or heard on the radio. But I'm finding that you need to be a lot more cautious about what's out there. I don't think I'll run out and buy a product just because someone says it's great. I want to hear from people I trust--my friends, mostly--that this is something I should have. Even then, I'm going to be careful about price. I like to buy a lot of nice things, so the better I am with my money, the more I can enjoy life.

Q: Yet, you drive a Jeep Wrangler, which is not exactly the most economical car around.

A: Hey, it looks great in the dorm parking lot.

Q: What's the most important thing that's happened to your generation?

A: The Internet. Everything you always wanted to know about everything, at the few clicks of a mouse. I spend maybe two hours a day playing games, e-mailing or chatting online, and another three researching something. I imagine that will slow down somewhat when I get into my career.

Q: You've got a pretty crowded agenda for the next few years-high salary, marriage, family. Would you be disappointed if you didn't succeed?

A: Yes. But I'll just try harder. I'll still keep all the things I have on my list of future accomplishments. I just might get them done a few years late. That pool might end up in my yard when I'm 35, not 30. But I'll have one, absolutely.

Q: Why is it so important that you succeed?

A: Hey, it's bad enough they called us "Generation Y," as the group that came after "X." The last thing we'd want is to be even less successful than a bunch of "slackers."

--A.N.