How small business can engage with Gen Y

in Marketing by The Business Room
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Business engaging GenY

Generation Y – maybe you’re their parents, grandparents or employers. Or perhaps it’s you who is Gen Y.

This group has been studied to the nth degree, yet the jury’s still out on just how to sum them up. Needless to say, Gen Y is merely the current face of an age-old problem – we just don’t know what to make of a younger generation.

From a community perspective, we can say that Gen Y does understand the importance of small business to the community. After all, they are community-minded and can be altruistic in the support of causes and institutions they believe in. But there’s also little research to suggest they're active supporters of small business.

While this gives us a rather murky understanding of Gen Y, we do know some key things about them as a consumer group.

They’re tech savvy

Gen Y has seen a 110 per cent increase in time spent online since 2005.1

It’s no surprise that at the crux of the current round of generational change is technology – specifically the internet and mobile computing (mobile, internet-enabled devices). Not since the television and the affordable automobile of the baby boomer generation has there been a disruptive technology like the internet.

The internet’s reach is far more pervasive than both of those archaic technologies combined, in that it doesn’t take much for Gen Y to have ubiquitous internet access, yet it gives them even more retail freedom than a car gave baby boomers.

According to Nielsen, Gen Y makes up 30 per cent of Australia’s online consumer base.3 This helps paint a broader picture of the key challenges faced by many small businesses in Australia. You’re competing with the variety and convenience of online shopping.

They trust their friends

Nine out of 10 Gen Ys say they engage in online shopping.4 The overwhelming majority (96 per cent), however, feel that it’s important to contribute to society in some way.5

Recent research also indicates that some 37 per cent of Gen Y distrusts big business. The same research reveals 51 per cent of Gen Y makes purchasing decisions based on reviews, trusting them more than they do referrals from family and friends. 6

So, it pays to have an online presence even if you don’t offer sales. Gen Y is also far more likely to buy on price than quality.

You’re not relevant unless you’re social

Even if you don’t have an e-commerce site offering online sales, you should be one of the 90 per cent of small businesses that have a social media presence.7 After all, 87 per cent of Gen Y in 18 significant geographical markets, including Australia, have a Facebook account.4

So, you need to view your social media channels as you would any traditional customer service channel such as phone and old-fashioned face-to-face interaction. Almost a third of Gen Y checks their phones so often they lose count.4

Interestingly, Forbes notes a little known paradox with Gen Y – they’re tech savvy yet value face-to-face interaction and use electronic communication to augment it.8

So how do you reach Gen Y?

  • Make customer service a priority in your business (and respond in a timely manner).

  • Have as many channels of contact as possible and monitor them as diligently as Gen Y.

  • You need an online presence that definitely includes social media.

  • You need to be very price competitive – they’re far savvier at online pricing than any other demographic, so they’re more likely to know what a good deal looks like.

  • You need variety compelling enough for them get off the couch and into your store.

  • Don’t underestimate them – they are worldly and well-informed.

Understand them or not, there are some easy ways you can connect with Gen Y to ensure they see the value of your business.


1 5 digital shifts that are changing businesses, Frank Media, 2013,

2 Forget the Internet of Things: Here Comes the ‘Internet of Cars’, Wired, 2013,

3 Australian Online Landscape Review August 2012, Neilsen, 2012,

4 An Insight into Generation Y, Haptic Generation, 2013,

5 Australia’s Generous Gen Y’s,, 2013,

6 How Millennials are Shopping: 20 Interesting Statistics & Figures, Brian Honigman 2013,

7 Finding right mix key to success,, 2013,

8 The Three Paradoxes of Generation Y, Forbes, 2013,

This article represents the views of the author only and not those of American Express.

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